False Prior Rental Verifications
When a prospective tenant requests a rental agreement prior to viewing the property, the landlord may send the tenant a rental application packet. One of the documents that is typically included is a Rental Application Form that asks the potential tenant to state his or her employment and income.
Tenants who falsify their employment information on the rental application to qualify for the property, and who do not have enough income to actually pay the rent, may be subject to eviction proceedings. In addition, the landlord may be sued by the prospective tenant for making an inaccurate rental application.
Not Declaring the Real Number of Adults Living in the Apartment
A second-story apartment discovered by city inspectors. Note the wheelchair ramp and fake partition that appear to be enough to fool the city inspectors.
Tenants living in any rental property should take great care to check that the information they are provided is accurate. Of course, tenants should be able to trust that the landlord is being open and honest about how the place was constructed, what was done, and what else needs to be done. A tenant who warns another tenant about a potentially dangerous situation that could result from shoddy construction or poor maintenance increases the responsibility and risk of landlords who fail to take care of their property. For example, a tenant in a shared apartment complex may warn his or her neighbors of a broken sewage pipe, resulting in the authority having to give attention to the situation.
Tenants Doing Things to Reset the Eviction Process
Tenants often do everything they can to force an eviction. Sometimes they’re just looking for a way to break a lease. Other times it’s because they’re desperate to get out of the property for whatever reason, be it a nasty roommate situation, a property that’s broken, or whatever else.
Some tenants might offer to pay the rent if their landlord won’t evict them or will give them a refund if they leave before the next scheduled check out.
Some tenants might offer to pay the rent if their landlord won’t evict them or will give them a refund if they leave before the next scheduled check out. Stories of this have been spreading over the last couple of years, and unfortunately, some landlords are taking advantage of desperate tenants by taking a portion of a check refund.
The tenants find the landlord’s contact on Craigslist and email them asking for help. A few days later, the landlord receives a check for the current rent plus an additional sum. They cash the check, and then ask the tenants to sleep on the couch for a few nights, months, or years.
When the landlord hears that the tenants are moving out, they call the police and file the eviction.
Stealing Your Listing
Providing a Fake Credit Report
You also must periodically screen your tenants to ensure that they are still living up to their end of the rental agreement. If you fail to do this, you could find yourself holding a tenant responsible for the payment of a security deposit that the tenant has already paid.
One way a tenant can attempt to hold a landlord liable for wrongful termination of the tenancy is by claiming that the landlord violated the Fair Credit Reporting Act (FCRA) by obtaining a credit report without first verifying the accuracy of the information in that report. Tenants claim that a landlord violated the FCRA by using information in a credit report that is not relevant to the likelihood of a tenant’s de-fault. Tenants falsely claim that the failure to obtain a report of an applicant’s current and previous landlords violates the FCRA.
Changing Occupants Without Disclosing to the Landlord
Changing the occupant without disclosing it to the landlord is one of the most common scams which target landlords. We’ve written a detailed post to debunk the myths associated with it.
Here’s a quick snippet on the basic steps to understanding how the scam unfolds:
Tenants send landlord a money request to pay for the rented space as the tenant is vacating the property. The tenant either asks for an advance or pays the rent late.
Meanwhile, the tenant is inserting their new tenant in the lease.
New tenant comes to the existing tenant to disclose that they’re a new tenant and they don’t know about the old tenant.
Tenant asks the new tenant for an advance, lies about having made a mistake while entering the date of signing in the lease, and asks the new tenant to pay for the lease. That way, the tenant can keep the deposit amount.
Landlord believes it’s to cover the rent for the new tenant.
Landlord sends the tenant a check in the amount of the rent payable for the new tenant for the period.
Tenant keeps the advance to avail for any emergency. The new tenant has no idea about this.
The tenant sends the landlord the final amount of advance, minus the advance given to the new tenant.
Service Animal Discrimination
Unfortunately, in the real world of tenant scams, anything goes. In fact, there is still some tenant discrimination right in coastal Florida. An excellent real estate referral source has warned me about a new scam that is currently plaguing the live-in landlord, Hilary Taylor. A tenant has made the leap from driving for a day to, now, actually accessing her rental property via Uber.
Having someone arriving without prior notice has changed Taylor’s home security system on her home in Redington Shores, Florida. She has not only had to re-program her security system but will now not be able to replace it for months because the end of the merger between ADT and Honeywell has created a severe case of market saturation.
As the primary worker at my referrer’s real estate company, I can honestly say that as a dog lover I don’t know how she does it. Holding these man’s lives in the palm of her hand while dealing with the constant headache of problems.
In a weak spot all men are. Why do we allow ourselves to get moved around so easily by anyone who offers us attention that we so desperately need?
In a strong work and relationship relationship, I’ve found it helpful to keep in mind that most the strangers I meet are just not that interested in me.
Using Fraudulent Documents During the Application Process
During the application process, you lease holder is often required to give to the prospective tenant a variety of documents. The applicant may not have the necessary documentation, or may have obtained it through fraudulent means. Here are some tips for how to spot fictitious identification documents.
