Is rent skimming a felony?
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Is rent skimming a felony?
My brother is collecting rent from a tenant that leased his condo but is not paying the mortgage on the property (as it does not come close to the mortgage payment and he lost his job). I am concerned about legal action. From what I have read “Rent Skimming” varies from state to state. Does anyone know the legal implications?
Asked on July 18, 2010 under Real Estate Law, Connecticut
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
It is my understanding that is does indeed vary from state to state. Unless the law has recently changed (within the last year), it is not illegal per se to collect rent and not pay the mortgage in Connecticut. Some states, such as California, do have "rent skimming" statutes on the books and severe penalties. Your brother will have to pay the mortgage one way or another or lose the property in foreclosure. He has a right to make good on his loan "until the gavel falls" meaning until the last possible moment before the condo is sold to someone else. His right is primary as against other bidders. He should, though, seek some debt counseling help and maybe speak with the bank about a short sale of the condo or a loan modification. Good luck.
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