Morningstar Storage Pays $130K to Resolve Alleged Violation of Servicemembers Civil Relief Act

Morningstar Properties LLC, which operates self-storage facilities under the Morningstar Storage brand, has agreed to pay $130,000 to resolve an alleged violation of the Servicemembers Civil Relief Act (SCRA). The fine stemmed from the operator’s failure to obtain court orders before auctioning the contents of at least three storage units in Florida that were rented by active-duty military personnel. The settlement must still be approved by U.S. District Court for the Middle District of Florida, according to the source.

As part of the SCRA, anyone holding a lien on property of a servicemember must obtain a court order prior to auctioning, selling or otherwise disposing of the property. According to a complaint, an Air Force staff sergeant rented a self-storage unit in Tampa, Florida. When completing the rental agreement, she indicated that she was on active duty and provided contact information for her military unit. She also authorized rental payments to be automatically deducted from her bank account each month, the source reported.

Morningstar purchased the self-storage property while the staff sergeant was deployed in Jordan. The company allegedly stopped her automatic payments and auctioned her unit contents for $390. A lawsuit was then referred to the U.S. Justice Department by the U.S. Air Force.

If the deal is approved by the U.S. District Court, Morningstar will pay the staff sergeant $80,000 in damages as well as $5,000 to two additional servicemembers in separate cases. The self-storage operator has also agreed to pay a $40,000 civil penalty to the U.S. government. In addition, it has agreed to create new policies in relation to the SCRA, the source reported.

Founded in North Carolina in 1981, Morningstar Properties is a vertically integrated developer, operator and owner of real estate with a focus on self-storage and marinas in the mid-Atlantic and South. The company has acquired, developed and operated more than 250 self-storage projects nationwide, totaling more than 15 million square feet. It operates 108 self-storage facilities in 17 states.

Source: US Politics Today, Justice Department Secures Relief from Morningstar Storage to Resolve Alleged Violations of the Servicemembers Civil Relief Act