Printed registrations: This is a common method for rental applicants to falsify rental documents. The applicant has their actual driver's license or other government-issued photo ID. But the photo is bleached or digitized to make it illegible. The photo is then printed on a photocopier or digitally and laminated to make it look legitimate.
Completed applications: If the fraudulent
Document specifies that the applicant lives at another address but strangely gives the applicant's current mailing address instead, you can know the application was faked. Additionally, the applicant is willing to pay the extra application fee because they know the application will be approved.
Photocopies: There are a couple ways to spot these fake IDs. First of all, the photocopied mailing addresses are often misspelled, often with the applicants' last name. Another way involves matches of the photocopied address with the applicant's driving record. This oftentimes catches applicants who have driving records with multiple addresses.
Lying About Co-Tenants
If you’re a landlord, then you’ve likely had a co-tenant or two back down on whether they’re going to pay you for the month…sometimes outright lie to you about their financial situation, their plans to vacate, and about how long they’ve been a co-tenant of your rental property.
Before you think these are just isolated occurrences, realize there are over 20 types of tenant scams and deceit you need to know to better to detect warning signs and protect yourself and your property.
Below are a few of the most common tenant scams you’ll likely encounter.
Tenants Selling the Appliances
A non-paying tenant is pretty disappointing no matter when it happens, but it’s especially disappointing when the tenant is a truly rotten person. That rottenness is so rotten that it crosses a line that’s hard to forgive.
One way a tenant can try to get back at the landlord is by selling the appliances. If a tenant can’t pay the rent, there’s a chance that the tenant has a little furniture and appliances that could be purchased and sold. Since this is an illegal activity in many states, the tenant might be tempted to sell the things they can’t use.
However, there’s a small problem with this plan. Although it might seem like a brilliant way to get back at the landlord, it’s actually illegal. The tenant would not only be in violation of the lease agreement, but breaking the law for good measure. It’s not a very good idea to try this one.
The Phony HR Manager Scam
Wondering why you’re getting so many calls about a fake HR manager looking for rental referrals? The phony HR manager scam is where a person claims to be looking for a reliable renter to manage a rental property that they own. They want to meet you and they’ll give you a referral fee for the referral if you find them a good renter.
Usually, the phony HR manager comes from out of town, is also looking for a rental and will tell you they live out of town, but are trying to find a rental that is close to your current location. At the same time, they’ll play up being a hard worker, reliable and trustworthy. Think you’ve found your new tenant? They’ll probably ask you to make him or her an offer, but they’ll quickly reject the offer, claiming that another property is available that’s even closer to their real home. They’ll ask you to pass on the message and get them that specific property.
Not only will you miss out on a referral fee, but you’ll also found yourself out thousands of dollars for the tenant’s deposit in a bad rental property.
Selling Goods out of Their Apartment
If you’re considering tenant screening, you should know there are quite a few tenant scams that fall into the category of –selling out of their apartment”. This landlord scam appears most often when the tenant is trying to sell some type of electronics, like a flat-screen TV or a laptop.
The tenant may claim the item is broken but may still want to sell it. Sometimes, these tenant scams involve charging outrageous prices as well. These tenants may have been kicked out of their apartment for good reason.
The key to avoiding this tenant scam is to make sure your tenant passes your tenant screening before moving in – otherwise you’ll be setting up your property up to be targeted by tenant scams.
Scammers targeting this landlord scam may operate in a number of ways. If they’re targeting an apartment with a lease, they may pretend that they’re signing up for their apartment and use this to move in. Or, scammers may sell an item through craigslist or ebay. When the buyer comes to pick up the item, they’ll either claim the item never arrived at the apartment or that they have no use for it since they already moved out.
Writing a Check Larger Than the Move-In Amount
This scam is simple: The scammer writes a check that is larger than the move in amount, which he then deposits in his account. When the account receives the money, the scammer will report damage. The bank will then reimburse the landlord for the difference.
A variation of the check larger than move in amount scam is where the scammer will pay the move-in amount, then write a large check to his utility company. The utility company will then record a stop payment for the original check. When the landlord receives the check, the landlord will cover the stop payment and cover the utility company’s fees.
The scammer usually gives the landlord a generous discount up front, possibly covering the whole move-in amount. This is a way for the scammer to afford the initial deposit while not taking on any financial risks. Also, it allows the scammer to supply a bank statement with an amount so large that the landlord will either think the move in amount is too small, or will believe the scammer.
The scammer also gives the landlord a letter or a maintenance agreement to sign, if applicable. The contractor will sign and return the original document to the landlord.
No Intention of Paying Additional Rent
If the tenant had previously been named an official tenant and was subsequently evicted, and you note any damage on the premises or notice that the tenant is not keeping any of the terms of the lease term, you should take them to court to determine if they are receiving the shelter you are offering. Because the tenant’s information is available to the public, you can use this fact to determine if the tenant really intends to pay rent.
Additionally, you might want to obtain a written quit-claim deed from them so that you can use it in the case of a lawsuit. Additionally, it can be used to convince a judge or jury that the tenant has no intentions of paying rent to you.
