Landlord Loses $12,000, Tenant Charged With Fraud

by Chris on January 2, 2018

A  tenant in Nova Scotia has been charged with fraud after failing to pay her rent while allegedly pretending to be the landlord and collecting money from another tenant, according to a news report.

Despite the woman’s long criminal history and her failure to pay rent, the eviction process has taken months to complete. Meanwhile, she may have profited by posing as the landlord and collecting money from someone else. The real landlord explains that, in light of eviction delays, this tenant has cost him more than $12,000.

According to the report, the landlord discovered the scam only after he was approached by the “new” tenant, who had become suspicious and searched property records to discover that her “landlord” was not the owner.

System Malfunction

It’s all too apparent to landlords that situations like this one are not caused solely by human error — the system is failing. First, obtaining information about habitually bad tenants is stifled to the point that tenants are emboldened to lie, and landlords cannot protect themselves from the resulting income loss. Criminal histories are not available on a national level, which allows tenants to shed their past simply by moving to another city or province. Eviction records, likewise, are concealed, even in cases where the same tenant has scammed a dozen different landlords. Tenants easily manage to live rent-free for months, or in some cases, for years.

The recidivism of professional tenants is apparent simply by reading the news. Investigative reporters have been monumentally helpful in exposing some of the most egregious cases and bringing to light the hardship landlords face as one after another is victimized by the same tenant.

In addition to the inability to collect relevant information on incoming tenants, the eviction process fails landlords. In some provinces, evictions are absurdly slow — taking five months or more — and bad tenants quickly pick up on how to game the system and remain in the property.

The perception that landlords as a whole are the ones who are unscrupulous needs to change. Landlord associations play a significant role in that evolution, and landlords would be wise to support these associations.

Prevention is Key

Given the systemic delays in evicting problem tenants, prevention is paramount. While most landlords — including those who have experienced problem tenants — conduct some form of tenant screening, one of the more common mistakes is the failure to verify the information provided by the tenant. It’s one thing to ask for a rental application; it’s another to determine if the prospective tenant is being honest. Fake employment history, omitted previous addresses, and the failure to disclose previous evictions are common scams. Verifying that information takes the power away from a bad tenant. Another common ploy is to falsify previous landlord references. One of the best ways to bust that scam is to ask for more than one landlord reference.

An important step in tenant screening is running a tenant credit check. Eventually, the problem tenant likely will be flagged through outstanding judgements for unpaid rent or restitution. A rash of unpaid bills also is a red flag, even signaling a stint in jail. Because a credit report is prepared by a third party, it’s one thing a bad tenant cannot fake — except, of course, if the tenant is assuming an alias identity, or talks the landlord out of running a tenant background check. This is why it is so crucial to meet rental applicants face-to-face and to ask for photo ID before accepting a rental application.

Using previous rent payment history, TVS has compiled a database of both high and low risk tenants. Landlords can check this database at LandlordCreditBureau.ca at the same time they order a tenant credit report. Landlords who report rent payments not only are encouraging tenants to pay on time, but also preventing other landlords from getting scammed.

Sob Stories a Red Flag

Recognizing red flags is a significant advantage when screening tenants. And a sob story is a classic red flag.

Having a heart is an admirable quality, but it’s important to distinguish when a bad tenant is playing on that compassion. Keep in mind that professional tenants target more than one landlord. Like a burglar who cases a property before deciding on the right target, there is no telling how many other landlords this applicant has interviewed to find the right mark.

Allow your better judgement to rule over your heart, especially if the sob story comes early in the process. An applicant is a stranger until properly vetted.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

{ 2 comments… read them below or add one }

Mila zhang January 5, 2018 at 9:44 pm

Does bank credit check same as TVS?LCB is same company as TVS? How I can get a help from you? I need apply be a membership ?

Marv January 9, 2018 at 1:39 pm

Mila…the banks obtain a consumer credit check from Equifax or Trans Union, as does TVS and the reports would be very similar.

To sign up (no cost membership) with TVS, go to http://www.tenantverification.ca if your in Canada and http://www.tenantverification.com if in the USA.

You can report rent payments to http://www.landlordcreditbureau.ca (canada) or http://www.landlordcreditbureau.com (USA)

lf you still have questions…call toll free 1-877-974-9328 and request assistance.

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