CA Foreclosure Law
Civil Code 890.
(1) "Rent skimming" means using revenue received from the
rental of a parcel of residential real property at any time during
the first year period after acquiring that property without first
applying the revenue or an equivalent amount to the payments due on
all mortgages and deeds of trust encumbering that property.
(2) For purposes of this section, "rent skimming" also means
receiving revenue from the rental of a parcel of residential real
property where the person receiving that revenue, without the consent
of the owner or owner's agent, asserted possession or ownership of
the residential property, whether under a false claim of title, by
trespass, or any other unauthorized means, rented the property to
another, and collected rents from the other person for the rental of
the property. This paragraph does not apply to any tenant,
subtenant, lessee, sublessee, or assignee, nor to any other hirer
having a lawful occupancy interest in the residential dwelling.
(b) "Multiple acts of rent skimming" means knowingly and willfully
rent skimming with respect to each of five or more parcels of
residential real property acquired within any two-year period.
(c) "Person" means any natural person, any form of business
organization, its officers and directors, and any natural person who
authorizes rent skimming or who, being in a position of control,
fails to prevent another from rent skimming.
(a) A seller of an interest in residential real property who
received a promissory note or other evidence of indebtedness for all
or a portion of its purchase price secured by a lien on the property
may bring an action against any person who has engaged in rent
skimming with respect to that property. A seller who prevails in the
action shall recover all actual damages and reasonable attorney's
fees and costs. The court may award any appropriate equitable
relief. The court shall award exemplary damages of not less than
three times the actual damages if the defendant has engaged in
multiple acts of rent skimming and may award exemplary damages in
(b) A seller of an interest in residential real property who
reacquires the interest from a person who has engaged in rent
skimming with respect to that property, or a law enforcement agency,
may request the court for an order declaring that the reacquired
interest is not encumbered by any lien that is or has the effect of a
judgment lien against the person who engaged in rent skimming if the
lien is not related to any improvement of the property and does not
represent security for loan proceeds made by a bona fide lien holder
without knowledge of facts constituting a violation of this title.
The motion or application shall be made with at least 30 days'
advance written notice to all persons who may be affected by the
order, including lienholders, and shall be granted unless the
interests of justice would not be served by such an order.
(c) A mortgagee or beneficiary under a deed of trust encumbering
residential real property may bring an action against a person who
has engaged in rent skimming with respect to that property as one of
multiple acts of rent skimming, whether or not the person has become
contractually bound by an obligation secured by the mortgage or deed
of trust. The mortgagee or beneficiary who prevails in the action
shall recover actual damages to the extent of the amount of the rent
collected on the encumbered property and attorney's fees and costs.
The court also may order any appropriate equitable relief and may
award exemplary damages.
(d) A tenant of residential real property may bring an action
against a person who has engaged in rent skimming with respect to
that property for the recovery of actual damages, including any
security, as defined in Section 1950.5, and moving expenses if the
property is sold at a foreclosure sale and the tenant was required to
move. A prevailing plaintiff in such an action shall be awarded
reasonable attorney's fees and costs. The court also may award
exemplary damages; it shall award exemplary damages of at least three
times the amount of actual damages if the payments due under any
deed of trust or mortgage were two or more months delinquent at the
time the tenant rented the premises or if the defendant has engaged
in multiple acts of rent skimming.
(e) The rights and remedies provided in this section are in
addition to any other rights and remedies provided by law.
(f) Rent skimming is unlawful, and any waiver of the provisions
of this section are void and unenforceable as contrary to public
(g) Sections 580a, 580b, 580d, and 726 of the Code of Civil
Procedure do not apply to any action brought under this title.
(a) Any person who engages in multiple acts of rent skimming
is subject to criminal prosecution. Each act of rent skimming
comprising the multiple acts of rent skimming shall be separately
alleged. A person found guilty of five acts shall be punished by
imprisonment in the state prison or by imprisonment in the county
jail for not more than one year, by a fine of not more than ten
thousand dollars ($10,000), or by both that fine and imprisonment. A
person found guilty of additional acts shall be separately punished
for each additional act by imprisonment in the state prison or by
imprisonment in the county jail for not more than one year, by a fine
of not more than ten thousand dollars ($10,000), or by both that
fine and imprisonment.
(b) If a defendant has been once previously convicted of a
violation of subdivision (a), any subsequent knowing and willful act
of rent skimming shall be punishable by imprisonment in the state
prison or by imprisonment in the county jail for not more than one
year, or by a fine of not more than ten thousand dollars ($10,000),
or by both that fine and imprisonment.
(c) A prosecution for a violation of this section shall be
commenced within three years after the date of the acquisition of the
last parcel of property that was the subject of the conduct for
which the defendant is prosecuted.
(d) The penalties under this section are in addition to any other
remedies or penalties provided by law for the conduct proscribed by
(a) It is an affirmative defense for a natural person who is a
defendant in a civil action brought under Section 891, or a criminal
action brought under Section 892, if all of the following occurred:
(1) The defendant used the rental revenue due but not paid to
holders of mortgages or deeds of trust to make payments to any of the
(A) Health care providers, as defined in paragraph (2) of
subdivision (c) of Section 6146 of the Business and Professions
Code, for the unforeseen and necessary medical treatment of the
defendant or his or her spouse, parents, or children.
(B) Licensed contractors or material suppliers to correct the
violation of any statute, ordinance, or regulation relating to the
habitability of the premises.
(2) The defendant made the payments within 30 days of receiving
the rental revenue.
(3) The defendant had no other source of funds from which to make
(b) The defendant has the burden of producing evidence of each
element of the defense specified in subdivision (a) in a criminal
action under Section 892 and the burden of proof of each element of
the defense in a civil action under Section 891.
sIf any provision of this title or the application thereof to
any person or circumstances is held to be unconstitutional, the
remainder of the title and the application of its provisions to other
persons and circumstances shall not be affected thereby.
As of May 1, 2007