Are you in the market for a new home to rent? Or, are you a landlord looking for
your next tenant? If you answered yes to either, this article is for you!
Rental scams are a growing problem in today’s real estate market nationwide,
primarily in transactions where a licensed real estate agent isn’t utilized to
validate the property listing. Here are the most common examples of this type
of fraud you need to be aware of and how you can protect yourself.
Problem: Online classified ads are heavily
utilized by real estate scammers. Typically, they will create a listing for a
property at random, whether it’s known to be vacant or even a recently
rented/sold property, or they will all-together copy another person’s
legitimate posting of a property. In either case, since the property was
recently/is still active, the scammer has access to images of the home and the
address. The scammer will post an advertisement of the home but claim to be out
of state (or country) and unable to meet the potential tenants in person to
show the property. Once contact is made over email and lease is signed, the
scammer (aka the “landlord”) directs the tenants to wire money, after which
keys to the property will be mailed. Only, the keys never arrive.
Solution: Consider using a licensed real estate
agent to ensure you have access to legitimate property listings. An agent can
also help you review a lease prior to signing it so you can ensure you are
protected. If you chose not to use an agent, prior to committing to a lease you
will want to check with the county clerk where the property is located. This
way, you can ensure the person you are talking to is indeed the property owner.
Problem: A second type of real estate fraud
incorporates the use of fraudulent checks where the potential tenant is the
scammer. A check for the agreed upon amount, sometimes more, is sent to the
landlord with instructions to send a check back to the tenant for the
overpayment. Or, once the check has been cashed, the tenant will cancel the
agreement and ask the landlord for a refund, which prompts the landlord to
write their own, legitimate check to the tenant. Unfortunate for the landlord,
since the check will likely appear to clear through the bank before it’s found
to be counterfeit and the landlord is at a loss for the funds refunded to the
Solution: Before you accept payments and commit to
a lease, request references and proof of income from potential tenants. You
should also consider running a credit report to screen for payment history.
Another option for landlords is to utilize a property management company to
identify and screen potential tenants.
Visit the FBI’s website for additional tips and resources on
Common Rental and Real Estate Scams.