(1) A person commits the crime of equity skimming of real property if the person knowingly:
(a) Acquires an interest in real property that is encumbered by a loan
secured by a mortgage or deed of trust and the loan is in arrears at the time the
person acquires the interest or is placed in default within eighteen months after the
person acquires the interest; and
(b) Either:
(I) Fails to apply all rent derived from the person’s interest in the real
property first toward the satisfaction of all outstanding payments due on the loan
and second toward any fees due to any association of real property owners that
charges such fees for the upkeep of the housing facility, or common area including
buildings and grounds thereof, of which the real property is a part before
appropriating the remainder of such rent or any part thereof for any other purpose
except for the purpose of repairs necessary to prevent waste of the real property;
or
(II) After a foreclosure in which title has vested pursuant to section 38-38-501, C.R.S., collects rent on behalf of any person other than the owner of the real
property.
(2) Repealed.
(3) Equity skimming of real property is a class 5 felony.
(4) It shall be an affirmative defense to this section:
(a) That all deficiencies in all underlying encumbrances at the time of
acquisition have been fully satisfied and brought current and that, in addition, any
regular payments on the underlying encumbrances during the succeeding nine
months after the date of acquisition have been timely paid in full; except that this
shall not be an affirmative defense to a crime that includes the element set forth in
subparagraph (II) of paragraph (b) of subsection (1) of this section;
(b) That any fees due to an association of real property owners for the
upkeep of the housing facility, or common area including buildings and grounds
thereof, of which the real property is a part have been paid in full.
(5) The provisions of this section shall not apply to any bona fide lender who
accepts a deed in lieu of foreclosure or who forecloses upon the real property.
(6) The provisions of this section shall not apply to any bona fide purchaser
who acquires fee title in any real property without agreeing to pay all underlying
encumbrances and takes fee title subject to all underlying encumbrances, if the
following written, verbatim warning was provided to the seller in capital letters of
no less than ten-point, bold-faced type and acknowledged by the seller’s signature:
L. 87: Entire part added, p. 671, § 1, effective July 1. L. 89: (1)(b) and (4) amended, p. 907, § 1, effective April 24; (2) repealed and (3), (4)(a), and (6) amended, pp. 861, 838, §§ 156, 73, effective July 1. L. 2009: (1) and (4)(a) amended, (HB 09-1227), ch. 155, p. 668, § 1, effective September 1.
