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How Not to Get Scammed by Renters

Most warnings and media stories about scams on rental listing sites such as Craigslist focus on helping renters avoid scams, but landlords and property managers are often targeted as well. Here are some of the most common ways in which property managers and landlords find themselves getting scammed — and how they can prevent it.

Scammers can harm property management companies if those companies don’t take precautions. 

False Check Refunds

Impostors pose as renters who agree to pay a security deposit and rent without viewing the properties. Then the impostors send fraudulent cashier’s checks in excess of the stated amounts and request that landlords to return the overages. After sending a “partial refund,” unsuspecting landlords later learn the up-front payments were counterfeit.

Lawsuit Scams

These scams involve flesh-and-blood tenants actually signing a lease agreement and moving in – only to invent an excuse for a lawsuit.  This could be failure to provide lead paint documentation, or “mold in the duct work” or really anything that sounds scary and serious to sympathetic listeners. Even if the tenants eventually lose the lawsuit, they can still often live for free while the landlord is entangled in the suit, as the courts may put a stay on any eviction proceedings until the lawsuit is decided (which can take a long time, with plenty of delaying tactics available to plaintiffs). While the law technically states the landlord can pursue the tenant for lost rent, how does one collect a judgment from someone with no assets or traceable income?

Smoke-and-Mirrors Scam

Scammers steal pictures and property descriptions from authentic rental listings, and post them elsewhere online to lure unsuspecting renters. The alternative postings include below-market pricing and contain fake email addresses or 800-numbers, which the scammer uses to draw renters into some nefarious scheme. For the landlord, their legitimate listing is, at best, passed over by tenants clicking on the lower price option, and can create suspicions that the legitimate listing is a scam as well.

Owners and property managers in larger U.S. and Canadian cities are at higher risk because scam artists know that larger cities have a larger pool of renters. Internet fraud is a numbers game: If only .01% of viewers fall for a scam, then larger markets mean more victims, with little additional work required per victim.

How Property Managers Can Defend Against Rental Scams

Here are some ways in which landlords and property managers can guard against these scams:

Limit Information: Publish limited information on the Internet regarding yourself and your properties. Post the intersection instead of the full street address. Serious prospects will call, providing you the opportunity to conduct a phone screening prior to divulging sensitive information.

Alternate phone number: Never use your cell or home phone in your rental ads. Consider free options such as Google Voice to receive calls on your cell phone without giving away your true phone number. You may also opt to use only a generic email address or utilize Craigslist’s anonymized email function.

Telephone screening: Always conduct a preliminary background check via telephone prior to showing the property. Scammers will be uncomfortable answering many questions, and will resist deeper inquiries.

When doing a more complete screening after showing the property to an interested tenant, be sure to verify their employment, income, credit history, criminal background, and check their civil case history. If they have ever sued a landlord, keep searching – there are plenty of qualified tenants out there who have not sued their landlord.

Watermark photos: Watermarking your pictures is one way to deter, if not prevent, picture theft. There are a number of watermark software programs and some free online versions. Do some research to choose the appropriate one for you.

The rental business can be very lucrative and will likely continue to be a prime target of criminals. Taking the necessary precautions can prevent you from becoming the next victim.

 by Brian Davis

Since 1946 the Carnahan name has had a reputation for honest and ethical Real Estate Property Management services in the San Fernando Valley, Santa Clarita Valley, Burbank/Glendale, Los Angeles, Westside and Conejo Valley areas.

The reason for our success is helping owners like you when they need it. Below is a partial list of property management services we provide to help you protect your real estate investment.

Call or e-mail us today for more information. We’re ready to get started!

  • Carnahan Property Management services Woodland Hills,West Hills, Calabasas, Canoga Park, Tarzana, Reseda, Topanga, Encino, Northridge, Van Nuys,North Hills,Chatsworth, Sherman Oaks, Studio City, North Hollywood, West Hollywood, San Fernando Valley, Granada Hills, Mission Hills, Simi Valley, West Lake Village, Agoura,Toluca Lake, Valley Village, Burbank. Call us at (818) 884-1500 and check if we can service your area.

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