Saturday, July 23, 2011


Chase Targeted In Proposed Class Action With Allegations Of Ignoring Legal Obligations, Violating Rights Of Tenants In Foreclosed Homes

The following excerpt has been lifted from a recent lawsuit, filed in Los Angeles, California and that seeks class action status, against JPMorgan Chase accusing it of illegal conduct designed to drive tenants in foreclosed properties out of their homes in violation of local rent control laws:
  • JP Morgan Chase Bank's "evict and sell" business model, in summary, goes as follows: When JP Morgan Chase Bank becomes the owner of a foreclosed property, JP Morgan Chase Bank chooses to evict whatever tenants reside at the property in order to enhance the property's sale prospects.

    JP Morgan Chase Bank has no intent in becoming a landlord of the property or to comply with the law as it concerns the innocent tenants residing on the property.

    In furtherance of JP Morgan Chase Bank's scheme, JP Morgan Chase Bank uses realtors to sell the properties and "handle" the tenants prior to eviction. The realtors only get paid if the property is sold, so the realtors do everything possible to force the tenants off the property.

    They have no incentive or desire to comply with LARSO [Los Angeles Rent Stabilization Ordinance] and help the respective foreclosing bank manage the rental property as a landlord.

    When JP Morgan Chase Bank cannot force tenants to vacate properties by deception and intimidation, JP Morgan Chase Bank resorts to high volume, "eviction millattorneys to handle the preparation and service of eviction notices and the filing of Unlawful Detainer complaints.

    The attorneys' job is not difficult and is to illegally force the tenant off the property in violation of LARSO by serving a notice to quit, wait the notice period (whether 30, 60, or 90 days), and then file a Judicial Council form unlawful detainer lawsuit. Under general State law, no reason is required for an eviction as long as the bank provides the proper notice period. As far as JP Morgan Chase Bank is concerned, the "evict and sell" business model is efficient, quick, and cheap.

    The "evict and sell" business model, though, is not legal in the City of Los Angeles, where an entire body of rent control laws protecting tenants - LARSO, protects tenants and promotes stable communities. Evictions must be supported by "good cause," rather than at the owner's whim.

    Moreover, landlords are required to pay tenants fixed relocation assistance when they intend on taking the rental unit off the market, which is the intent of all the banks, including JPMorgan Chase Bank, when foreclosing upon the subject properties, especially when the tenant resides in an "illegal unit."
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  • Many of these tenants that are being subjected to JP Morgan Chase Bank's "evict and sell" model are the poorest of the poor and live in intolerable conditions. Also, they do not know their rights or cannot defend themselves against these multi-billion dollar institutions bent on throwing them out of their homes.
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  • To further expedite the vacating ofthe units, JP Morgan Chase Bank generally refuses to undertake the necessary repairs or cuts the tenant's utilities. [...] Within the broader group ofLos Angeles tenants falling victim to the JP Morgan Chase Bank's "evict and sell" model, there is a subset of the poorest, often minority residents of Los Angeles living in basements, attics, garages, storage rooms, in corners of a house that have been haphazardly separated by drywall - all of which have been illegally converted into living quarters with varied levels of bathroom, kitchen, and entrance.

    These converted spaces share the same basis of illegality in that these now-dwelling units have been constructed without permits, without the watchful eye of local regulatory agencies, and not in conformity with the laws intended to protect the illegal unit's human habitants. Thus, these illegal units have not been granted a Certificate of Occupancy issued by the City ofLos Angeles Department of Building and Safety ("LADBS").

    Because of the inherent danger of these illegal units, the City of Los Angeles deems them "unapproved" for occupancy. In other words, their existence for the purpose of human habitation is illegal. In such situations, landlords are required to either (a)sufficiently remediate the illegal unit so as to obtain a Certificate of Occupancy and make it habitable, which the banks steadfastly refuse to do, or (b) relocate the tenant and pay the tenant a relocation fee fixed by LARSO.

    Notwithstanding JP Morgan Chase Bank's legal obligations as landlords under rent control, JP Morgan Chase Bank has instead chosen to steadfastly continue with its "evict and sell" model without paying the tenants relocation fees as mandated by LARSO.
For the entire lawsuit, see Gonzalez v. JPMorgan Chase Bank, National Association.

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