I’ve heard of many kinds of scams over the years, but more recently I’ve seen a scam involving skimming money from unsuspecting tenants who are applying to lease residential real estate from an out- of-town landlord. Here’s the story.
Imagine that you, Joe, and your wife, Mary, are moving into the area from Alaska to be Federal employees. You need a place to live and you start perusing a variety of online resources, including Rent.com, Airbnb, Craig’s List, etc.
You see a listing for a property that sounds appealing – it’s four bedrooms and two full baths – an ideal size for your family, and it’s in an area that you’ve deemed attractive with good schools. Furthermore, the rent appears to be less than comparable properties. You wonder whether this is due to poor condition, but then you see the pictures and you think, wow, this property looks great and seems reasonable.
You reach out to the landlord, who has provided only an email address, which appears to be local, but in fact is owned by someone who lives in a foreign country and has set up a dummy ad to attract unsuspecting tenants so he can steal their money.
You contact whom you think is Jim Smith and he says, “Well, we’ve had a lot of interest in this rental. If you’d like to secure it, send $500 to me now and I’ll hold the property and we’ll sign an agreement.”
These days, signing an agreement can be done by email using Docusign. This allows Jim Smith, or whomever this person really is, to create and present a fake lease for that property for you to sign. Of course, you believe you’ve struck a good deal and release $500 to Jim Smith through Venmo, a bank transfer, or a cashier’s check to a PO box somewhere. You think you’ve landed your next rental place for you and your family as you move into the Washington, DC area from Alaska.
Have you ever been a part of a real estate scam? Let us know in the comments below!
As you continue communication with Jim, he might say, “Okay, I’m going to need the first month’s rent now, and a month’s security deposit.” If you haven’t caught wind yet, you may actually send him all of that money in advance to provide complete security that this rental is yours.
Now you show up at the property in DC and knock on the door, thinking that Jim or Jim’s representative will be there to provide the keys. Instead, a stranger opens the door and says, “May I help you?” Something’s off. You say, “I’m Joe and this is my wife Mary. We’re here to pick up the keys and move in.” Perplexed, the stranger says, “No, I’ve been the tenant here for three years and I’m not planning to move out.” Horror strikes you. You realize something is terribly wrong and you’re not quite sure what it is.
As you try to pursue Jim Smith again, he’s no longer responsive. In fact, he had nothing to do with that property. He simply took information off the internet about a property that he falsely represented as a rental and collected deposits and rent from trusting victims for properties he doesn’t own. He’s a criminal.
You’ve just arrived in DC and now have to move into a hotel for the night while you figure out a new plan for where your family will live. That’s a difficult position for anybody to be in; don’t let this be you.
I recently had a home for sale. The property was “active” and we were entertaining offers, when I got a call from a potential tenant asking me about renting it. “This property’s not for rent” I told him. He said, “Well it’s listed as ‘for rent’ on Craig’s List, and I’m always suspicious when I see ads there about rental property. This one was listed at a discount rate.”
I filled him in on the apparent scam, we sold the property to another party, and all ended up okay, as far as I can tell. But I don’t really know if there are other people who weren’t as fortunate as that man. There are plenty of people like Joe and Mary who unsuspectingly lose money in real estate scams.
Be careful when you seek out a rental. Be especially careful when you put your money up for deposit; make sure you know where it’s going and to whom, and that everything has been well vetted.
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