Saturday
August 19, 2017

Tenant Can't Sue Under Foreclosure Protection

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Tenant Can't Sue Under Foreclosure Protection

A federal appeals court dismisses a case brought for alleged violation of the Protecting Tenants at Foreclosure Act

Logan v. U.S. Bank National Association
9th U.S. Circuit Court of Appeals

A California tenant served with an eviction notice in 2009 by a bank that became the owner of the foreclosed property she was renting does not have the right to bring a private action against the bank for allegedly violating the 2009 Protecting Tenants at Foreclosure Act.

The PTFA requires owners of federally insured property to give tenants 90 days notice prior to eviction. The bank gave the tenant a notice of only three days, but it withdrew its eviction notice (unlawful detainer lawsuit) after the tenant filed a motion to dismiss the action in state court because of the alleged PTFA notice violation.

After the bank withdrew its unlawful detainer lawsuit, the tenant filed a lawsuit in federal court against the bank for its alleged PTFA violation, but the court dismissed the case on the grounds that unlawful detainer cases such as this one are properly addressed in state court. The court also dismissed the case on the grounds that the PTFA doesn’t include a private right of action, which is to say, it doesn’t give tenants the right to file a lawsuit against a property owner if they feel the law has been violated.

The tenant appealed, and in December 2009 the 9th U.S. Circuit Court of Appeals in California overruled the trial court on the issue of state jurisdiction for the case. The appeals court said unlawful detainer lawsuits are a routine civil law matter and don’t affect the state’s ability to enforce its own laws, and so it’s proper for a federal court to address a case like this. But the appeals court sided with the lower court on the other question, whether the PTFA gives tenants a right of private action. It doesn’t, the appeals court said, so it dismissed the tenant’s lawsuit, affirming the trial court on dismissal.

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