The Californian city will go ahead with civil action against the bank, subsidiaries of which bought up over 2,000 properties during the US housing boom, Reuters news agency reported.
Slamming the bank as a “slumlord,” Los Angeles accused it of illegally evicting low-income tenants to sell houses off at a higher price, letting empty properties fall into disrepair and failing to maintain those being lived in, the website of Der Spiegel magazine reported on Thursday.
Poorer areas have been mostly affected, the city claimed. It added that Deutsche Bank's behaviour had pushed down property value and piled extra stress on the Los Angeles's public services.
Deutsche Bank has told the Los Angeles court that it will fight against the charges and that it does not have responsibility over the addresses in question.
Spokesman from the bank Duncan King told Reuters that “the bank is disappointed in...allowing the case to proceed, we continue to believe the Los Angeles City Attorney has sued the wrong party and will continue to defend ourselves vigorously."
It the city wins the case, the court may order Deutsche Bank to bring properties up to scratch and stop evicting people.
The bank's property branch is no stranger to legal troubles. Der Spiegel reported that paid out a €202 million settlement after it's US subsidiary MortgageIT was sued.