Tips to Avoid Rental Scams

by Mirania 27, November 2012 16:25

Rental Scams have become a common phenomenon these days with several tenants falling victims to apartment rental scams or a fake landlord scams every other day. Recently, I came across a news report at Myfoxphilly.com that speaks of an unscrupulous landlord who has duped several prospective tenants by luring them to sign false rental agreement for the same property. The prospective tenants have claimed paying thousands of dollars to the landlord as security deposits that he did not pay back for a house.

In order to avoid rental scams, tenants should be careful and follow certain measures to avoid such scams.  The number of rental scams is multiplying by leaps and bounds in real estate market. This article would focus on few guidelines that a tenant should follow in order to avoid getting scammed by dishonest landlords.

1) Read your documents: Never pay a security deposit before signing the rental agreement. If you have rented before, you can hopefully recognize some of the features of your standard lease (name of landlord, payment terms, late fee, rules,etc), and you should inspect your documentation to see if it looks legitimate.

2) Check out the Property in person:  Checking out the rental property if you can; because you may never get back your money, if it is a scam.  If you can drive by the property, then you can see if there is a rental sign in front of the property and this number matches the online advertisement contact numbers. Also, make sure that you check with the people in the neighborhood to confirm who owns the property.

3) Check if property ownership information matches online:  Ensure that the property you are renting is a legitimate rental property. The increasing number of foreclosures has encouraged the scammers to rent out properties that do not belong to them. Thus, before renting a house, spare some time to do an online investigation on the landlord and see if the name of the owner matches the party that you are contacting.  Additionally, usually property records will indicate potential mailing addresses , then you can use that to identify irregularities, if any.  The online records may indicate a ownership by the bank, so it may help identify that the landlord no longer owns the home.

4) If it sounds too good to be true,then it probably is:  It is not an easy task to identify a rental scam.  Often times, we as consumers or tenants get attracted to the astounding offers, attractive prices, and great deals that we open ourselves up to being fooled by the scammers.  One way to check is google the address and check the local real estate association sites and see if the property is listed on other sites for different prices, listed as a short sale, pre-foreclosure sale, or other contact information may differ. It maybe that the scammers are find their potential target properties by scanning other real estate listing and co-opting them for their purposes. In the case of this landlord in Philly, you may find out that the bank has listed the property for sale or short sale, and the owner or former owner did not have the right to lease it out again.

These are few important tips for tenants so that they can avoid being scammed by landlords. Therefore, as future tenants you should always be vigilant to avoid scammers and keep these guidelines in mind next time you look out for a rental property. It also helps to work with licensed real estate brokerages and property managers as they are governed and monitored by state regulatory agencies, so it does provide some  level of comfort that you are working with legitimate parties.

 

Philadelphia News, Weather and Sports from WTXF FOX 29

Philly Tenant scammed by landlord

by Mirania 7, November 2012 15:47

Rental Scams have become a common phenomenon these days with several tenants falling victims to apartment rental scams or a fake landlord scams every other day. Recently, I came across a news report at myfoxphilly.com that speaks of an unscrupulous landlord who has duped several prospective tenants by luring them to sign false rental agreement for the same property. The prospective tenants have claimed paying thousands of dollars to the landlord as security deposits that he did not pay back for a house. (Click here for the full story)

In order to avoid rental scams, tenants should be careful and follow certain measures to avoid such scams.  The number of rental scams is multiplying by leaps and bounds in real estate market. This article would focus on few guidelines that a tenant should follow in order to avoid getting scammed by dishonest landlords.

1) Read your documents: Never pay a security deposit before signing the rental agreement. If you have rented before, you can hopefully recognize some of the features of your standard lease (name of landlord, payment terms, late fee, rules,etc), and you should inspect your documentation to see if it looks legitimate.

2) Check out the property in person:  Checking out the rental property if you can; because you may never get back your money if you are duped.  If you drive by the property, then you can see if there is a rental sign in front of the property. You can see if number matches the online advertisement contact numbers.  Please note that licensed real estate agents can also cooperatively show the property for other brokerages, so if the numbers do not match; you may need to investigate who the person marketing is and what there relationship is. It is okay to use a agent to help you see homes and it is a common practice, but you just need to make sure that you understand that relationship early in the propcess. Also, another advantage of checking out a rental property in person is you maybe able to check with the people in the neighborhood to confirm who owns the property or situation.

3) Check if property ownership information matches online:  Ensure that the property you are renting is a legitimate rental property. The increasing number of foreclosures has encouraged the scammers to rent out properties that do not belong to them. Thus, before renting a house, spare a moment to do investigate if the landlord who is talking to you is the name of the owner in the county records. 

You can use this kind of research to identify irregularities, if any.  The online records may indicate a ownership by the bank is the owners, and this may mean that the landlord no longer owns the home. 

