Defining Tenant Scams
As a landlord you must be knowledgeable of tenant scams. A landlord’s worst nightmare is to spend thousands of dollars, hours and energy into a rental property, only to be scammed by someone who never planned to pay a single dime. “There are a lot of tenants who actually prey on landlords, especially landlords who don’t know the landlord-tenant laws in their state,” said Sharon Hamilton, Real Estate Broker and Owner of Healthy Real Estate and Associates.” Tenant scammers find opportunities to withhold rent, squat on your property and reset the eviction process.”
Here are 5 tenant scams every landlord should lookout for while searching for quality tenants:
Tenant Scam: Lying About the Real Number of Occupants
This is a common scam. Some tenants are not forthcoming about the real number of adults that will occupy your property. Oftentimes, the people who are unaccounted for may have criminal histories or credit problems. “If tenants are not listing certain people on their initial application, there’s a reason,” Hamilton said. “There could be an adult who’s not supposed to be there that has a criminal background. Then, if a gruesome crime takes place on the property, guess who’s going to be responsible for the crime-scene cleanup? That’s right, the landlord.”
Plus, more people occupying a space means there will be more wear and tear on your property at a much faster rate.
Tenant Scam: Falsifying Documents
Tenants can generate fake pay stubs with the click of a button. They can easily dupe landlords into believing they can afford the rent. Then, once they become a tenant, their rental payments stop. As a landlord, to verify a rental application on your own, you can:
- Check all of the basic information listed on the paycheck stub
- Search for discrepancies in check numbers, formatting, and information listed on every check
- Ask for employment references
Tenant Scam: Staged Calls
Tenants will scam landlords into thinking they work for a company when they haven’t. To do this, they will add reputable company names and list fake numbers that will route to their friends or family members. When landlords call to verify, they ask them to pretend to be their employers. As a landlord, you must do your due diligence when verifying employment. To ensure that you are speaking directly with the employer, you can:
- Check the employer’s website to verify the company’s phone number and address.
- Blind call the employer’s main telephone line to verify employment.
Tenant Scam: Offer Several Months of Rent Payments in Advance
With this tenant scam landlords meet a tenant who wants to rush the verification process and skip straight to paying for several months’ worth of rent in advance. It can be tempting but don’t fall for this bait. “When people are willing to offer a year in advance and have a questionable sense of urgency, you have to be leery,” Hamilton said. “That payment will be the first and very last payment to you.”
Tenant Scam: Resetting the Eviction Process
Tenants who run scams are often knowledgeable of the tenant-landlord laws in their state. They know that there are several ways to reset the eviction process after you have filed for an eviction. You will be forced to start the eviction over if you:
- Accept a rental payment
- Allow the tenant stay for additional time (even if it’s a few hours)
In the end, scams can be extremely expensive and time-consuming for landlords. HREA offers tenant-screening services to assist landlords with locating good, long-term tenants. Our thorough process ensures that all information and documents listed on a tenant’s application is examined and cross-verified. We do not rush our verification process because we work to make sure our landlord-tenant relationships are a perfect match, just like a marriage.
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