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Landlords are often the victims of tenant scams. This article will explore some of the most common types of tenants that scam landlords, as well as protect you from these schemes and help recover your losses.
“Tenant fraudsters” are a type of scam that can happen to landladies. This is an article about 20 types of tenant scams every landlord needs to know.
Tenant scams are common, and landlords who do not have appropriate systems in place for screening tenants, collecting rentals, and creating the correct contract are often the victims. Scams like this might put your company at danger. We talked with professionals who explained the many forms of tenant scams that all landlords should be aware of and avoid.
To prevent renter scams, keep an eye out for the following warning flags:
1. False Rental Verifications in the Past
Bruce Ailion, Real Estate Agent & Attorney, RE/MAX Town and Country
False past rental verifications are the most typical renter fraud we see. Someone will answer the phone pretending to be the landlord of a property they either don’t reside in or aren’t the genuine landlord of. Comparing the place they claim to reside in to their credit report, reviewing social media, requesting utility bills in their name, and verifying the tax record owner is the person you are verifying rent with may all help you sort out these folks.
2. Failing to disclose the true number of adults residing in the apartment
Tammy Sorrento, Fireball’s Founder, Approves
Tenants not disclosing the exact number of visitors in the home is a classic renter fraud. Some people say they’re just reserving for a specific amount of people, but they’re really inviting a lot more than that. To avoid this, install a security camera at the front entrance to keep track of how many people are staying at your place.
3. Tenants Are Taking Steps to Restart the Eviction Process
One Stop Housing’s owner, Travis Vengroff
When a tenant pays a portion of their rent, such as $50 or $100, when they owe much more and are facing eviction, this is one of the most typical tenant scams. By accepting their cash, you are effectively restarting the eviction process from the beginning. Another fraud is when evicted renters beg for a few additional hours or an extra day to transfer their belongings on the day of the eviction. I’ve had folks practically squat in the residence by allowing them to remain an additional few hours, restarting the eviction procedure. It’s tough to evict an officer after they’ve left without having to start all over again.
4. Taking Advantage of Your Listing
Mesa Properties Inc.’s Business Development Manager, Sam Shwetz
Scammer takes your photographs and marketing description from Zillow and places it on Craigslist for 25% to 50% less than market value, then claims they had to leave town for business and need to rent their home out right enough. Because they are out of town, they convince prospects to send them a wire transfer for the security deposit and first month’s rent, and they tell them the keys are under the mat. Watermarking all images with their website or business name is a simple way for landlords to avoid this.
Providing a False Credit Report is No. 5 on the list.
SparkRental’s Director of Education, Brian Davis
One typical ruse used by professional tenants is to persuade the landlord to accept a credit report given by the tenant (rather than one performed by the landlord), and to hand over the keys after the lease is signed and a paper check is produced. The renter takes legal possession of the property as soon as the lease agreement is completed and the keys are given over. The only way to get them out is to go through the lengthy legal eviction procedure. Tenants in various jurisdictions have the option of delaying eviction for six to twelve months.
6. Switching Occupants Without Notifying the Landlord
Fantastic Services’ Cleaning Supervisor, Lily Cameron
When the individual who signs the contract and inspects the property is not the person who will be living there, a fraud occurs. Landlords may take a few measures, such as paying attention to who makes the ultimate choices about whether or not to rent the property. If the tenant phones or brings someone else to the visit and asks them to make a decision, it’s possible that the other person is the one who will reside in your home. Make sure the lease agreement has clear terms about who will inhabit the property. Landlords have the right to know who will really live in the house and to do a background check on them.
7. Discrimination Against Service Animals
Breyer Home Buyers owner Shawn Breyer
To field service animal fraudsters, request a doctor’s note and the doctor’s office phone number. This, however, does not necessarily exclude the possibility of a hoax. Applicants may simply fabricate a doctor’s letterhead, copy wording from the internet, and counterfeit a signature. If you suspect the doctor’s letter is a forgery, you may check its authenticity, but proceed with caution. You don’t want to demand another letter or refuse the renter right now. You’ll want to prevent having the FHA file a complaint against you.
