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Landlord Fraud and Scams: What to Watch Out For

RentSimple was chosen as a contributor to the following Blog Article published by our friends at RedFin! Access the original article here.

Whenever you make a large purchase, it’s important to be on the lookout for potential fraud. Renting a home is no exception. While technology has made the rental process easier, it has also enabled opportunistic swindlers to victimize renters with just a few clicks. To prevent this from happening to you, we teamed up with experts from San Diego, CA, to Pittsburgh, PA, for tips to avoid landlord fraud.

Landlord Fraud and Scams

1) Verify the listing on Google

While technology saves tenants so much time, unfortunately, it also makes rental scams easier to perpetuate. One tip is to use technology to quickly verify that your landlord owns the property using the county’s online public tax records. Try using Google to search for the county tax records. If the property owner’s name doesn’t match the landlord’s name, this is a possible red flag. 

2) Request the land title documents

One way renters can head off landlord fraud and protect themselves from fake landlords and listings is to ask for confirmation of identity and ownership. Tenants are well within their rights to request land title documents or other documentation showing that the landlord does own the property in question. Here at liv.rent, we have extensive verification processes for both user profiles and listings, so renters can proceed confidently knowing that they’re dealing with real landlords and rental properties. 

3) Look for licensed companies

Always rent from a licensed property management company with an office to be extra safe. Otherwise, always see the place in person. Before paying any money, get a copy of their ID that matches who you met. A recent tip I gave to a family member was to ask the person you’re making the check out to if they are the owner. If they say yes, then ownership can be looked up quickly by a real estate professional or attorney. They’ll likely do this for you, especially if you offer a positive online review.

Rent deposits should be made to a licensed management company or the owner directly whenever possible. A real estate professional can catch more experienced fraudsters after reviewing the title, lease, and recent communications. You can always call a real estate attorney and pay a small fee for them to spend an hour with you looking for signs of possible fraud before paying the deposit. 

4) Do a Google image search of the property

Do a Google image search of the images shown on the listing. Fraudsters will steal images from other listings when creating theirs. If you see another home with the same pictures listed elsewhere, proceed with caution. 

Landlord Fraud and Scams

5) Ask the right questions

My best advice for somebody looking for an apartment is to make sure you are dealing with an actual owner or property manager. Ask a question or two that the property manager or owner would know right away. These questions could be, “what school district is it in?” “How close is it to downtown?” “Is it on a bus line?” Then, verify the answers are correct. Also, this is most important, if it sounds too good to be true, it’s fraud.

Many scams involve only viewing pictures, wiring, or PayPal money without needing to fill out an application, etc. A legitimate landlord will want to know who they are renting to. Anybody telling you the keys will be in the mailbox after you send them the money is up to no good. Finally, if you see the same property listed two times and one price is way lower than the other, the lower price is not real. Scammers take pictures from legitimate ads, lower prices, and trick people to send them money. 

6) Cross-check multiple sources

It’s important to verify the listing over multiple source channels when looking at the listing. Usually, fraudulent listings use stolen pictures from a legitimate source. Smart property managers will watermark their images with their logo to make it difficult to steal pictures and place them on a different listing site. To avoid being duped, if you see a rental that appears to be too good to be true, look up the address to see if there’s a legitimate listing source which the scammer could have stolen it from. 

7) Beware of fraudulent discount prices

Read your lease agreement. Landlords are increasingly putting in “discounted” rental prices to quickly and significantly raise annual rent later on. Sometimes these discount provisions are buried deep in the agreement so that some renters mistakenly overlook them. So when you see the rental price, make sure this wasn’t offered at a discount, and try to see what the actual rental price is. Make sure you read the lease agreement carefully, as you might find an unsavory clause buried deep within the agreement. 

Landlord Fraud and Scams

8) Make sure the landlord is accessible

A good indication that a rental listing is a scam is that there’s no way to contact the landlord or property manager by phone. If the landlord or property manager insists on communication through text or email only, ask them to speak on the phone and set up an appointment to view the property before taking any other steps to rent the unit. Any landlord or property manager that knows what they are doing will want to talk to you and meet you in person at the property.

9) Make sure the landlord actually owns the building

Make sure that the landlord owns the property. Unfortunately, there are con artists out there who don’t own the property when they accept money from you to rent the property. How do you do this? You can ask a realtor, lawyer, or title company. They often subscribe to services that give you up-to-date, publicly available information that lets you know who the real owner is. 

10) Suspiciously low prices could be a sign of landlord fraud

If the house is priced very low or seems too good to be true, it might be a scam. Listen to your gut. If something feels off, you’re probably right. – 

11) Steer clear of handshake deals

Back in the day, landlords would rent units with verbal agreements known as “handshake deals.” From time to time, we still find older-generation landlords running their rentals in this manner and are seeing more scammers using the “no lease required” bonus in their ads. Here’s why tenants and landlords need to sign a lease. Leases are a legal document that covers both parties.

With no lease in place, a tenant will not have it in writing who is responsible for utilities, landscaping, appliance repair, and other items. Verbal agreements often lead to issues of “he said, she said” arguments which end up in court. Bottom line: insist on a written agreement with pertinent information detailed to cover both you, the tenant, and the landlord. If the landlord refuses, they’re likely trying to defraud you. 

12) Be on the lookout for common red flags

When we hear about tenants being victims of fraud, we see a couple of warning signs. The apartment listing price is much lower than comparable apartments in the neighborhood. The landlord asks for money upfront before they have even asked for your application or you have seen the property. To avoid being conned, I recommend tenants do an internet search for the property address or name of the person they are dealing with. You are probably not their first victim, and someone may have written about it online. Also, follow your gut. If something doesn’t feel right, it probably isn’t. 

13) Do a background check on the landlord

If tenants want to avoid landlord fraud, they should meet the alleged landlord at the property, ensure they have keys to the property, check the photo identification of the landlord, and make sure that name can be found on Google concerning the property. The vast majority of scams are from parties having only an internet-based relationship with the victims, which is for the purpose of not being caught. 

14) Do your homework before signing the lease

Don’t let a rogue landlord swindle you—screen them first. So, before paying a security deposit and parting with the first month’s rent, screen the landlord as carefully as they screen you. Check references, verify proof of ownership, meet the landlord in person and never rent sight-unseen to avoid getting cheated. – 

15) Watch out for fake agencies

Fraudsters are taking advantage of the fact that the real estate industry is full of agencies. It’s very easy for them to masquerade as an agency and take advantage of renters. They’ll pressure you to wire money by leveraging your desire to secure a space. So it’s extremely important to research any agency you consider working with to make sure it’s legitimate. –

 Rental fraud can be a two-way street. Here are some tips for landlords to avoid falling victim to con artists.

16) Watermark your listing photos

Rental fraud is an ongoing cat and mouse battle. To keep scammers from using your listings to fool unexpected applicants looking for a home, consider the following:  First, watermark your listing photos so con artists can’t crop them out. Also, don’t use Craigslist and be cautious with Facebook Marketplace. Lastly, use electronic locks that cycle codes after use for showings. 

17) Watch out for organized crime groups

Landlords must be diligent. Many scams and organized crime groups operate in the residential property market. Landlords should always ensure they carry out reference and identity checks and keep records of these. They should also ensure that they use a comprehensive tenancy agreement that includes terms meeting their needs and consider using a break clause to allow the landlord to terminate the agreement early if issues arise. 

*RentSimple does not provide legal, financial, or tax advice. This article is for informational purposes only and is not a substitute for professional advice from a licensed attorney, financial advisor, or tax professional.