Wham! Bam! Yet More Property Scams

I have often written about false property investment seminars, untrustworthy intermediaries and other similar scams. This time, I turn my attention to some of the most efficient scammers of all … tenants. These are the people landlord investors are meant to be earning from, but sometimes it’s entirely the other way around.

One of the worst and most blatant examples of this is the cold, calm and collected prospective tenant, who turns up to view your vacant property. They exchange pleasantries and present themselves as a promising candidate with a good job and salary and a very plausible reason for wanting to live in the neighbourhood. They leave you with the assurance that they will think about the property, after they have seen the others on their shortlist.

Days later, they turn up at your office or your home unannounced and say they would like to view the property one more time. You trust them – and present them with the key, asking them to return it once they have finished. Later that day, your key is returned – and the viewer apologises, saying they have decided to take an alternative property.

And that’s that … or so you think.

The scammer has actually already taken a copy of the key and is about to use it to show other prospective tenants the property, acting as the owner and landlord. Within days, they have secured a tenant and taken between one and three months rent from them. Of course, by the time you discover the con and the fact that you have strangers living in your buy-to-let, the scammer is long gone.

The police in Manchester, England, were astounded when one or two cases of this particular crime expanded into 50 complaints received within a few weeks. And it didn’t stop there, because the criminals merely moved from city to city – and they (or copycat scammers) might well be in your neighbourhood right now.

Another alarming example was the tenant who quite literally sold a landlord’s property right from under his nose and then ran off with a small fortune. This was a complicated case that actually began with the tenant taking up legitimate residence in an investor’s city-centre apartment. The landlord made the fatal mistake of failing to tell the mortgage company and his bank that he was letting the property. Consequently, he didn’t arrange for his mail to be redirected.

The tenant was a skilled conman, who used the opportunity presented to him in the most unabashed way conceivable. He opened the landlord’s mail, which included bank and personal details, and progressed a carefully thought out plan of identity theft spanning over several months. Eventually, he had enough registered data to convince a mortgage company that he was actually the owner of the property, and he then remortgaged it and banked the cash. In the meantime, he also put the house up for sale, taking care not to use a local estate agent and not to have any For Sale sign erected, which would have otherwise given the game away.

The house was sold, successfully, and by the time the Land Registry had caught up with the fraudster, the seller-come-conman had vanished with thousands of pounds. Meanwhile, the actual owner was left with the nightmare scenario of having a property that, according to official records, he no longer owned. Although things were eventually sorted out, the landlord lost a fortune through legal expenses and lost revenue.

While the prior two examples may be rare and extreme, small-scale scams are commonplace … and sometimes devastating to both experienced and novice landlords.

Utility companies are not exactly renowned for their efficiency, so when tenant scammers opt to write to the electric, gas and water suppliers, stating they are in fact you (the landlord) and confirm they have moved back into the property – it can open a costly can of worms that is difficult to rectify. Because the utility companies now believe you are the person living in the dwelling, you become liable for all the electric, gas and water consumed. The bills – all red reminders – are sent to your let-property address, which means you remain bashfully unaware of the debt as it spirals upwards.

The tenant eventually moves out, giving you a false forwarding address. Diligently, you inform the utility companies … and then they ask you why you haven’t been paying the bills. Confusion abounds and by the time you realise what has happened, the tenant has gone, never to be seen again. This all-too-common example is reason enough to keep in regular contact with utility companies, just to enquire whether bills are being paid.

Acquiring bad tenants is said to be avoidable through careful referencing, but there are cases when even this is not enough to avert disaster.

Prospective tenant applicants have been known to give false names and false home addresses when applying for a tenancy, because they know their own personal data would prove unsuccessful. These scammers supply the personal data of people they usually know well, such as a relative, friend or colleague with an impeccable credit history. The false data they give proceeds through the referencing process with flying colours, which only leaves them to falsify the signature on the tenancy agreement – and then they are in your property, without you knowing that anything might be amiss.

Of course, you soon realise something is wrong, because no rent is ever paid. The arrears build-up until you decide enough is enough and start possession proceedings. Before the case arrives at court, the tenant does a moonlight flit and disappears. You are left with months of lost revenue and a court case that can’t be progressed, because all the details you have used to make the claim are false.

Remedying this situation is actually very straightforward, though very few landlords (or agents for that matter) take the precautions needed to thwart this type of scam. When an applicant presents himself for referencing, ask to see his passport or some other acceptable form of identity evidence. The photograph should of course match the person you see in front of you. Repeat this process again when you meet up to sign the tenancy agreement. If the applicant fails to supply proof of his identity on either occasion, don’t grant the tenancy. It’s that simple!