Instead, write a letter to the doctor requesting confirmation that they prepared the service animal note for your application, along with a copy of the note. If you phone the doctor’s office directly, you’ll run afoul of federal regulations protecting patients’ privacy, and the physicians will most likely dodge the subject. If the doctor authored the message that you sent to them, they should be able to verify that it was written by them. If it’s a fraud, they’ll report their identity theft to the authorities, and you’ll find out about it.
8. During the application process, falsified documents are used
Angat Saini, Principal Lawyer & Founder, Accord Law
The production of bogus papers as part of the rental application is one of the most popular forms of tenant scams. Landlords should be aware that it is critical to double-check the information provided by renters in their job letters and reference letters. Many disappointed landlords would have been better off if they had only made a few phone calls to check the tenant’s job and previous landlords. It’s usually rather straightforward to discern which references are genuine and which are fake. Professional fraudsters use this strategy to get access to a property, and their checks begin to bounce soon thereafter. Being fooled into this fraud might cost landlords a few months’ rent while they file a lease termination and eviction application with a tribunal.
9. Making False Statements About Co-Tenants
Ted Bond, Jr., Landlord Rights Attorney, The Law Offices of Thaddeus M. Bond, Jr. & Associates, P.C.
A renter who lies about who they plan to have living with them is a regular fraud performed on landlords. Because of their criminal backgrounds or financial concerns, some renters withhold the identities of those who will be moving in. A landlord may face responsibility and legal concerns as a result of this. Insist on a clause in the lease that lists the names of everyone who is permitted to dwell on the property. A breach of such a clause may result in the lease being terminated immediately.
Tenants who are selling their appliances are number ten.
Lakeisha Johnson, Director of Property Management & Broker, Century 21 Link Real Estate
Our home warranty provider saw a rise in strange maintenance requests, ranging from A/C not functioning to electrical difficulties to plumbing issues, all of which were assessed to be above typical wear and tear. When the property manager eventually entered the house and took photos, we saw that the washer and dryer that came with the house were vanished, and a hole had appeared where the dryer vent should have been. The home was demolished, and the appliances were sold. A lot of this might have been prevented if the property had been inspected on a regular basis.
The HR Manager Scam (No. 11)
Attorney Rana Parsanj of Parsanj Law Group
The bogus HR manager scam usually includes a tenant’s friend or relative trying to get into a rental property. This fraud may also entail falsified W-2 pay stubs, which may persuade the property management that the renter works for a company when, in fact, they do not. One to two persons who are part of the con will often provide as references for the renter. These references are usually HR managers for the organization where the tenant is posing as an employee. One of the simplest methods to avoid this scam is to contact the firm where the fraudster is posing as an employee. You may simply reject their rental application if you discover that this firm does not exist or that they do not work for the real company they are claiming to work for.
12. They Make Money by Selling Things From Their Apartment
Adam Frisch, Managing Principal, Lee & Associates
Even if the goods being sold are legal, the Department of Buildings has the authority to fine the building because apartments are typically not zoned for business. Additionally, greater foot traffic from a company inside your building implies additional wear and tear on the structure, as well as noise and security concerns. Having superintendents and doormen keep an eye out for excessive traffic going to a particular unit, as well as making this apparent in the lease, may assist.
13. Writing a Check for a Sum Greater Than the Move-In Fee
Coldwell Banker Residential Real Estate’s April Kozlowski Palomino is a real estate agent.
Another con that prospective renters attempt on landlords is to draft a check that is greater than the move-in price and then demand that you pay the difference. Do not fall for this ruse; the check will very certainly be bad, and the money will be long gone. Simply request that they write a check for the full amount due at the time of move-in, or inform them that the money will be applied to future rent.
