Equity Skimming Statutes In Washington State, California, Florida

Equity skimming, which is generally (and very loosely) defined as a situation where a party obtains title to mortgaged property from another (typically with little or no out of pocket investment), and then proceeds to fail to make any mortgage payments while renting out the property (ie. "milking" the rent out of the property) until foreclosure takes place several months later, is the subject of specific statutes in a number of states.

In Washington State, equity skimming, as it is specifically defined by statute, is both a criminal act as well as an unfair or deceptive act or practice and unfair method of competition in the conduct of trade or commerce that is a basis for a civil lawsuit. For more, see Chapter 61.34 RCW - Equity skimming.

In California, the statutes addressing equity skimming (referred to as rent skimming in California) also provide a basis for both criminal prosecutions and civil lawsuits. For more, see Section 890 through Section 894 of the California Civil Code.

In Florida, the statute defining equity skimming provides for criminal sanctions only. The statute does not specifically create a private cause of action for the victim. For more, see Section 697.08, Florida Statutes. (It wouldn't surprise me, however, if such conduct violates the Florida Deceptive and Unfair Trade Practices Act - Section 501.201-501.213, Florida Statutes, which does provide a basis for a civil lawsuit.)