Tenant Can’t Sue Under Foreclosure Protection
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 a;ect 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, a;rming the trial court on dismissal. W
HAVE A DILEMMA?
Send your ethics questions
Bruce Aydt, ABR, CRB,
is senior vice president
and general counsel of
REALTORS®, in St. Louis
and a former chair of
Standards Committee. He
received NAR’s Distinguished
Service Award in 2012.
The Lowdown on Lockbox Access
Question: A buyer’s agent scheduled an inspection of an occupied home and the lockbox recorded entry to the
home with the agent’s code. I learned later that she was not in attendance with the buyer and inspector. Is it
a violation of the Code of Ethics for an agent to allow an inspector and a buyer into the house by themselves?
Isn’t this the same thing as giving the combination to a buyer to let them go through a property alone?
Answer: Unauthorized access is a violation of the
Code of Ethics, but what constitutes unauthorized
access depends on the listing agent’s agreement with
the property owner. Standard of Practice 1-16 applies
to listing brokers and agents. “R;;;;;;;® shall not
access or use, or permit or enable others to access or
use, listed or managed property on terms or condi-
tions other than those authorized by the owner or
seller.” Unauthorized access by cooperating brokers
is covered by Standard of Practice 3-9. “R;;;;;;;®
shall not provide access to listed property on terms
other than those established by the owner or the list-
So what is “unauthorized access?” Most listing
agreements provide that the owner authorizes the
use of the lockbox system under that system’s rules.
If the inspector is a member of the lockbox system,
then the inspector is authorized to enter the prop-
erty for the purposes allowed under the lockbox
rules. Most lockbox rules permit entry to a listed
property with an authorized lockbox for several
reasons, including inspection of the property.
However, if inspectors are not permitted to access lockboxes, then the buyer’s agent has violated
both the lockbox rules and the Code of Ethics by
permitting access by the inspector and buyer without the buyer’s agent’s presence. If the lockbox was
a combination variety and the listing agent gave the
buyer’s agent the combination for the buyer’s agent’s
needs in showing and inspections, the buyer’s agent
would not have authorization to give the combination to the inspector and buyer and would be in violation of the Code under Article 3 and Standard of
Practice 3-9. W
Logan v. U.S. Bank National Association
9th U.S. Circuit Court of Appeals [ ]