Tenants be aware of rental deposit scams
The original article was published on Property24 on 26 August 2014. The original article can be accessed here.
Rental deposit scams are on the increase. This is according to Adrian Goslett, CEO of RE/MAX of Southern Africa, who warns that rental scam incidences are becoming more common.
He says, unfortunately, there is a criminal element that is taking advantage of prospective tenants who are involved in the rental-hunting process. He says tenants are often emotionally driven when it comes to looking for their ideal rental home, which could make them vulnerable to the advances of possible fraudulent activity.
Enthusiastic about the prospect of finding a new home, eager tenants might be more trusting and susceptible to rental scams, says Goslett. “There is also the factor of time. Tenants who have a limited time frame in which to find a home due to relocation for work or possible personal issues, could be more desperate to find a place to stay and not be as cautious in their approach.”
How do rental scams work?
Goslett says essentially what happens is a scammer will try and get money from a potential tenant for a rental property that they are not in a legal position to offer for rental. The rental property could either be real or fictitious, with the scammer possibly being a landlord or merely impersonating the landlord or rental agent. Once the unsuspecting tenant has transferred the agreed rental and deposit, the scammer disappears.
According to Goslett, vigilant tenants can lower their chances of becoming rental scam victims by keeping the following in mind:
He says as a general rule, keep your guard up and never assume that because the property was found on a reputable online search portal that you can’t fall victim to scammers who are posing as landlords or rental agents, who manage to get their listings on the site.
He says if at any stage of the process you feel there is something wrong, the whole thing is rushed with unwarranted sales pressure or seems too good to be true, walk away.
Goslett notes that tenants should contact the numbers given by the landlord or rental agent to ensure that the office exists and is part of the brand they say they are representing. A reputable agency will be able to provide the tenant with all the information they require with regard to the rental agent and property listings.
Beware of the following red flags:
Never transfer or send money without having met the landlord or rental agent and having seen the rental property. “It is generally never a good idea to pay money for something that you have not seen or inspected. There is cause for concern if the landlord expects you to make the payment based purely on website photos and before the property has been looked at.
Landlords and rental agents will normally want to vet a potential tenant and complete a credit check before the rental is confirmed, so beware of landlords who are too eager to sign the lease agreement without the appropriate procedures.
Be wary of landlords or rental agents who request excessive deposit amounts or too many months' payment upfront or are never able to meet and show you the property in person.
Don’t trust a landlord who says that no lease agreement is required. Firstly, Goslett says it is never in the tenant’s best interest, as the lease offers them protection and secondly, a landlord who doesn’t want to enter into a lease agreement may not have one to offer in the first place. While an attorney is not required when entering into a lease agreement, it’s generally a good idea to have legal representation review the agreement before it is signed.
“While there is no guarantee against rental fraud, prospective tenants will be far less vulnerable in the market if they are vigilant and aware of the warning signs. It is vital that tenants deal with rental agents from a reputable agency that they know and trust.”