4) If it sounds too good to be true,then it probably is:  It is not an easy task to identify a rental scam.  Often times, we as consumers or tenants get attracted to the astounding offers, attractive prices, and great deals that we open ourselves up to being fooled by the scammers.  One way to check is google the address to see if the listing comes up under as being listed by any agents or brokerages.  You can check the local real estate agents or real estate brokerage site or real estate association sites to verify information about the agent or listing. 

Things you maybe able to determine by doing some research:

  • Is the property is listed on other sites for different prices?   Scammers love to list property for well below market price to entice people to work with them.
  • Is the property listed as a short sale, pre-foreclosure sale?  Scammer love to look for property where people may have vacated home and use that to help perpetrate their scams.  In the case of this landlord in Philly, you may find out that the bank has listed the property for sale or short sale, and the owner or former owner did not have the right to lease it out again.
  • Does the contact information differ? Sometimes scammers will look up information to make it seem like it maybe the owner directly marketing it. They will create fake email addresses that are similar but not exact.  It maybe that the scammers are find their potential target properties by scanning other real estate listing and co-opting them for their purposes.

These are few important tips for tenants so that they can avoid being scammed. Therefore, as future tenants you should always be vigilant to avoid scammers and keep these guidelines in mind next time you look out for a rental property. It also helps to work with licensed real estate brokerages and property managers as they are governed and monitored by state regulatory agencies, so it does provide some  level of comfort that you are working with legitimate parties.

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Seven: The sin of gluttony brings flashbacks to how tenants sometimes take care of their property

by jay.raman@ashokalion.com 4, October 2012 13:16

When I watched the movie "Seven", there were many graphic and difficult scenes to watch.  Seven was a thrilling movie starring Gwyneth Paltrow, Morgan Freeman, Brad Pitt, and Kevin Spacey.  In the movie, a unnamed killer (who in the end is simply identified as John Doe) arranges several gruesome murders to replicate the seven deadly sins.  If you watched the movie, you probably cringed at how graphic and disgusting some of the scenes were. However, over the years as a property management company in the Houston and Dallas markets, we have found homes that would have seemed to be scenes straight out of the movie. I never understood why tenants would request a home be immaculate, but then upon a inspection, we discover that they take very little care of a home after they are given the keys.  Ashoka Lion will share one tenant story (name will not be revealed) to illustrate the kinds of flashbacks to Seven that we get as a property management company on a periodic basis.

My tenant story involved a lady who on paper seemed to be a solid prospect. Solid work history, no eviction or broken leases on record, made pretty good money , and did not register any red flags criminally. However, after this tenant moved in, we had a plumbing request. She had garbage disposal problem. We sent repair guys to the home, and they were thoroughly disgusted. In the home, they found dishes were piled high with uneaten foods left around the room and trash everywhere. The repair guys are instructed to inform our property managers of these kinds of issues, so we can schedule follow up inspections or send warning letters to tenant.  The guys continued to resolve the issue, and in the garbage disposal; the repair guys found pork bones and silverware in the garbage disposal. We obviously warned the tenant regarding this matter, but like a horror movie, this was just the begining. She later complained that the toilets were blocked up, so our property managers had to send repair guys out again. She had called our property managers to tell us that the toilet was blocked at 1 pm on a weekend, and we got a guy there around 6 pm. To our horror, her toilet was blocked up, but instead of leaving it alone; her family decided to continue using the toilet and caused it to over flow (no further details needed).

Truthfully, dealing with a tenant like this will make property management firms and their landlords think of the sin of wrath (not discussing further to avoid revealing too much about the movie).

 

 

Can you Evict a Tenant to Help Sell Your Rental Property?

by jay.raman@ashokalion.com 6, August 2012 00:34

As a real estate investment property management firm, we often come across landlords in Dallas and Houston area who are curious to know if a landlord has the right to evict a tenant or remove a tenant who is under a lease agreement before selling his rental unit. A landlord no doubt has the right to sell his rental unit but he should abide by some regulations set by the law and legal precedent in order to avoid unnecessary issues.

According to the housing laws in the state of Texas, a landlord cannot evict a tenant to simply assist with selling his rental unit. Tenants with active rental agreements can be evicted only for a genuine cause. The factors mentioned below will explain why a landlord cannot evict a tenant while selling his house and how you can convince your tenants to evict your property without causing any disputes.

  1. You cannot evict your tenants till the end of the tenancy agreement. A rental agreement is signed by you and your tenant for a specific period; thus as a landlord or a person inheriting a tenant at a investment property you do not have the right to evict your tenant before the end of the term mentioned in the lease just because you want to sell your rental property.  Even if you end up selling your rental property, the buyer must allow the tenant to stay in the property till the end of the lease.
  2. Renters who are staying in the rental unit on month to month  contract can be asked to leave if given appropriate notice (usually 30 days) and if they do not agree to leave in a timely manner, then they can be evicted for failure to leave.
  3. As a landlord, if it becomes essential for you remove your tenant to assist the sale effort; then the best option would be to discuss, negotiate, and sign a release from the lease agreement with your tenant requesting him to leave the house within a specific period of time for some compensation or agreed upon term. You may wish to consult appropriate legal counsel to draft a release or agreement in such a manner to avoid confusion or disputes from a poorly worded agreement.
  4. As a landlord, you have the right to sell your rental unit, but  your tenants should be informed well in advance to avoid disputes and insure that showings of the property can occur with minimal push back. Selling a property with tenants becomes a hassle-free endeavor only if the landlord does not violate the rules and regulations set by the housing laws and reduce the impact on the tenant's right to quiet enjoyment of the property.

