Tips to Ensure You Don’t Get Conned
I recently read about a fake landlord scam in Edinburgh, in which prospective tenants are conned out of money by the fake landlord asking for a deposit before showing the property for rent – which, of course, is not for rent, and does not belong to the fake landlord. But it is not only tenants who get conned. Tenant scams are on the rise, and unsuspecting DIY buy-to-let landlords are the usual targets.
Here are the top seven tenant scams that cost buy-to-let landlords millions, and how to avoid them.
1. False Background Checks
It’s essential to run background checks on prospective tenants. These should protect you from poor tenants, those who cannot afford the rent, and those who have run scams on other landlords. Here’s the thing – scam merchants are likely to provide false details. They will get the mates to pose as previous landlords and current employers on the phone.
It’s critical that landlords conduct full tenant reference checks properly. They must double-check reference details, and never rely on contact details given to them by the tenant applicant. Read our article “11 Ways to Verify a Landlord Reference When Vetting Tenants” for more information.
2. Selling Your Appliances and Furniture
A popular tenant scam is selling appliances and furniture that have been supplied with the property. This is more likely to happen with tenants who refuse to pay rent. Not only are you down on the rent, but, when the tenant finally leaves, you’ll also need to replace the missing washing machine, cooker, fridge freezer, and anything else that has been sold.
You must take a property inventory and keep it updated. Regular property inspections will help you identify damage and missing property early. If the tenant does sell your appliances, evidence like this will be needed when you take the tenant to court.
3. Paying Rent with a Cheque Larger Than the Rental Amount
This tenant scam works by the tenant writing a cheque for a larger amount than is needed to pay the rent and then asking for cashback on the cheque. Gullible landlords accept the cheque and give the tenant a few hundred pounds back before discovering that the cheque bounces. The tenant doesn’t have enough funds in their account. They never did have. But now they have your money. Your rent doesn’t get paid.
Never get sucked into this scam. Never give the tenant cash on a cheque. Take the rent money and whatever else the tenant owes, and no more. The very best way to accept rent is to do so by direct credit.
4. Giving False Co-Tenant Details
Tenants may want to conceal the identity of their co-tenants if those co-tenants have poor credit or criminal records, or they don’t have the right to rent. If you don’t know who your tenants are, you could find yourself with legal problems in the future.
To avoid this, verify all your tenants and make certain that they provide all the documentation you need to know who they really are.
5. The Tenant Who Was Never Going to Pay Rent
This type of scam tenant is a serial scammer. They will pay the deposit and first month’s rent, and then never make another rental payment. You’ll need to go through the eviction process, and the tenant will make it as difficult as possible for you to get them out. They live rent-free, while you foot the bill and incur legal costs.
To avoid this scam, ensure you vet the tenant properly and put rental payments on direct debit.
6. The Damage and Report Scam
This scam sees the tenant deliberately damage your property and then report you to the local authority. The local authority may carry out a housing health and safety rating system risk assessment. If they find a hazard such as a broken boiler, you may be hit with sanctions. You are likely to be told to make repairs. The tenant refuses to pay the rent because of the damage.
It is likely that the tenant will have run this scam before. Comprehensive tenant vetting will uncover this. By ensuring that you maintain your property inventories and conduct regular property inspections, you’ll have the paper trail to prove that the damage was made maliciously. Our repair reporting system logs all reports of repairs, providing an indisputable ‘paper trail’ of reports – making this scam virtually impossible to run on our landlord clients.
The tenant rents your property and then sublets it to another tenant. You don’t know who is in your property. This type of scam may be run in two ways. First, by the tenant charging the subtenant more and continuing to pay the lower rental amount to you. Second, by taking several months’ rent in advance from the subtenant, and then disappearing, leaving you and the subtenant out of pocket.
To avoid this scam, vetting and regular property inspections are critical.
Live with passion