Landlords Battle Tenant Fraud

by | Mar 18, 2013 | Tenant Screening

Each year, thousands of people fall victim to fraud. Most victims believed it would never happen to them.

The word “fraud” conjures images of Internet scams or stolen identities. But landlords often are the targets of fraud schemes. Small landlord businesses are particularly vulnerable, because scheming tenants often view these landlords as an easy mark.

There have been a number of recent scams that have cost landlords:

A tenant who used another person’s identity when renting in order to hide a violent criminal background;

A tenant who lied about being employed after facing a half-dozen evictions for failing to pay rent;

A tenant who pretended to be wealthy, but who failed to pay rent to multiple landlords;

An Internet scammer, pretending to be a doctor, who paid in advance for a property he’d never seen, then asked for the money back. It took nearly three weeks for the landlord to discover the con artist had paid with a fraudulent check;

Tenants with ties to organized crime who used false identifies when leasing, then set up marijuana grow operations in the rentals;

A tenant who was found to have lied on his rental application, and another who doctored the supporting documentation.

Numerous tenants who have used dishonest excuses to delay eviction hearings and continue to live rent-free, many times damaging the property;

All professional tenants who habitually pay late or fail to pay rent at all.

To avoid being a victim of tenant fraud, landlords must be proactive, and exercise both vigilance and skepticism when it comes to choosing tenants. For instance:

Always verify the identify of the rental applicants under consideration. Ask for a photo ID. Make sure to verify the person’s identity before a property tour to minimize safety risks.

Demand a completed rental application from each occupant. If possible, observe the applicant as he or she completes the form. Give special scrutiny to an applicant who completed the form online.

Always run tenant screening reports — a credit check, criminal background check and eviction report — on each adult occupant before leasing, even if a person appears highly qualified. Let applicants know in advance that a tenant background check is required.

Independently verify the person’s employment and income.

Speak with previous landlords. Approach the reference with skepticism and verify this is not just a friend of the applicant. The best policy is to speak with two previous landlord references to rule out bias from a current landlord trying to offload a problem tenant.

Try to stay ahead of fraudsters. Make tenants accountable for on-time rent payments, and act quickly at the first sign of trouble to minimize income loss.

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 in 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.

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