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Illegal use of loans by LL--don't banks have a duty now?

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Illegal use of loans by LL--don't banks have a duty now?

Postby Cold Hands in Queens » Fri Aug 10, 2007 10:14 am

All,

I seem to remember reading somewhere that banks are now responsible for following up with landlords to make sure that "building improvement" loans for "necessary repairs" are used for such. My deadbeat LL used his loan to repair the roof and fix up a unit (a longtime tenant died) to build himself a decorative brickwork facade for his private parking area and put a functionless cast iron fence around our garbage collection area.

I know which bank he took the loan with.

How to proceed?
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Postby cestmoi123 » Fri Aug 10, 2007 12:34 pm

I'd leave it. First off, it's between him and the bank, not you. Secondly, what possible interest could you have in putting your landlord in a more severe financial position? It's not like having a loan called would make him more willing/able to fix your issues...
cestmoi123
 

Postby TenantNet » Fri Aug 10, 2007 12:59 pm

Loans and mortgages are different things (even though the OP didn't mention mortgage). But a mortgage is still a loan.

Many of the mortgage papers I've seen require the LL to maintain the building, no violations and so forth. In essence, the bank is protecting its asset or collateral.

Normal loans might be unsecured or backed by other things, so they might not have similar language.

If it were a mortgage, getting a bank to put pressure on the LL to maintain the premises is fair and proper ... and occasionally successful.
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