It is bold. It is outrageous. It is unbelievable. Back in May of 2011, I wrote about the rise in scams against landlords. Those scams seem not to have abated in the time since then. Based on the phonecalls our office receives, these scams are still occurring in Chicago and the surrounding suburbs. The scams target owners with vacant property.
The scam works like this. The scammer finds a vacant property, breaks in, changes the locks, and then rents the unit. Vacant properties are easy to find. The scammers keep their eyes open and also check lists of property in foreclosure and even listings of vacant properties for rent. Once the target property is found, it is simple enough to break in and change the locks.
From that point, the scam can take two different paths. In one iteration, the scammer lists (usually on Craigslist or elsewhere on the internet) and rents the vacant real estate. Sometimes the scammer claims to be the property owner and sometimes they claim to be acting as a real estate agent on behalf of the property owner. In this scenario, the scammer collects a security deposit and first and last month’s rent and disappears. In a variation on the scam, the scammer is the actual occupant or the scammer finds a willing accomplice in the eventual occupant. A phony lease is created and the scammer or the accomplice can live rent free for a time. In some cases, these scammers claim to have pre-paid a many months rent in advance or claim to have also purchased appliances.
Sometimes, the real property owner comes around and discovers that the real estate they thought was vacant is now occupied. The property owner can go to the police, however, when the occupant is able to produce a lease, the police are likely to bow out because there is no evidence of trespass. To the police, they just see a property owner and a tenant having a dispute and the property owner asking the police to evict a tenant – something the police don’t do! (The County Sheriff is responsible for evictions and only pursuant to court order). Most police, absent convincing them that the lease is a fake and a fraud, will view the situation as a civil matter.
There are stories of scammers getting caught and charged with a crime. A Georgia newspaper recently reported that a scammer was charged with felony theft in a similar scam. The trouble is that, even if a property owner can convince the police of a scam and get them interested in investigating, it is usually difficult to find the scammer or prove that the scam took place. Near the end of last year, Freddie Mac warned about the rise of foreclosure rental scams across the country.
So once a real estate owner is in the scammer’s web and the police have declined to help, what can they do? There are not a lot of good options. The most expedient option is known as “cash for keys”. The owner can “buy” the “tenants” out of the property. For most property owners, especially those already in foreclosure, this is not an enticing option. However, the alternative is to try to evict the “tenants”. As readers of this blog are well aware, an eviction is a costly and time consuming procedure – possibly (much) more than “cash for keys”.
What can a property owner do to avoid these scams? Not much, but owners can reduce the possibility of a scam by regularly checking in on the rental property or having neighbors on the lookout for unusual people hanging around the property. However, it seems that recently, even neighbors are getting into the act.