RENTAL SCAMS
Landlords, tenants warned about online fraudulent transactions
Landlords and tenants are falling for scams involving rental accommodation, says Mike Chopowick, manager of policy with the Federation of Rental-housing Providers of Ontario (FRPO). To avoid getting scammed, he advises always doing business in person with rental agents and establish a traceable transaction trail. “Most landlord and property management companies accept rent and deposits by cheque, which is safer than wire or email.”
The ad for a three-bedroom townhouse in Vaughan was really too good to be true. The monthly rent was $640 a month and the “landlord,” who claimed to be a pilot living in England, seemed like a nice guy, even if his grammar left a little to be desired.
The prospective renter would just have to wire the landlord a deposit and he would mail her the keys to see the unit.
Upon prompting from a friend who showed her countless stories on the Internet involving rental scams, Michelle (who didn’t want her last name used) said her instincts told her that something felt wrong and she managed to avoid getting scammed.
But others are falling for this and other scams involving rental accommodation, says Mike Chopowick, manager of policy with the Federation of Rental-housing Providers of Ontario (FRPO).
“A common tactic with these fraudsters is to post these listings with prices that are so low they tempt a lot of tenants to overcome their common sense,” says Chopowick.
“We’re seeing enough of these cases that we want to warn people. Anyone can put an ad on the Internet, so you have to take some precautions.”
Landlords and homeowners are also getting stung through online scams. In Alberta, a man browsing listings on the Internet saw his own house for rent. In some cases, previously posted real estate listing photos are captured and used to list fictitious rentals.
“That’s a common tactic by fraud- sters — to put pictures of other people’s houses online — and because vacancy rates are a little lower now, prospective tenants might be more eager than usual and won’t ask all the questions they should be asking,” he says.
Rental scams vary but there are three common scenarios.
The first is similar to the one Michelle encountered. A scammer poses as a landlord on websites such as Craigslist or Kijiji and says they are out of the country and require a deposit on the rental apartment. Once the money is paid, usually through a money transfer, the new tenant discovers there isn’t actually a rental home available and their money is lost. In another scenario, a scammer poses as a tenant and responds to Internet advertisements for rental apartments. The suspect contacts the landlord by email only. The “tenant” advises they are currently out of the province but they will send a cheque or bank draft as a deposit to secure the rental. The cheque will be more than the agreed-upon amount, and the person directs the landlord to send the excess money to a third party. After depositing the cheque, the victim will be notified by the bank that the cheque they deposited was worthless and the landlord will be responsible to the bank for the money. “Thankfully one landlord we know of caught on quickly in a situation like this,” says Chopowick. “He listed his unit for rent on the Internet for $1,200, so the rent and deposit would have been $2,400. A person pretending to be a tenant acted very eager and said they would take it and mailed him a cheque for $8,000, requesting the landlord transfer back the difference. In this case, the landlord caught on and contacted the bank — there was no name or account number listed on the phony cheque.” In another situation, a scammer somehow obtains access to a property and poses as a landlord/property manager and shows the victim the property. They then request an immediate deposit to secure the property and then inform the victim they can move in at a later date. On the move-in date, the victim arrives only to discover it wasn’t actually an available rental home and there have been other victims as well. To avoid getting scammed, the FRPO advises always doing business in person with rental agents and establish a traceable transaction trail. “Most landlord and property management companies accept rent and deposits by cheque, which is safer than wire or email and creates more of a paper trail. And you can stop a cheque if you find out there’s a problem,” advises Chopowick. Tips for renters and landlords to remember:
Check rents in the same area and know what the market rent, on average, is going to be. Often fraudsters will try to lure victims with
“Most landlord and property management companies accept rent and deposits by cheque, which is safer than wire or email and creates more of a paper trail. And you can stop a cheque if you find out there’s a problem.” MIKE CHAPOWICK FEDERATION OF RENTAL-HOUSING PROVIDERS OF ONTARIO
exceptionally low rents to capture multiple victims.
Always deal with a reputable landlord or property management company you can meet in person and talk to on the phone. Don’t just communicate through email and don’t deal with someone who demands payment in cash, wire transfer or email. According to the Ministry of Consumer Services, complaints have been filed against businesses using the email addresses homematchrentals@live.ca and ontimerentals@live.ca.
Always deal with a landlord who lives in Canada or Ontario that you can meet and talk to easily. In many cases you may want to revisit the prospective rental more than once.
Don’t use cash for first and last month’s rent, even if you think you’re being offered a better rent — it’s not traceable. Money transfers through wire services are also difficult to trace.
Consider renting in a certified rental building (crbprogram.org). Even then, make sure the person you are dealing with is an actual property manager or rental agent for the property.
Landlords should use applicant screening practices and follow up on all references. Make sure that the tenant application form has been completed in its entirety.