Who's liable if you're injured in an accident on foreclosed property?

Property owners are required to take reasonable care to maintain their property and ensure it remains safe for visitors. If you are injured on a property, the owner is liable for your injuries if he either knew about or should have reasonably known about the hazard that caused them.

But what happens when you are injured on a property that has been subject to a foreclosure, which is now vacant of residents and bank-owned?

Who's liable if you're injured on foreclosed property?

New Jersey courts aren’t sure. A slip-and-fall case in the state appeals court recently found that Bank of America wasn’t responsible for injuries on the sidewalk in front of a foreclosed multi-unit apartment building that it had foreclosed on. 

Slip and fall accidents are frequently caused by hazardous conditions on property such as holes, uncovered wells, broken stairs, slippery walks, or accumulation of debris. Both private and commercial property owners are required by New Jersey premises liability law to remove snow and ice from their property within a certain period of time, to maintain their property in good repair and condition, and to take measures such as salting or sanding to ensure that their premises are safe for customers, employees and passersby. Commercial property owners are also required to maintain the sidewalks that abut their property, although residential owners are not.

In McRoy v. Eskander, however, the court found that the bank did not have the same duty as a normal “owner.” Matthew McRoy, who slipped and fell on an accumulation of snow and ice on the adjacent sidewalk, sued both the foreclosing bank and the previous owners of the property. Bank of America had completed the foreclosure proceedings, and a judgment had been entered, ending any rights the previous owners had to the property, when Mr. McRoy suffered his injuries. They failed to respond to the lawsuit, however, so a default judgment was entered against them; thus, the court did not decide whether the prior owners of the property would have been properly held liable for Mr. McRoy’s injuries.

After the previous owners lost their rights in the property, it was vacant for more than 14 months. During that time, Bank of America paid the property taxes and the water bill and inspected the building periodically to make sure it was vacant. It didn’t perform regular maintenance, although it had yard work done once.

The appeals court didn’t address the issue of whether the property was properly considered residential or commercial, but declared that the bank wasn’t considered a “mortgagee in possession,” which would have made it liable like an owner for maintenance and preventive upkeep.

Earlier this year, however, a federal judge applying New Jersey law in another personal injury lawsuit held that a bank had a duty of care to a plaintiff injured inside a home it had foreclosed upon. In that case, Charlton v. Wells Fargo Bank, a woman injured herself while accompanying a realtor to look at a home Wells Fargo Bank was offering for sale. That court’s different decision potentially hinged on Wells Fargo’s offering of that property for sale (an action that demonstrated ownership), but the court found that the Bank did have a duty like an owner to keep the premises safe (and was liable for her injuries because it had not fulfilled that duty). 

Some municipalities are proposing legislation to address this and ensure that someone remains responsible for hazardous conditions on vacant properties and any personal injuries that may result, but for now, liability is anything but clear. What is clear is that there is a grey area regarding premises liability in foreclosure cases which New Jersey courts will be addressing more and more as foreclosures continue to mount. 

If you have been injured in an accident on someone else's property, an experienced personal injury lawyer at The Mark Law Firm can help. Contact us today for a free consultation with a Newark personal injury lawyer to discuss whether you may have a claim for your personal injuries.