Federal Law

The Servicemembers Civil Relief Act and HOAs

A federal law that pauses collections and foreclosures — and caps interest — for members of the military during their service. Here's how it constrains an HOA.

50 U.S.C. §§ 3901–4043 Active-Duty Protections

Overview

What the SCRA does

The Servicemembers Civil Relief Act (SCRA), 50 U.S.C. §§ 3901–4043, shields members of the U.S. Army, Navy, Air Force, Space Force, Marine Corps, and Coast Guard from many collection actions and foreclosures during their time in service.

It covers active-duty members, activated reservists, and National Guard members called up for more than 30 consecutive days. And unlike the Fair Debt Collection Practices Act, which reaches only third-party “debt collectors,” the SCRA binds all creditors — including an HOA collecting its own assessments.

Foreclosure

Default judgments & foreclosure are put on hold

The SCRA bars creditors from taking default judgments against servicemembers, and it lets a court stay (pause) a civil action at the servicemember's request or on its own initiative. Lienholders — HOAs included — cannot pursue non-judicial foreclosure against a protected servicemember, and, as in other civil cases, a judicial foreclosure sale cannot be entered by default.

One key limit: this foreclosure protection applies to property the servicemember bought before entering active service — not to property purchased during the current period of active duty.

Interest

Interest on pre-service debt is capped at 6%

The SCRA caps interest on pre-service debts at 6% during the period of military service — and, for mortgage obligations, for a year afterward. 50 U.S.C. § 3937. So an HOA that charges interest on unpaid assessments cannot charge a deployed, active-duty member more than 6% on assessments tied to a home bought before deployment.

Leases

Activated members can terminate a lease

For reservists especially, one of the most valuable provisions lets an activated reservist or re-deployed active-duty member terminate a lease — the termination taking effect “30 days after the next rent payment is due.” 50 U.S.C. § 3955(d)(1).

Enforcement

Penalties & where to get help

Most SCRA remedies simply undo what was done in violation — reversing an improper action or refunding excess interest. But a creditor that knowingly violates the Act can face fines and even imprisonment. 50 U.S.C. § 3953.

Servicemembers and their families who believe their SCRA rights were violated should contact their local Armed Forces Legal Assistance office.

Learn more (Military OneSource) ↗

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These agencies offer free information on avoiding foreclosure and bankruptcy.

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