In general, theft by conversion is an act that occurs when an individual legally takes possession of another individual’s personal property or money, then uses that personal property or money for their own purposes rather than for the purpose that the owner originally gave them permission for to use it.

For further clarity on this largely state-specific cause of action, consider the following example:

  • You own a beach house. To make extra pocket money one year, you decide to list your house on a rental platform. The rental platform allows guests to stay at your beach house in exchange for a fee. Right before the rental period for the summer season ends, your last set of rental guests throw a party that destroys the entire interior of your beach house. As a result, your beach house is now considered uninhabitable.

Under the above example, you may be able to recover damages by filing a claim for theft by conversion in civil court. Alternatively, some states recognize theft by conversion as a crime. In such states, you can report a theft by conversion to your local authorities and a prosecutor will decide whether or not to file charges against the alleged thief.

What Is the Difference between Conversion vs Theft?

The main difference between conversion and theft is that the latter involves an illegal taking, whereas the former does not. Instead, conversion occurs after the defendant receives permission to take or use the personal property and/or funds in question. The “conversion” occurs once the defendant uses the personal property or money for purposes that violate the original agreement and for their own personal gain.

Thus, in many cases, a conversion case will involve a breach of a lease or contract. A theft usually involves the physical taking of property by force or threat of force. A common example of conversion is when a person lends another person an item like a car or a tool and the borrower sells the rented or lent item to make a profit.

Another example would be if a real estate broker was entrusted with a homebuyer’s deposit check that was supposed to be placed in an escrow account, but used the homebuyer’s check to purchase a house for themselves instead.

When conversion cases arise in connection with leases, fixtures, or accounts associated with property, the rationale behind the action is that the thief interfered and intentionally deprived the true owner of the right to use and enjoy their own property.

Theft crimes, on the other hand, can occur in a number of different ways. For instance, theft can happen during a robbery, a burglary, or a shoplifting incident. Regardless of how a theft crime occurs, it always involves an illegal taking or a taking without the owner’s consent. It also typically involves the use of force.

What Are Some Examples of Theft by Conversion?

In addition to the examples provided in the above sections, another example of theft by conversion would be if the owner of a house asked a real estate broker to list and sell their house on their behalf and the real estate broker either kept it for themselves or sold it, but kept the profits from the sale.

A theft by conversion may also occur when a person rents a car from a rental company. However, at the end of the rental period, the person refuses to return the car and keeps it for themselves. Alternatively, it would also be considered a theft by conversion if the person opted to sell the car without the permission of the car rental company in order to make money.

One other example of theft by conversion is if a financial investor took the funds they were given by a client and used them to pay for a personal vacation, as opposed to investing the client’s money into the specified stocks or companies.

Again, the key to theft by conversion is that someone legally obtains possession of another’s personal property or money, then uses that personal property or money in a way that violates the owner’s original intent or use for it.

What Are Some Legal Penalties for Theft by Conversion?

As with other state specific crimes, the legal penalties for theft by conversion will often vary in accordance with the laws of a particular jurisdiction. Generally speaking, however, a person who is sued or facing charges for theft by conversion may be required to:

  • Return the money or personal property if such an act is possible;
  • Reimburse the owner for loss of use or loss of enjoyment of that personal property or money;
  • Serve a prison sentence for up to a year or longer;
  • Pay a set amount of civil fines, criminal fines, or both;
  • Pay additional damages for items that cannot be repaired or replaced; and/or
  • In rare cases, pay some amount of punitive damages.

It should be noted that the legal consequences in the above list may also vary depending on whether a person is being sued for damages in civil court by a private party or is being tried by a prosecutor or a district attorney in criminal court. Penalties, such as criminal fines and prison sentences, are those that will be issued when a person is convicted of theft by conversion charges.

Lastly, a person may also receive a conviction on their criminal record for either a misdemeanor or a felony crime. Although any time spent in prison can make it difficult to get a job, having a felony conviction on one’s criminal record usually impacts a person’s ability to get hired much more so than having a criminal record with a misdemeanor offense.

Is Theft by Conversion a Felony Charge?

In some states, theft by conversion may be charged as a felony crime. Similar to larceny and other theft crimes, theft by conversion may be charged as a felony when the amount of money or the value of personal property stolen reaches a certain threshold. Theft by conversion can also lead to felony charges if any force or threat of force was used when taking possession of the money or personal property.

The private owner whose personal property or money was stolen may also seek relief by bringing a theft by conversion lawsuit against the alleged thief. A theft by conversion lawsuit, usually referred to as simply a “conversion,” is a civil cause of action in which an injured party may recover damages from a defendant in civil court.

Do I Need a Lawyer If I Have Issues with Theft by Conversion?

You may want to consider hiring a local landlord-tenant attorney if you are experiencing issues involving a claim for theft by conversion. A qualified landlord-tenant attorney will be able to analyze the facts of your case and can determine whether you have a viable claim to bring a lawsuit. Your attorney will also be able to assist you in filing a claim for theft by conversion in civil court or can recommend some other legal options that may be better suited to your case.

In addition, your attorney can accompany you and provide legal representation during any court proceedings related to your theft by conversion case. Your attorney can also help you to recover the appropriate remedies based on the amount of money or the value of property that was taken from you in a theft by conversion incident.