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May 17, 2011


Filed under: California Defense Attorney — Tags: , , — fayarfa @ 3:21 am


Multi-National Bank Faces Hundreds of Millions of Dollars in Potential Liability and Injunction to Clean Up Foreclosed Properties and Stop Illegal Evictions LOS ANGELES – The City Attorney’s Office filed a civil law enforcement action against Deutsche Bank for allowing hundreds of foreclosed properties to fall into serious disrepair and for facilitating the illegal eviction of hundreds of low-income tenants. In its complaint, the City Attorney alleges that Deutshce Bank has become one of the largest slumlords in the City of Los Angeles.

The City Attorney’s complaint focuses on 166 properties as examples of Deutsche Bank’s illegal conduct. The complaint alleges violations of federal, state and municipal laws regulating housing conditions, nuisance properties and tenancies by Deutsche Bank, through its subsidiaries Deutsche Bank National Trust Company and Deutsche Bank Trust Company Americas. Specifically, the City alleges cause of action under the California Unfair Competition Law and the Los Angeles Municipal Code, which encompass a myriad of violations, including California Public Nuisance laws, the Los Angeles Vacant Building Ordinance and the Los Angeles Rent Stabilization Ordinance, among others.

The lawsuit seeks immediate injunctive relief, including a complete inventory, registration and inspection of foreclosed properties; compliance with all applicable state and municipal code requirements; and a stop to all illegal evictions

The City Attorney is also seeking restitution to current and former tenants for am ounts paid in excess of the actual value of their units and unpaid relocation fees; reimbursement to the City for costs of repair, abatement, inspection and investigation; and penalties.

Deutsche Bank’s liability is potentially in the hundreds of millions of dollars. “We must fight blight by holding banks accountable when they create vacant nuisance properties that pose threats to our residents and destroy the quality of life in our neighborhoods, and we must protect vulnerable tenants from illegal evictions,” said City Attorney Carmen Trutanich.

During the housing boom and bust of the past four years, Deutsche Bank’s subsidiaries acquired over 2,200 properties in the City of Los Angeles through foreclosure. In some instances, the properties were vacant at the time of foreclosure, and Deutsche Bank either failed to make the necessary repairs to remedy nuisance conditions, or caused or permitted nuisance conditions to develop. Other properties were occupied upon foreclosure, and Deutsche Bank unlawfully evicted tenants in an effort to vacate and sell the buildings. Often, Deutsche Bank allowed the vacant properties to become nuisances. In other instances, Deutsche Bank failed to provide minimum maintenance at occupied buildings, condemning tenants to live in substandard and dangerous conditions.

Deutsche Bank was repeatedly notified of the substandard conditions at the buildings it owned, by citations, orders to comply and hearing notices from various city agencies. Despite repeated notice, Deutsche Bank failed to respond and failed to bring its properties into compliance.

Most Deutsche Bank-owned properties are in low-income areas of the City, primarily in south Los Angeles and the northeast San Fernando Valley. As a result of Deutche Bank’s actions, vacant nuisance properties owned by the bank have depressed property values, lead to increased crime rates, and added an additional burden on already stressed City services.

“We are sending a clear message to banks — if you neglect properties and endanger neighborhoods; if you illegally put families on the street, we’re coming after you. We’re going to make sure banks step up and fix their foreclosure mess, not make it worse,” said Council President Eric Garcetti.

Reports from law enforcement agencies and housing advocates across the country indicate that although Deutsche Bank is not the only bank engaging in this unlawful conduct, it is consistently the worst, and the least responsive, offender.

“For several years, the Housing Department has received numerous complaints of code violations from tenants of Deutsche Bank owned properties and others who have filed complaints regarding violations of the Los Angeles Rent Stabilization Ordinance,” said Douglas Guthrie, General Manager of the Los Angeles Housing Department. “We are glad to be working with the City Attorney to address these issues facing tenants in our communities.”

Tenants who may have been illegally evicted by Deutsche Bank or continue to live in the bank’s substandard, foreclosed properties are encouraged to call the Los Angeles Housing Department at 1-866-557-RENT.

“Bet Tzedek, a public interest organization that has provided legal services and assistance to the Los Angeles Community for over 35 years, applauds the City Attorney in this action today against Deutsche Bank, for the unlawful practices Deutsche Bank uses in deceiving, harassing, and driving tenants from their homes following a foreclosure,” said Julius Thompson of Bet Tzedek Legal Services. “Bet Tzedek echoes the City Attorney’s assertions today that tenants have rights and these rights must be respected. These rights include legal protections under rent control ordinances, under valid rental contracts, and under the Protecting Tenants at Foreclosure Act (PTFA). All of these rights must be respected.”

The case against Deutsche Bank is being handled by Assistant City Attorney Jeffrey Isaacs and Deputy City Attorneys Julia Figueira-McDonough and Travis Austin of the Complex Litigation Division in coordination with Assistant City Attorney Tina Hess of the Office’s Safe Neighborhoods and Gangs Division.


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