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How To Spot And Avoid Rental Scams

Published May 17, 2021

9 minute read

Devon Taylor

By Devon Taylor

There seems to be no end to the various scams found on the internet. Whether it’s the infamous “Nigerian Prince” or just another phishing email in your inbox, you need to be careful. One of the more common scams involves potential rental units. If you’re looking for a new apartment, condo, or house to rent, you need to be careful. Without a bit of due diligence, you could find yourself falling victim to fraudsters. Every year, thousands of people agree to rent a place that, well, doesn’t really exist. It’s only after they’ve paid some cash up front — an application fee, security deposit, or first and last month’s rent — that they realize it’s a scam. It’s very important to be able to identify these potential grifts. In this article, we talk about avoiding rental scams. Follow these tips in order to weed out fraudulent offers and protect your hard-earned money.

No In-Person Meeting

As a rule, you always want to see any potential space you’re planning to rent with your own eyes. Signing a rental agreement sight-unseen is never advisable. It’s a sure-fire way to get scammed. If the person responding to your rental inquires says they aren’t available to meet in person, sound the alarm bells.

There are some legitimate reasons that an in-person walkthrough might not be available. For example, maybe you’re moving to a new city in another state. It might not be feasible to travel all that distance just to look at an apartment. However, you should still request a real-time video walkthrough. Use Facetime, Zoom, Skype, or Google Meets — everyone should be used to these programs by now. This tactic should at least assure you that the property actually exists (although it won’t completely eliminate the possibility of fraud). If possible, consider sending a friend or relative (who is local) to check out the place on your behalf.

Pressure To Send A Deposit (In Cash)

Most rental deposits are provided by check. Monthly rent payments can be set-up so they come out of your bank account automatically, or automatically charged to a credit card. If a prospective landlord insists on cash payments, it should cause your Spidey Sense to tingle. This is especially true if you’re being pressured to provide an upfront deposit just to secure the apartment.

Unfortunately, cash can quickly disappear. You don’t have to search very hard to find stories of victims who handed over $1,000+ of cold, hard cash to secure a rental, only to have their “landlord” ghost them. You should always be weary of handing over money to a person you don’t really know or have only met online. If the landlord is legitimate, they’ll set-up proper payment procedures with you. Plus at least those digital payments are easier to prove in the case of a legal dispute. You can’t really prove handing over an envelope of cash.

Slow To Provide A Lease Agreement

Landlords that are the real deal will have a pre-written lease agreement available for you to sign. They basically use a template and fill in your relevant details. Any legitimate landlord will want you to sign one of these legally binding agreements. The contract basically guarantees you a place to live, in exchange for your rent payments. It actually protects you both, if either party tries to back out of the agreement.

So you should definitely be concerned if you find yourself dealing with someone who seems reluctant to provide a lease agreement. If they constantly tell you that it’s coming, but it never materializes, just walk away. (Especially if the lack of lease agreement comes paired with requests for payment.) Not having a lease agreement is usually a clear sign you might be dealing with a scam artist.

If you are provided a lease agreement, check it carefully. If it’s not filled out properly (wrong address listed, wrong rental price, wrong personal information, etc), it might be a fake. There are plenty of online templates that scammers can download online and try to pass off as the real thing.

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Moving In Immediately

Rental agreements always start (and end) on set dates. They typically start at the beginning of one month (on the 1st) and end after one or two years. Or 12 or 24 months in total. Sometimes, rental agreements need to be renewed or renegotiated after a set period of time. Alternatively, they may become month-to-month after the initial lease period elapses. Either way, you should consider it unusual if anyone wants you to move into an apartment immediately.

Scammers often use this pressure tactic in order to sweet talk you into forking over a deposit or first months rent. If you think you’re going to potentially lose out on a nice, new place, you might be convinced to break out the cash quickly. However, if you feel like you’re being pressured into moving into a new space quicker than normal, trust your instinct. It could be a scam. You shouldn’t feel any need to make a decision on a potential rental until you’re totally confident.

No Online Presence

If you’re looking to rent an apartment or condominium in any commercial building or major development, the building should have an online presence. The company managing the building should, at a minimum, have their own website. It should be complete with photos of the units they’re renting, as well as information on costs, features, and square footage. Even those who are merely renting out a single unit or part of their home (a spare room or basement apartment, for example) should have their listing on multiple websites.

Do some digging. If your potential new rental doesn’t seem attached to a larger property management company or isn’t really listed online in the usual places, think twice. It could be a sign that they are trying to stay under the radar. The bigger the online presence that your landlord or new rental space has, the more confident you can be.

The Price Doesn’t Make Sense

If something seems too good to be true, it probably is. That’s true of many things in life, but definitely when it comes to rent prices. When searching for a new place to rent, you should have an idea of what the average market rent is. If you come across a unit with an unusual price (too high or too low, but usually too low), take a step back. Something is probably amiss.

The property could be a “bait and switch.” That’s when an owner uses a really nice apartment to lure in potential renters, before suddenly taking it off the market and offering your a “similar” space. They want you to accept without viewing the new unit. That’s a mistake, because the “similar” unit will be considerably worse.

