With so much of the apartment rental process happening online these days, the risk of tenants or landlords falling victim to an apartment rental scam is abundant. However, individuals can protect themselves from fraud or apartment rental scams with some simple due diligence. The key is to know what red flags to look for and some of the common tricks bad guys use to take advantage of others. Join us below as we reveal the most common scams against tenants and landlords, how to avoid them, and what steps to take if you have been the victim of an apartment rental scam.
Common Apartment Rental Scams That Target Renters
An apartment rental scam can happen anywhere and to anyone. As a tenant looking for your next rental home, it is vital to know the warning signs to watch out for. Often, apartment rental scams involve someone falsely representing themselves or the property itself. Let’s review some of the more common signs of a scam below.
Too Good to Be True
We all love finding a bargain, but if a luxury property lists a surprisingly low monthly rental rate, it’s a red flag. However, a really desirable price could signal a few different scenarios. For example, if a new property comes on the market in a highly competitive area, they may flash a low rate to draw people in, only to up the rate later. Another scenario is the listing is fake on all counts, but either way, tenants should proceed cautiously with listings that seem too good to be true.
Stolen Photos and Listings
It is easy to steal and duplicate rental listings online, making this an easy scam for digital fraudsters. That said, tenants can look for a few key signs that something is not quite right. In many cases, the illegitimate ad created by scammers will copy the original word for word but route interested parties to different contact information. In addition, a scammer will take photos from various sources, including the MLS. So, if you see a rental ad that has MLS watermarked photos – BEWARE! Posting a watermarked photo means they do not have the original and are not associated with the actual property.
An Absentee Landlord
Finding a landlord who does not live near their rental unit is not uncommon throughout the rental industry. That said, legitimate landlords will have processes to deal with being far away, even from another country. However, a common apartment rental scam is getting the tenant to accept poor communication or not meeting in person. Also, scammers are quite good at making everything seem legit, even referencing a lawyer or third party looking after things while away. Finally, keep in mind; any legitimate property management company will still be willing to tour the property with you and provide the necessary paperwork. So, if you are getting the runaround based on the owner being “out of the country,” odds are it is a scam.
Who Needs Details?
Many rental listing sites restrict the length of ads landlords can post. While that may be the case, ads that are deliberately vague or lack even the most basic information should be viewed as suspect. Of course, not every property owner is a great writer, but a lack of detail can also be a red flag that the person knows nothing about the property or the area. Another facet to this scam is withholding the address, which prevents the tenant from fully vetting what little detail was provided. Also, always watch for incorrect grammar or unusual spellings of common words, as this could signal an internet scammer.
No Need for Showings, Just Sign
Choosing an apartment is both a practical and emotional choice. In general, tenants want and need to view the place in person before making a decision. That said, legitimate landlords will be eager to speak with and offer tours to any interested tenants. As the COVID pandemic remains a concern, many landlords offer virtual walkthroughs and are happy to accommodate tenants’ needs. However, a scammer will do anything they can to avoid you seeing the actual property, which is a huge red flag that they are not associated with the real listing. Additionally, some fraudulent parties will try to create urgency by telling the tenant they will miss out by waiting or not agreeing to the lease right away. Never sign anything until you have viewed the promised unit and are comfortable with your choice and the circumstances.
Lack of Any Screening Processes
Anyone who has ever rented an apartment knows that there is an application process that generally includes certain screening criteria. This screening process helps protect the landlord from problem tenants and ensures the applicant can afford the rental commitment. So, if the person you are in contact with shows no interest in obtaining background information, it could be an apartment rental scam. This is especially true if the fraudulent landlord asks for money up front with little to no tenant information. Unfortunately, if this is the case, the landlord is likely to disappear right along with the tenant’s money.
How Can Tenants Protect Themselves from Apartment Rental Scams?
Looking for red flags and following your gut instinct is important when searching for your next apartment home. Unfortunately, there are people out there looking to take advantage, and they are quite skilled. Check out these tips on how tenants can protect themselves from an apartment rental scam.
- Search the rental address to look for additional ads on other sites and verify the contact information is consistent. In addition, search for the company name or property manager listed, which may provide more insight into the legitimacy of the listing.
- Get all terms of the rental lease in writing, and do not sign anything until you can view the property that matches the listing.
- Obtain copies of all signed paperwork
- Never wire money or send any money overseas. Remember, this is similar to using cash, and there is no option for a refund, even if you were a victim of fraud and the scammers know this.
- Do not make payment before seeing the unit and signing the rental agreement.
- Be wary of high-pressure sales tactics and do not give in to intimidation.
- Do not provide your personal or financial details without first verifying the identity of the landlord.
Common Apartment Rental Scams That Target Landlords
Although apartment rental scams against tenants are common, landlords face risks as well. Let’s look at some of the issues landlords face and how they can recognize a potentially fraudulent situation.
False Information in the Application Process
For landlords, the application and screening process is crucial to making an informed and sound decision. However, tenants can lie or provide fraudulent proof of income, employment history, or rental verification through various means. Sadly, scammers use this tactic frequently to gain entry into a rental home, only to stop paying rent shortly thereafter. Some of this false information can include –
- Rental Verifications – Verifying previous rental history by contacting previous landlords is common practice. That said, scammers will provide false contact information, and the person answering is not actually a legitimate previous landlord. So, use utility bills or other means to help prove the tenant did live where they claim and confirm the previous landlord through tax records.
