A Del Rey property is one of several named in a lawsuit against Deutsche Bank announced on May 4 by Los Angeles City Attorney Carmen Trutanich.
The building, located at 11881 Jefferson Blvd., is one of 166 buildings that the German-owned bank allowed to fall into shabby conditions and facilitated the illegal evictions of hundreds of tenants, according to Trutanich’s office.
“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,” Trutanich said in a statement.
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.
Trutanich is also seeking restitution for current and former tenants for amounts paid in excess of the actual value of their units and unpaid relocation fees. In addition, his office is also asking for reimbursement to the city for costs of repair, abatement, inspection and investigation and penalties.
The legal action 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.
City Councilman Bill Rosendahl, whose 11th District includes Del Rey, was critical of the alleged mistreatment of tenants at the Deutsche properties.
“Deutsche Bank deserves what is happening to them,” the councilman said. “What they have done to these tenants is outrageous, and I applaud the city attorney for taking this action.”
According to the complaint, the global investment company frequently allowed the vacant properties to become nuisances, and in other instances, failed to provide the minimum maintenance at occupied buildings, condemning tenants to live in substandard and dangerous conditions.
The global 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, the legal action states. Despite repeated notice, Deutsche Bank failed to respond and did not bring its properties into compliance.
Trutanich called the global bank “one of the main slumlords of Los Angeles.”
The city attorney said Deutsche Bank owns the loans of over 2,000 properties in the city.
“I am opposed to any large bank illegally evicting Del Rey tenants,” Del Rey Neighborhood Council President Eric DeSobe said. “If during the course of his investigation the city attorney finds any wrongdoing, I hope that the offenders are punished to the full extent of the law.”
Other city agencies are also involved in the legal action. Los Angeles Housing Department General Manager Douglas Guthrie, said his agency has had complaints about the bank’s properties for some time.
“For several years, the city’s 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 Guthrie. “We are glad to be working with the city attorney to address these issues facing tenants in our communities.”
Representatives of Deutsche Bank say that Trutanich should be targeting the loan servicers of the properties.
“As we have repeatedly advised the Los Angeles City Attorney’s office, loan servicers and not Deutsche Bank as trustee, are contractually responsible for both the maintenance of foreclosed properties and any actions taken with respect to tenants of foreclosed properties,” bank officials said in a statement.
“For over a year, we have offered to help the Los Angeles City Attorney’s office contact the loan servicers that are responsible, but they have refused our help and would not even tell us which properties they were talking about.”
State Sen. Ted Lieu (D- Marina del Rey), whose district includes Del Rey, said he was not surprised to hear that an action had been brought against a large bank.
“I believe that voters are aware of the fraudulent and reckless conduct by many of these large, global banks,” the senator told the Argonaut.
Lieu, who authored the California Foreclosure Act when he was in the Assembly, which imposes a 90- day foreclosure moratorium unless a lender offers a comprehensive loan modification program designed to keep homeowners in their residences, said Deutsche had no excuses for reportedly allowing their assets to fall into disrepair.
“Banks have a duty to maintain their properties and not allow them to deteriorate,” he asserted. “The city attorney’s action is bold and is a long overdue step to get banks to do the right thing.”
While the majority of the buildings were located in lower-income areas of the city, the presence of a property on the Westside that is being classified as blighted surprised Mark Redick, a Del Rey homeowner and civic leader who is also the former president of the Del Rey Neighborhood Council.
“It is a little surprising, because Westside housing has not been hit as hard as some other areas have been,” said Redick, a hotel executive who also owns residential properties. “What Deutsche Bank has done invites blight, which is an infection that affects every neighborhood that it starts in.”
The news of Trutanich’s civil action comes on the heels of a federal suit filed in Manhattan on May 3, which accuses the bank of repeatedly and “recklessly” lying to the government in order to secure federally-back insurance for mortgages that it was selling.
The federal government is seeking $1 billion in damages.
Redick said the allegation against Deutsche could spell harmful consequences for nearby neighborhoods where the 166 buildings are located. “In a depressed market, this can affect property values of neighboring homes,” he said. “We prosecute slumlords, and Deutsche Bank should no be an exception.”
Rosendahl said his district was fortunate to have only one of Deutsche’s foreclosed buildings.
“Compared to other areas, one is not that bad. But one is also too many,” the councilman added.
Redick rejects the bank’s contention that the loan servicers are to blame. “The laws are very clear on this,” he asserted. “The owner of the property must maintain them within the laws that govern housing so that they do not attract undesirable elements.”
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.
Deutsche Bank’s liability is potentially in the hundreds of millions of dollars, said a spokesman for Trutanich.
The city attorney’s office is asking tenants who feel that they 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.
Deutsche has requested 60 days to file a response to the city’s lawsuit.