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How to be alert or tenant scam

A number of tenant scams happen regularly, victimizing landlords who do not have effective procedures in place for screening renters, collecting rents, and writing the right contract. These scams can pose a great risk

You are running a business, not a charity. Have contact info for charities for people facing homelessness ready, but it isn’t your problem to house people who can’t afford the rent. You need to take care of your own family, and I’m assuming that you rent out property professionally and not as a charitable activity.

You’ve probably heard the old saying to “Hire slow and fire fast.” In this case, rent slow, evict fast. Do your due diligence to make sure that your prospective renter can afford the rent not only right now, but for the foreseeable future.


Here are the red flags you should watch out for to avoid tenant scams:
 
1. False Prior Rental Verification

The most common tenant scam we find is false prior rental verifications. Someone will answer the phone as the landlord of a property they either did not live in or was not really the actual landlord of the property they live in. Comparing the property they claim to live in to the credit report, searching social media, asking for utility bills in their name, and confirming the tax record owner is the person you are verifying rent with can help weed these people out.

2. Not Declaring the Real Number of Adults Living in the Apartment

One common tenant scam is tenants are not declaring the correct number of guests in the property. Some are only reserving for a certain number of guests, but really are inviting more than the originally agreed number. To prevent this, it’s best to get a security camera at the front door to monitor the number of guests staying in your property.

3. Tenants Doing Things to Reset the Eviction Process

One of the most common tenant scams is when a tenant pays partial rent, when they owe significantly more and are in the eviction process. By accepting their payment you are resetting the clock on the eviction and you’re being forced to start the entire eviction from scratch. Another scam is when former tenants who have been evicted will, on the day of the eviction, ask for a few more hours or an extra day to move their things. By allowing them to stay the extra few hours, I’ve had people basically squat in the dwelling, resetting the eviction process again. Once the officer leaves, it’s difficult to force them out without starting from scratch again.

4. Changing Occupants without Disclosing to the Landlord

This type of scam happens when the person who signs the contract and views the property is not the person who will be living there. There are a few ways landlords can take precautions, such as paying attention to who takes the final decisions to rent the place. If the tenant calls or brings someone else at the visit and asks them to decide, then the other person might be the one who would actually live in your property. Make sure to include specific clauses in the tenancy agreement concerning who will occupy the property. The landlords have the right to know who will really occupy the property and run a background check on them too.

5. Using Fraudulent Documents During the Application Process

One of the most common types of tenant scams is the creation of fraudulent documents that form part of the rental application. Landlords need to know that it is important to verify the details that tenants provide in their employment letter and reference letters. Many disgruntled landlords could be better off had they simply made a few calls to verify employment details and former landlords of the tenant. It is often quite easy to tell which references are legitimate and which are fraudulent. There are professional scammers who employ this method in order to get into a property, and shortly thereafter their checks begin to bounce. Being duped into this scam can cost landlords a few months’ rent while they apply to a tribunal to have the tenancy terminated and the tenant evicted.

6. Lying About Co-Tenants

A common scam perpetrated on landlords is a tenant who lies about who they intend to have living with them. Some tenants conceal the names of who will move in because of their criminal histories or credit issues. This could create liability and legal issues for a landlord. Insist upon language in the lease stating the names of all people allowed to live on the property. Breach of such a provision can be grounds for immediate lease termination

7. Writing a Check Larger Than the Move-In Amount

Another scam prospective tenants try to pull on landlords is they will write a check that is larger than the move-in amount and at some point ask that you just pay them the difference. Do not fall for this one; the check will likely be bad and they are long gone with the money. Simply ask for them to write a check for the actual move-in amount or tell them you will apply it to future rent.

8. No Intention of Paying the Rent

Some tenants really have no intention of paying the rent and just want to stay in the property for free. Be careful of bounced checks, as these can be a sign of a tenant scam. According to Rentroomi, aside from thorough tenant screening, it’s best to cash all the checks before the move-in date to be sure that your tenant is actually able to pay and that their checks are really good.

9. Money Wiring Scams

This is the type of tenant scam where the property manager receives a rental application from overseas. According to the sources, the overseas tenants will send a certified check amounting to more than what is needed and will then ask for a refund via wire transfer. However, the initial certified check provided is fraudulent, but it will often take weeks to bounce. This results in property managers losing the money they’ve wired overseas. To prevent this, it’s best to require all overseas renters to pay via online payment platforms.

10. Renting on Behalf of the Owner

This is a type of scam that both landlords and renters need to watch out for. According to Rentroomi, this is the scam where the scam artist claims to be helping someone else rent the property because the “owner” is sick, overseas, or just too busy to talk to the potential tenants. Once the scammer has convinced the renters and collects the deposits, he’ll be gone. The renter then discovers the home was either not for rent, or the owners are away for business or pleasure, or it’s a foreclosed property.

Bottom Line

The types of tenant scams mentioned above are just a few of the many ways scammers will try to defraud landlords. To protect your interests, it’s recommended to have a thorough applicant screening process in place. Take your time in doing your background and credit checks, and always meet the potential tenants in person before you allow them to sign the lease and move in.