14. There are no plans to pay more rent
According to Rentometer, landlords should be especially cautious when doing background checks on applicants to verify that they have the financial means and will to pay their rent. Some tenant swindlers may move in with the goal of not paying any more rent. When you come by to collect the past due rent, they know they may remain rent-free for as long as the eviction processes take.
15. Rent Isn’t Going to Be Paid
Some renters are just interested in staying in the house for free and have no intention of paying the rent. Bounced checks should be avoided since they might be a symptom of a tenant scam. Apart from comprehensive tenant screening, Zumper recommends cashing all checks before to the move-in date to ensure that your renter is able to pay and that their checks are in excellent order.
Scams involving money wire transfers are number 16 on the list.
This is a tenant scam in which the property management gets a rental application from a foreign country. The foreign renters, according to Appfolio Property Manager, will write a certified check for more than is required and then request a return through wire transfer. The original certified check, however, is forged, and it might take weeks for it to bounce. Property managers lose the money they’ve sent offshore as a consequence of this. To avoid this, all international tenants should be required to pay using online payment networks.
17. Renting on the Owner’s Behalf
This is a fraud that both landlords and tenants should be aware of. According to FraudGuides.com, this is a fraud in which the con artist pretends to be assisting someone else in renting the home because the “owner” is unwell, abroad, or just too busy to speak with possible renters. The fraudster will leave after the tenants have been persuaded and the deposits have been collected. The tenant then finds that the house is either not for rent, or that the owners are away on business or vacation, or that the house is foreclosed.
18. Scam of Late Payment
Tenants who often make excuses for late payments should be avoided, according to JMK Property Investment. Landlords should have a clear policy in place for dealing with late payments, such as issuing a “late rent notice.” This is necessary to remind the renter of his responsibilities and to act as a warning that late payments will not be tolerated. Some renters just make excuses but have no intention of paying the rent.
Scam of the “Employer’s Check”
Landlords should be aware of a possible employer’s check fraud, according to Avail. This is similar to the wire transfer scam, however the renter claims to be relocating to the region for work, and his employer “relocates” him. He’ll then pay you with a “employer’s check,” which is often far greater than the amount you need, and then demand a return. If you get a check like this, it’s likely bogus, so be wary of any requests for a return.
20. Tenant Damaging the Property & Reporting It to the Licensing & Inspections Department
Allison Bethel, Real Estate Investing Analyst & Writer, Fit Small Business
A popular tenant scam involves a tenant destroying the rental property and then complaining to the Licensing and Inspections Department that the landlord has not completed necessary repairs, such as installing smoke alarms and properly functioning windows. The owner receives a citation from the Licensing and Inspections Department, which the renter uses as a reason not to pay rent. The tenant then lies to the judge about the residence having violations and claims that’s why they didn’t pay rent if the case proceeds to eviction court. This is why it’s critical to vet your renters, do frequent inspections, and have any property-related mail forwarded to an office or P.O. Box so you can keep track of it as it arrives.
Conclusion
The aforementioned sorts of tenant scams are only a handful of the various ways fraudsters attempt to deceive landlords. It’s a good idea to have a rigorous candidate screening procedure in place to safeguard your interests. Take your time when doing background and credit checks on possible renters, and always see them in person before allowing them to sign a lease and move in.
The “is tenant reports legit” is a scam that has been around for a while. It’s one of the many types of tenant scams that landlords need to be aware of.
Frequently Asked Questions
What scams might some unscrupulous tenants try to use during the tenant screening stage?
A: One scam would be to claim that they have been the victim of a crime, such as robbery or assault. Another one is to claim that they are not in the country legally and need proof of residency.
How do you know if your being scammed on a rental property?
A: If youre being asked to pay a lot more than the property is actually worth, this could be cause for suspicion. Additionally if there is an unusual lack of information on the property or its history, this should also raise your suspicions.
What are the complaints of the tenants?
A: There are no complaints for the time being.
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