Bank Not Liable for Slip and Fall on Property It Had Recently Foreclosed On

In February 2011, Matthew McRoy slipped and fell on an icy sidewalk in front of a four-unit apartment building, injuring his arm. He sued the owner of the building for his injuries, as well as Bank of America. The owner, who lived in one unit and rented out the other three, had defaulted on his mortgage and had a foreclosure judgment entered against him back in November 2009. Still, there had been no sheriff’s sale by the time the accident occurred, even though the property had been vacant since the foreclosure judgment. The plaintiff therefore sued both parties, figuring at least one of them should be liable for his injuries.

Bank of America was able to remove itself from the lawsuit with a motion for summary judgment, and this decision was upheld on appeal by the New Jersey appellate court in McRoy v. Eskander.

Only commercial property owners are liable for sidewalk accidents

In order for either the homeowner or the bank to be liable, it would be necessary to classify the apartment building as commercial property, since residential property owners are not liable for injuries caused by sidewalk defects (see Property Owners Not Liable for Sidewalk Slip and Fall when They Did Not Cause the Dangerous Condition). If the property was commercial, then the owners had a duty to warn of or eliminate hazardous conditions on the sidewalk and could be liable for injuries caused by a failure to do so. This includes a duty to remove snow and ice when they have actual or constructive notice of the condition, meaning that they know or should know the about the icy, dangerous condition.

Foreclosing bank must take over control of premises to be liable for accidents on the property

Even assuming the apartment building was commercial property, there was still no reason to hold the Bank responsible for the sidewalk under the facts of this case, according to the court. To be liable, the bank would have to be the “mortgagee in possession,” meaning it had taken over management and control of the property. The Bank here actually did very little to manage the property. They only had yard work done once and never took any other action to preserve or improve the premises in any way, including the sidewalk. True, the Bank did pay the property taxes and water bill and occasionally drove by to see if the building was inhabited, but the court characterized these actions as steps taken to protect its collateral as opposed to exerting any control over the management of the property.

It is hard to know just how much more control the bank would have had to exercise over the property for the court to hold it liable for a sidewalk slip and fall. Perhaps Mr. McRoy will still be able to recover against the foreclosed owner, although it does not seem likely this defendant will have a lot of money available to pay any judgment entered against him.