Landlords Battle Tenant Fraud

by Chris on March 18, 2013

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.

{ 6 comments… read them below or add one }

Don Tepper March 19, 2013 at 7:07 am

Good post. However, the real fraudsters can evade all that. First of all, I’ve had rental properties for 30+ years. (Usually just one, sometimes multiple.) In that time, I’ve probably had 35+ separate tenants: Families, couples, a group house for several years, etc. It has been more than 20 years since I’ve been contacted for ANY reference. Two of my recent tenants bought houses upon moving out. No contact. My most recent one used a Realtor who allegedly ran both credit and background checks, as well as checking with previous landlords (that’d be me, and I was never contacted). One of my tenants was the proverbial “tenant from Hell.” My Realtor did both a background and credit check on him, as well as with the property management firm that handled the previous rental. He came across clean as a whistle. My advice: Do the background, credit, and previous landlord checks. But do NOT assume that if all come back clean, that the prospect will work out.

Marv March 19, 2013 at 11:40 am

Thanks for commenting Don. You are correct in assuming that this type of risk cannot be eliminated, however if you follow the criteria as noted above and the advice we give with the Operating Instructions after sign up, most of the risk will be eliminated.
Many Landlords/Property Managers almost never use the credit report as an interview tool to establish identity. There is much that can be done to further the screening process and too much for me to comment on here. I will write further on this for one of the Blog’s for Chris to post. And I agree Don, this is a good article. More can be done…easily. I will write something on it. Again, thanks for your comment. Would like to see more, and if there are any questions or comments please do not hesitate to contact me at email noted above. As an aside we will be announcing a new product from Experian shortly which will eliminate the need for audits pertaining to property ownership docs which Experian requires.

Cindy March 19, 2013 at 2:40 pm

Don’t forget social media. You can get hints on the person’s real self by looking at their facebook, etc.

Jim March 19, 2013 at 4:49 pm

Don,
Your landlord experience (type and # of units, length of time being a landlord) is very similar to mine. I would strongly recommend doing the background yourself and not delegating it, even to a trusted realtor. I have rented to over three dozen tenants over the years and never had anyone call to check a reference on a former tenant. It’s scary how lazy and careless most landlords are.
I started using the TVS report on eviction history report and it has already saved me big time. One applicant we were actively considering had three unlawful detainers on his history, after meeting with the applicant and then later doing a background check I was blown away. Would never had a clue if I hadn’t done my homework.
If a potential applicant live within a one hour drive I always drive past the home they are currently renting or arrange to meet them at their home to sign the release for me to check their credit. It will give you a good idea of how they will maintain the home you are renting them based on how they care for the home they are currently living in(are they pack rats, are there inoperable vehicles, excessive outside storage, lawn mowed and watered, etc.).

JM February 8, 2014 at 9:35 pm

The problem is the Residential Tenancy Branch in my province has so many loopholes which allowed my tenant to use an alias name even though I told them it was not her legal name. All the tenant had to say was that she didn’t receive page 2 of a 2 page eviction notice even though there was a witness signature with my Landlord proof of service. The 2nd page was only an instruction page on how to dispute the notice which she obviously knew how. This cancelled the eviction until an arbitration hearing a month away. Then she delayed that arbitration hearing by lying about fake illnesses from my rental home after getting a home inspection done without my knowledge or permission for air quality and mold. This inspection was done 2 days after she received her eviction notice. Meanwhile she wrote NSF cheques for the “mold” inspection and was claiming monetary reimbursement from me for it along with the maximum monetary amount for an alleged illness from the house and emotional duress. I had proof that she did not pay for the inspection as I spoke to the owner of the company who told me he received bounced checks. She threatened to suit me for her illness , claiming she had lawyers, made 2 false police reports against me claiming I harassed her or her son when I didn’t say one word to her after giving the eviction notice. The 2nd police report was to have the police monitor her moving out to make sure I did not follow her to find out her forwarding address. I was not even home and was visiting my neighbour and saw 2 police cars arrive at my house looking for me. Incidentally, the rental house was directly across the street from my house. She ran around the neighbourhood telling people the police were after me. She slandered my name with defamation of character claiming I was a narcotic pill addict. The next arbitration hearing was adjourned as she stated she had a medical appointment and was waiting for reports which were non-existent. Then she gave a fake forwarding address to me and the Arbitrator to avoid being served my evidence which adjourned another arbitration hearing until the Arbitrator finally called her on her lies at the final arbitration hearing as I had so much evidence against her. It took 5 months to go through the process of trying to evict her and afterwards defending myself against fraudulent monetary claims. I won my arbitration hearings with a counter monetary claim as I had 80 pages of evidence showing she had done the same to numerous previous Landlords all over the province. I still had no forwarding address to serve her and at the end, one order to serve her had an alias name because the Tenancy Board would not change it so I could properly serve her. In my research on her I discovered she’s been doing this to Landlords since 2006. One Landlord feared for her life as she was threatened her with bodily harm. After my case was finally over, she did the same to 2 more Landlords and one has approached me to help with her eviction and future arbitration hearings. These fraudulent tenants know all the tricks to delay the evictions and arbitration hearings. They will make your life miserable and so stressful that you can’t sleep at night and they have no conscience whatsoever. Police won’t do anything about the numerous NSF cheques as they can’t prove fraud no matter how many NSF’s. She used alias names for all utilities from place to place to avoid paying. It took many months to find out her current address and I am finally filing a civil suit against her. I have 2 orders for her to pay…one of them has an alias name. I won’t see a dime from her but I am so angry that I only care about it being on her record. I did check references from her but a previous Landlord lied. It was my fault for not doing enough research on her at beginning of tenancy but it does not help when the Tenancy Branch let’s these fraudulent tenants get away with these numerous loopholes in the system. Some countries are making it a criminal offence and that is what needs to be done everywhere otherwise these fraudulent tenants use Landlords as revolving doors for free rent for years on end. In my city alone, there were 4 landlords she scammed for over $30,000 from Sept. 2012 to current date Feb 2013. One case is ongoing. This woman is probably the worst fraud tenant I have ever seen. She tells sob stories to scam for money from everyone and repays with NSF’s. She feels she does not have to pay for anything in life. I have been a Landlord for close to 20 years with some bad tenants but nothing like this nightmare of a tenant. It’s shameful that the Tenancy Boards let these frauds get away with it.

Rose December 17, 2017 at 9:57 pm

I have a question and a concern for anyone out there that can help me… I recently found out that one of my tenants who is (*Two months behind in rent*), is using someone else’s name!!! he showed me his photo ID but it was the same Alias name, he’s been using with his picture on it!!! (“FAKE ID”)!!! that I found out is not his real name!! what can I do??? I need help and advice!!!!

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