On the other hand, if the rent seems like a steal of a deal, that’s also a bad sign. Even if the space itself is legit, it could end up being a disaster — wonky appliances, noisy neighbors, infestations, or drafty windows. Shady landlords can also bait and switch you with a low attractive price. When you’re ready to sign, they’ll suddenly tell you the discounted unit is no longer available, but offer you a more expensive one. The truth, though, is that the lower priced unit (that seemed like an amazing deal) was never available in the first place.

Either way, the rent being charged should make sense to you. It should fit in with the rent being charged for equivalent units in the same neighbourhood. Do a bit of online research to make sure you know what is “normal” and what is “suspicious.”

No Screening Process

Professional landlords almost always have a set screening process. They use it to ensure they choose quality tenants. Remember, a landlord should be just as concerned about you as a tenant as you are about them as a potential landlord. If a landlord does not require a rental application, background check, or a credit check, that’s a big red flag.

If the landlord doesn’t screen you in any way, they are likely unconcerned about choosing a good tenant. That could mean it’s a total scam. Even if it’s not a scam, it’s still a huge concern. Not screening potential tenants is a sign of an inexperienced or negligent landlord. If they didn’t screen you, they probably didn’t screen any potential neighbors either. Either way, you should be suspicious. A thorough screening process is usually spelled out in the rental agreement.

Paying Before Signing

We already mentioned that it’s a bad sign if you’re pressured for cash. However, there’s another important note about money we need to mention. You should never provide any money to a landlord until a legally binding lease agreement is signed by both parties. That includes a security deposit, reservation fee, and especially first or last months rent.

If you’re asked for any money before you’ve signed an agreement, it’s a fairly obvious sign that the apartment is a scam. As a potential renter, you should never fork over any cash without a signed contract. Even application fees, which are sometimes used to cover the costs of background checks, should only be paid once the rental agreement has been inked.

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An Incomplete Agreement

Every renter needs to read through their new lease agreement carefully. You need to make sure it’s fully complete. Any landlord that asks you to sign an incomplete lease probably doesn’t have your best interests in mind. If there are glaring blank spots in the agreement, they could change the terms of the lease without letting you know. Especially if you just go ahead and sign it.

Make sure you go over your lease agreement carefully. You don’t want any incomplete sections or vague language. That kind of thing can only harm you down the road. If you have doubts, it’s worth paying for a qualified real estate lawyer to review the agreement before you sign. It might cost you a couple hundred bucks, but it’s money well-spent if it saves you from a rental disaster.

Sublets or Subleases

Sublets or subleases of rental units are a real and legitimate thing. They are often used when someone is renting a place, but needs to move out before the lease term is over. It’s common to see sublets among college students too, as they may sign a 12-month lease but only need to live in the unit for the eight months of the year that they are in school. If you need a short-term place to live, finding a sublease can be a viable solution.

However, sublets can also be used to scam you. Crooks have been known claim that a rental is a sublease in order to avoid paperwork, background checks, and other official documentation. To avoid being ripped off, always perform extra due diligence on a potential sublease. While they have their advantages, sublet situations can also be prone to fraud.

It’s Unclear Who The Owner Is

When you’re renting from an honest broker, it should be easy (and straightforward) to find out who the owner is. Whether it’s a major apartment building owned by a real estate company or a single townhouse owned by a single person, it’s always good to know who legally owns the space you are living in. You may need to interact with them over any questions, disputes, or required repairs.

If it’s difficult to figure out who actually owns the place, for any reason, you might want to reconsider. It could be a scam. Even if it’s not, you might quickly find that the owner is a slumlord who barely takes care of his properties. If you’re told that the owner is “out of the country,” that’s a major red flag. You should turn around and run from that deal. Any vague details are a sign that the potential landlord is keeping something a secret. That’s not a good sign for you, the renter.

Same Unit, Different Information

If you see the same apartment photos on various websites, but the listing contains different information and prices, you should steer clear. That’s a clear indication that a scam is being perpetuated. Be sure to scrutinize all the photos of any place you’re interested in renting. If they contain an ‘MLS’ watermark, they may been lifted directly from a realtor’s website. They could be part of a bait and switch scam, as previously discussed.

Real rental listings should contain the same information across the board. They should show the same photos and list the same features, size, conditions, and price. If you see conflicting listings for the same rental unit, it’s probably not legit. Just skip it and keep looking. (Or go ahead and report it as fraudulent, if you feel like fighting the good fight.)

The Bottom Line

Having to find a new place to live can be stressful. After all, you’re most likely looking for a place to call your home for the foreseeable future. So you don’t want to just settle for a crappy place. Or an overpriced one. And least of all, you don’t want your search for a new rental to end up being a scam. You can easily lose hundreds (or thousands) of dollars if you don’t watch for the red flags.

In today’s modern world, it’s easier than ever for scammers to post phony ads online, engage you via text messages or email, and demand electronic payment — all from the comfort of their own couch. Don’t fall for their tricks. Follow the advice in this article to make sure you you get a reliable rental with a reasonable price. A little extra due diligence will save you a lot of headaches down the road.

Rental Scams

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Devon Taylor

Contributor

Devon is an experienced writer and a father of three young children. He's simultaneously trying to build college funds and plan for an eventual retirement. He's been in online publishing since 2013 and has a degree from the University of Guelph. In his free time, he loves fanatically following the Blue Jays and Toronto FC, camping with his family, and playing video games.

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