- Fake Credit Report – Some tenants may try to get landlords to accept a credit report they provided. While they could offer several legitimate-sounding reasons for doing this, accepting it is never a good idea. Thus, it could be a scam, or the tenant may be trying to hide some unsavory facet of their report. Therefore, always verify creditworthiness independently.
- Phony Employment Verification – With technology, it is easy to create fraudulent paystub documents to submit as proof of income. In addition, scammers may provide false contact information and route landlords to someone posing as an HR manager to verify employment.
Not Disclosing the Actual Occupants
In a lease agreement, all tenants over the age of 18 should adhere to all qualification requirements. In addition, any other occupants under the age of 18 need to be disclosed to the landlord. However, tenants committing fraud will not declare the correct number of occupants. In some cases, the fraudster rents the property for someone else entirely, and so the landlord will have no information for the actual occupant of their rental property.
Damage and Report
Landlords have an obligation to maintain a safe and habitable living standard as well as comply with all local building codes. In turn, tenants have a responsibility not to damage the unit and keep it in good condition. However, some tenants will cause damage and, instead of taking responsibility, will contact local authorities. If an inspection by authorities reveals the landlord is not making repairs for any reason, it may result in a citation or fines. The scammer will then use this as justification to not pay rent.
Hijacking the Lawful Eviction Process
One of the more common apartment rental scams is when tenants interfere with the lawful eviction process. They accomplish this by making small payments instead of what they owe. By landlords accepting this payment, it resets the clock on the eviction process. Not only does this buy them time, but they can also end up stretching out the eviction process to the detriment of the landlord. Also, if the tenant has been legally evicted, they may plead for just a little more time on the day of eviction. While the landlord may feel generous, this is a dangerous game. By allowing them to stay, the tenant could now become a squatter, meaning the process must start again.
Using the Unit for a Business
Residential properties are subject to certain zoning restrictions. Depending on the location, it is likely that the tenant will not be able to use the address as a registered business location. That said, it may not stop them from trying to sell items or conduct services using the premises. Not only is this a legal issue, but it can also contribute to –
- Risk of noise, nuisance, or other complaints from neighbors
- Security concerns
- Code violations
- Additional wear and tear
Questionable Checks in Higher Amounts
Exchanging funds is a task that requires diligence on the part of the landlord. It is vital to keep accurate records and avoid potential disputes or the risk of fraud. That said, landlords should always approach check payments with some degree of caution. Scammers may use checks written for a larger amount to get landlords to process the payment and issue a refund. It sounds simple enough, but the check was likely fraudulent, to begin with. Additionally, checks can easily bounce, and once the tenant has taken possession of the property, getting them out can be a lengthy process.
Ways Landlords Can Protect Themselves from Apartment Rental Scams
Landlords face many risks when deciding to rent out their homes. However, there are ways to prevent some of that risk when it comes to apartment rental scams. Check out our top suggestions below –
- Use a thorough screening process that independently verifies credit history.
- Verify previous landlord details before accepting them as a legitimate reference
- Carefully verify each tenant’s income and identity
- Always meet the prospective renter in person or through live video chat if there are COVID concerns
- Periodically search for your own property and report any fraudulent listings
- Never accept overpayment for rental property and ensure check payments clear before handing over the keys
- Do not agree to rent to someone “sight unseen.”
- Complete all pre-screening processes thoroughly regardless of the tenant’s urgency or your need to fill the unit.
What Should You Do If You Are a Victim of an Apartment Rental Scam?
Sadly, even with preparation and monitoring for the red flags, deception can still occur. If you have become the victim of any of the apartment rental scams mentioned above, understand that you are not alone. Thankfully, there are some legal measures tenants or landlords can access to report scams. That said, depending on each situation, you may need to take any or all of the following steps.
- Reach out to the site that the scammer used to post a fraudulent listing. Then, the website should remove the ad and report the scammer.
- Contact the local authorities and file a complaint. Once the scammer’s identity is found, it is possible to press charges and try and recover some financial losses.
- Report the situation to the FTC or Federal Trade Commission who helps protect individuals from entities misusing personal or financial information. Therefore, if the scammer represented themselves as a business they are not, the FTC may assist.
- File a formal complaint through the Internet Crime Complaint Center. This government agency assists individuals with crimes or fraud that have taken place online. Also, they work with other local authorities and government agencies to track down and resolve cases of internet fraud, including apartment rental scams.
- As a landlord, check with your local attorney general’s office or another qualified attorney familiar with fraud cases. They can further advise the next steps to take when dealing with tenant fraud.
With Professional Management You Can Rent with Confidence
Apartment rental scams are all around us, and becoming a victim can be frustrating and costly. However, when it comes to feeling confident in your decision, working with a professional and established property management company can assist both owners and tenants. As a tenant, you can rest assured that there will be a thorough screening process, Fair Housing compliant decisions, and transparent fees. On the other hand, owners also receive assurances that applicants are fully vetted, and a legally enforceable lease protects their investment.
At Bay Property Management Group, our focus is a rental property and rental property alone. We have the time-tested processes and experienced staff in place to provide top-notch customer service to all of our clients. For the latest listings or to inquire about our full-service rental management opportunities, give us a call today.