No Intention of Paying the Rent
Scammers are waiting for the moment you either a) give them access to the property, rental property, or the tenants, or b) meet them at the rental property to give them access. Once they have access to the property or secure the tenants’ property, they’ll start looking for ways to deceive you into thinking they’ll pay the rent in a timely manner. It’s during this time that they’ll try to get your to enter into a lease agreement with them.
If a scammer has already filed a lawsuit against the tenants and has obtained a court order to evict them, he/she will threaten you with the same if you don’t assist them with the eviction. Sometimes if they are feeling particularly generous, they might send the tenants’ rent check to you as a way of coercing you into helping them.
Money Wiring Scams
When working with tenants, it’s particularly important to keep your eyes open and your mind safe ….follow these easy steps to clean up the money wiring scam, and protect your number and your bank account.
When tenants pay their rent with a money order or money wiring transfer, they’re basically doing two things – paying their rent and sending you money at the same time.
These secure forms of payment are great for landlords because they’re a relatively simple and secure way to pay rent, but they also provide a perfect opportunity for scammers.
The money wiring scam works just like this ….a landlord receives an email from a tenant, usually at a rented property, that they need to transfer money as quickly as possible (it’s a money wiring transfer, remember?). Because the landlord has no idea about this supposed money wiring transfer, he or she typically transfers the money wired to an account they’re holding in their own name.
Some of the email addresses connected to the money wiring scams might be real ….but you’ll notice that their names, the address of the property, and the amount wired are all different. As a result of these differences, the landlord has no way to trace the transfer.
Renting on Behalf of the Owner
Don’t Be Fooled
Many people believe that if they rent property on behalf of the owner, that’s the best way to avoid the responsibilities (and costs) associated with managing it. Unfortunately, this is thinking isn’t always accurate. You’ll be required to carry out your own basic maintenance, look after repairs, and make sure everything is in order.
It’s easy to become suspicious of tenants who have never lived in an apartment before. But these new tenants often have good reasons for renting! In fact, common narratives for renting on behalf of the owner include the following:
The owner is out of the country and won’t be available to show the apartment or meet new tenants until he (or she) gets back.
The owner wants to free up the apartment for a family member to move in.
The owner is moving but has temporarily given over their apartment to someone else for awhile until they can find their own new home (or are in the process of liquidating their assets).
The owner is having some work done on the property and wants to rent out their apartment while the work is being done.
The owner is putting their apartment up for sale and want to rent it before taking it off the market.
Late Payment Scam
What is it? A tenant requests an extension of time to pay rent. The extension often coincides with the tenant’s moving in. When the landlord agrees to a delay, the tenant often will not provide a check or cash, but instead promises to send the check when the check clears. Tenants often use a check that they already have on hand.
How it works: The trust of the landlord begins to erode as the tenants behave mysteriously.
The “Employer’s Check” Scam
Employers’ checks almost always look like valid payments made by the workers’ employers. If the check bounces, the scam artist gets a new check and preys on new victims. These checks are usually orders to pay recent payroll, pension, or retirement funds. If the landlord doesn’t cash or deposit the check, they will lose money on the transaction.
Here’s how it usually works: Once the landlord is sent an –Employer’s Check” in the mail, they will deposit it. At that point, the fraudster puts in a stop payment order to prevent the check from being cashed again. That’s how they can make money off of the transaction. After the stop payment is placed, the check will again be ordered to a new recipient. The fraudster then reports the bounced check to the new scam victim and will instruct them to stop payment on the check. The scammer then uses the funds either for themselves or to further the initial scam.
Tenant Damaging the Property & Reporting It to the Licensing & Inspections Department
This is the sketchiest situation and will almost always result in a final eviction.
If your tenant causes damage to the rental property, you’ll have no choice but to file an eviction. However, asking your tenant to pay for the damage is like flushing your money down the toilet.
By law, you have to first use an authorized third party, such as a property manager, to fix the damage that your tenant has caused. Only then, should you request payment from them.
If you allow a tenant to cause damage and have them hire an authorized third party to repair the damage, it’s like you’re an ATM. You’ll be expected to continue supplying them with money, and they will take advantage of this.
Be smart…be safe…know the tactics of the scam artists.
If you own or manage rental property and are even a little new to the real estate game, you’re already aware that you must be on your toes to protect yourself and your clients from the myriad of unscrupulous types who prey on homeowners like you. And unfortunately, the number of fraud-related real estate complaints has increased significantly from this time last year.
Prevention and preparedness are the best lines of defense to keep you protected from these criminal incidents. But with the help of the below article you’ll be equipped with the most common tenant scams so that you can protect yourself and your clients from these scams.
Here’s a sneak peek from the list of tenant scams:
One of the newest scams artists on the block are the identity thieves…no joke. They’ve started impersonating tenants and landlords and have made it their modus operandi to steal your money. Something called the "Internet of Things" is to blame for their rise in popularity: personal devices like fitness bands, smartwatches, and cell phones that are equipped with a weak wireless connection.