Los Angeles News

City of LA sues US Bank, calls it a slumlord

Tuesday, July 17, 2012

The city of Los Angeles is suing U.S. Bank for allowing substandard conditions in foreclosed homes it owns.

Some 150 properties owned by Bancorp have fallen into disrepair and are blighting the city, according to Los Angeles City Attorney Carmen Trutanich.

"U.S. Bank failed to make the necessary repairs, allowing nuisance conditions to fester," Trutanich said. "In many instances, the tenants in these buildings were condemned to live in substandard, dangerous conditions."

U.S. Bank says Trutanich is suing the wrong people. In a written statement, the bank says "other companies - not U.S. Bank - are responsible for the servicing of the loans, including maintenance of the properties and compliance with city ordinances."

"The only reason U.S. Bank's name is associated with these properties is because we serve as trustees for the trusts," the statement said.

The suit filed Monday alleges that in failing to maintain its properties throughout the city, U.S. Bank violated city building codes and subsequent abatement orders, as well as state laws.

The suit asks a judge to order U.S. Bank to immediately bring all of its properties into compliance with city and state building codes. It also asks for $1 million in restitution for resources the city claims were expended to monitor and, in some cases, improve the properties.

An attorney for the Inner City Law Center says it's clearly the banks responsibility when they foreclose on or don't maintain properties they own.

"When the banks take over the property and fail to maintain them - one of the basic obligations of property owners - these properties fall into disrepair and become slums, and banks have become the largest slumlords in the city of Los Angeles," said Amos Hartson, an Inner City Law Center attorney.

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