Colo. Rev. Stat. » Title 18
Colorado Revised Statutes

Colo. Rev. Stat. § 18-5-802 (2026)

Equity skimming of real property

✓ current as of July 2026
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(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(2) Repealed.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:

WARNING: PURCHASER, , WILL NOT ASSUME OR PAY ANY PRESENT MORTGAGE, DEEDS OF TRUST, OR OTHER LIENS OR ENCUMBRANCES AGAINST THE PROPERTY. THE SELLER, , UNDERSTANDS HE/SHE WILL REMAIN RESPONSIBLE FOR ALL PAYMENTS DUE ON SUCH MORTGAGES, DEEDS OF TRUST, OR OTHER LIENS OR ENCUMBRANCES AND FOR ANY DEFICIENCY JUDGMENT UPON FORECLOSURE.

I HAVE HAD THE FOREGOING READ TO ME AND UNDERSTAND THE PURCHASER, , WILL NOT ASSUME ANY PRESENT MORTGAGES, DEEDS OF TRUST, OR OTHER LIENS OR ENCUMBRANCES AGAINST THE PROPERTY DESCRIBED AS .

DATE SELLER .

Source: 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.

Notes of Decisions
Cited in 4 cases, 1992–1996 · leading case: People v. Phelps, 837 P.2d 755 (Colo. 1992).
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People v. Phelps, 837 P.2d 755 (Colo. 1992). · cites it 12× “The hearing board found, however, that on numerous occasions the respondent would take a deed to property subject to an FHA loan, make one mortgage payment, and then allow the property to gó into foreclosure, resulting in a loss to HUD.”
People v. Bell, 96 Cal. Daily Op. Serv. 3660 (Cal. Ct. App. 1996). “( Colo. Rev. Stat. § 18-5-802 .) In Florida it is a felony when, within a three-year period, with the intent to defraud, a purchase is made of two or more single, two-family, three-family or four-family dwellings that are subject to a loan that is in default at the time of the…”
People v. Koller, 873 P.2d 761 (Colo. 1994). “Although the practice of equity-skimming of real property is a class 5 felony, § 18-5-802(3), 8B C.R.S. (1993 Supp.), there was no indication in Phelps that the attorney was criminally prosecuted.”
People v. Franks, 866 P.2d 1375 (Colo. 1994). · cites it 2× “Phelps, 837 P.2d 755 (Colo.1992), we suspended the attorney-respondent for one year and one day for a pattern of conduct violating the equity skimming statute.”
— Colo. Rev. Stat. § 18-5-802(3) — 2 cases
People v. Koller, 873 P.2d 761 (Colo. 1994). “Although the practice of equity-skimming of real property is a class 5 felony, § 18-5-802(3), 8B C.R.S. (1993 Supp.), there was no indication in Phelps that the attorney was criminally prosecuted.”
People v. Franks, 866 P.2d 1375 (Colo. 1994). “Phelps, 837 P.2d 755 (Colo.1992), we suspended the attorney-respondent for one year and one day for a pattern of conduct violating the equity skimming statute.”
— Colo. Rev. Stat. § 18-5-802(6) — 1 case
People v. Phelps, 837 P.2d 755 (Colo. 1992). “The hearing board found, however, that on numerous occasions the respondent would take a deed to property subject to an FHA loan, make one mortgage payment, and then allow the property to gó into foreclosure, resulting in a loss to HUD.”
Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.