The nation's lenders may not be as safe as they thought from liability for cleanup of properties on which they hold mortgages.

A Connecticut banker is facing criminal charges in a state court for failure to clean up a commercial property on which his thrift made a loan, even though it never foreclosed on the property.

The case shifts the cleanup issue to a new arena. On the federal level, lenders had been reassured that they would not be held liable for most cleanups, even on foreclosed property, if they had no active role in managing the property. Legal sources said holding employees liable to criminal or civil charges in such cases was unusual.

The Connecticut banker, James Wallace, a commercial loan officer at People's Bank, Bridgeport, faces charges of failure to comply with a written order of a building inspector, a violation of a Connecticut building code. Mr. Wallace faces a fine or a jail sentence.

The charges were brought by a building inspector who wants banks to take building codes more seriously, and finds fault with their practice of not foreclosing on a mortgage in default to avoid responsibility for the property.

"They think this relieves them of liability and I disagree," said Gene Bolles, the building inspector in Vernon, Conn. An owner of the property is defined by Connecticut building code as anyone with an interest in the property, Mr. Bolles said, and in this case the bank has an interest. "It is my position that they are the owners whether they say so or not," he said.

"This is a very odd situation," said Barry Hartman, a lawyer at Kirkpatrick & Lockhart, New York, who has represented banks and property owners in environmental cases. Even so-called slum lords - owners who neglect residences - sometimes egregiously, rarely get a jail sentence, he said.

The Connecticut controversy started in July 1994, when Mr. Bolles sent an order of demolition to the owners, Sidney and Shari Shane, and to Mr. Wallace at People's Bank, following a fire. In August, Mr. Wallace responded, rejecting the order because the thrift did not have ownership of the property.

A local newspaper reported that the Shanes had abandoned the property and left the state.

A spokeswoman at People's Bank said the institution has repeatedly offered to pay for some of the cleanup, using insurance money. Mr. Bolles said that an offer from the thrift of $44,000 toward the $100,000 cleanup cost was not in good faith. The property is privately owned, and taxpayer money should not be used to clean it up, he said.

Mr. Bolles said he would be satisfied if the bank demolished the damaged buildings and cleaned up the property, which he said is hazardous.

"It is so simple and for the bank to allow it to go to this level is ludicrous," Mr. Bolles said.

A spokeswoman for the thrift disagreed.

"The use of criminal proceedings is out of line," said Jane S. Sharpe, vice president at People's Bank. "People's Bank is merely an innocent mortgage holder," she said. She said that the thrift's efforts, including the offer to contribute to the cleanup, were beyond any conceivable responsibility.

"This is obviously an effort to seek the deep pockets of a respected Connecticut bank," Ms. Sharpe said.

Mr. Hartman, the lawyer, said the logic of pressing criminal charges was hard to understand, particularly because the only connection the thrift had with the property was in funding a mortgage. Federal laws governing lender liability usually say that only those who have an active role in the management or upkeep of the property are liable.

"If he didn't have any factual connection to the building, then criminal charges would be unprecedented," Mr. Hartman said.

Mr. Bolles said he just wants people - and banks - to take building code violations more seriously.

"The building code is not something to be trifled with, and I think that is missed," he said.

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