Nationwide, landlords are facing a new, costly, and evolving challenge to their rental business. Con artists are running a number of scams targeting unwary landlords. Although the scam will vary from situation to situation, the scammers will rent out a landlord’s property by posing as the landlord or the landlord’s agent. The crooks target a property and list it for rent. Unsuspecting tenants then pay security deposits and rent to the con artist in return for keys. In some cases, the fake landlord has broken into the rental property and changed the locks and can grant a tenant possession. In others, the tenant gets keys that do not work. In still other cases, the “tenants” are not really tenants, but instead are scammers who are part of the fraud (once they’re in, they are hard to get out!).
Stories of these scams are on the rise. A recent report from Philadelphia tells of a recent scam where the con artist, acting as a real estate agent, posted fliers around town advertising a rental that the con man did not own. He rented the unit to multiple unsuspecting tenants who are now out their cash. In another recent story out of Utah, Nigerian scammers are listing rentals on the internet. In yet another story, a cheat in Maryland posing as a landlord was renting out properties he did not own to multiple tenants.
These situations also occur in Chicago. Our office recently handled a case in a downtown Chicago residential condo building for a landlord who was the victim of a similar plot. The landlord was getting ready to sell his downtown condo. When his real estate agent went to show the condo to a prospective buyer, the agent discovered two tenants in possession. The tenants, who in our case, I believe, were part of the scam, produced a written lease and receipt for deposits and rent made out by a supposed real estate agent who claimed that he represented the property owner. The renters even went so far as to claim that they purchased all of the appliances in the rental unit. Expressing shock and surprise that they had been scammed, the tenants refused to leave (they also refused to pay the rent!) and the property owner had to bring eviction proceedings. The party in possession (it’s not fair to call them tenants!) did its best to stall the case – asking for a jury trial and seeking time to find the agent who “scammed them” to bring him into the case. Eventually, we were able to get the tenants out, but the expense to our client was great. The tenants left owing a substantial amount of money for occupancy of the property, did damage to the property, and the client’s attorney’s fees and court costs were high.
What can Chicago property owners and landlords do to protect themselves from these frauds? Not all that much. The scam can probably happen to anyone and the criminals who engage in the scam are quite sophisticated. However, landlords need to have a high degree of contact with their property. It should be visited on a regular basis. Any strange activity should be dealt with quickly and property owners should not be bashful about getting law enforcement involved sooner rather than later. Many of the scammers are said to troll target properties that have been obviously vacant for long periods of time or that have been listed as part of foreclosure proceedings or are listed for sale or rent on the MLS. This is just one more new and changing hurdle for landlords.