Our CEO Scott Lewis appeared on Editors Roundtable this morning, and a caller shared a take about his landlord continuing to collect rent while he was in foreclosure.
While the editors talked about this situation, I sent Scott a text that said the situation was called “rent skimming” and is illegal, and he shared that text message on the air.
When I got to my desk, I looked up the official definition of rent skimming.
I want to clarify that rent skimming is more narrowly defined than just any landlord collecting rent while he or she is in foreclosure. Since we didn’t hear how long his landlord has owned his property, it’s possible what this caller was describing isn’t covered by the law.
There are two official ways someone can commit rent skimming:
• Collecting rent from a tenant in a residential property within the first year of owning that property, without applying that money to the payments due on the mortgages for that property.
• Collecting rents from a tenant in a residential property that you don’t own or operate on the owner’s behalf. This could be someone falsely claiming to own the property, or trespassing on the property to rent it out, or “any other unauthorized means.”
So if the caller’s landlord has owned his house for longer than a year, his situation is not likely covered by this rent skimming law.
We wrote about that second scenario in a story about a scam in 2008:
Late last summer, Robert Carreon searched online rental notices on Craigslist.org to find a house for himself, his wife and their three kids. A description of a four-bedroom, three-bathroom house with a three-car garage in Oceanside caught his eye. The rent price for the 2,600 square foot house seemed a bargain: $1,900 a month. Comparable houses might rent for up to $1,000 a month more.
“My jaw dropped,” Carreon said. He called the number in the ad, checked out the house on his own and set up a meeting with the property manager, who was from Newport Beach. In late October, Carreon met with the man, whom he remembers as an older gentleman clad in a Tommy Bahama shirt, slacks, nice shoes and a gold necklace and watch. The man drove to their meeting in a Mercedes-Benz.
Carreon and his family moved in soon after that meeting. They’d lived there for just a few months when a detective from the Oceanside Police Department fraud unit knocked on their door. The detective told Carreon there was a search warrant out for the man he’d rented the house from. The man, Bob Decker, was suspected of stealing a college student’s identity and buying the house in the student’s name without his knowledge.
If you’re a tenant with a landlord in foreclosure and you’re trying to navigate these tricky waters, one good resource is the Tenants Legal Center website.
— KELLY BENNETT