 

Tips to Dealing with Difficult Tenants

by jay.raman@ashokalion.com 25, July 2012 22:56

'A tenant slashes his landlord across the stomach when the latter got into an argument with his tenant while collecting the rent’.

You may have come across such threatening stories about violent situations occuring between tenants and their landlord. Not all tenants behave this way, but obviously, landlords sometimes face aggressive situations or difficult situation with their residents. 

As Investment Property Managers, we often come across landlords in Houston and Dallas facing the problem of evicting difficult tenants. Our eviction team has handled several eviction hearings and has assisted several distressed owners in Houston and Dallas to carry out the eviction process smoothly. The following tips would help you to deal with or avoid hostile tenants:

It goes without saying that proper background checks (criminal, eviction, and credit) and reference checks are highly essential before renting out your property to a new tenant. You should be assured that you are leasing your unit to a responsible and qualified person who will not be a threat to you or his neighbors. It is imperative to conduct proper screening of your prospective tenants before leasing your property to prevent all future calamities.  Often times,  prospective landlords will feel our criteria as their property management company are too difficult and strict, but our goal is to reduce risk that a tenant who may not be a quality individual obtains the keys.  Many owners do not realize that a eviction is a prolonged process that can cause a lot of heart ache and anger, and therefore preventitive measures in screening are preferable to having to deal with evicting a tenant.

Once a tenant has moved in, the steps to follow include:

Inform the tenant:
The first step is to inform your tenant that he/ she is violating the terms and conditions mentioned in the lease. Ideally, they should be informed over the phone and this conversation should be followed by a letter along with the copy of the lease. Don’t forget to highlight the violation in the rental agreement.

Settlement with a tenant: Foreclosures through out America have forced many banks work to remove occupants of a property through settlement (Cash for Keys) programs. This is done to avoid the scenario escalating with prolonged legal issues and reducing property damage. If you believe that the tenant will move out with minimal issue, then you may want to negotiate a relet fee or way to obtain your property with minimal.

Notice For Eviction Process:
If a phone call does not work as a reminder, then you may have to initiate the eviction procedures. For example, if your tenant has not bothered about paying the rent, then provide them a notice to vacate giving him/her appropriate notice to pay the rent or vacate the house (these terms are governed by your lease and state law) by certified mail.

Let the law handle the eviction:  If you feel unsafe during the proceeding, then let the legal process play out and stay away from your property during the eviction process.  Often times, you can file a  “Writ of Possession” after the eviction period,  if you are unsure that the tenant has vacated the premises, and a Sherriff can accompany you to the property to gain access. Do not try to circumvent the process by illegally locking the tenant out, cutting of utilities,etc, as it is both illegal and will only escalate the hostility.

Know your legal obligations: The best way to deal with violent tenants is to know the law of the land and to be aware of the terms mentioned in the lease. While making a rental agreement ensure that it specifies the time when the tenant should pay the rent, additional late fees and activities that are not allowed in the unit.  You should know if working with a tenant for a minimal payment may negate the eviction proceeding.

The following video cites a horrifying incident about a violent tenant who bit off one of the fingers of his landlord after an argument.  Being a landlord does not always have to end in violence or negative situations, but it is something to understand that it can be difficult.

http://www.youtube.com/watch?v=lI-WiotRN5o

Importance of Screening Tenants

by Mirania 31, May 2012 19:52

Proper screening of your tenants is the most important factor for renting out your house as it helps eliminate tenant problems significantly. As a landlord, you should always ensure that you are renting out your property to an eligible and responsible tenant.

We often come across various landlords in Dallas and Houston who have been facing tenant problems because of their ignorance about the tenant screening process. As investment property managers, we always advise our clients to do proper screening of the prospective tenants before leasing the property to them. Screening tenants is important as it saves you from imminent troubles by reducing the threat of possible loss of income from nonpaying tenants and tenants who may not care for yoru property. Moreover, it also protects you from all legal hassles. as the eviction process in Houston and Dallas for example can take up to a month and have additional court fees.  

If you are starting out in property investment and planning to rent out your property, we hope that these tips would help you conduct careful screening of your tenants to eliminate all potential tenant related risks.

  1. Rental Application: The first step is to make your potential tenant fill out a rental application so that you have complete information about the tenant for verification. Rental applications help you to make the right decision for renting out your property. Once you get the rental application from the potential tenant, you should review it properly and trace out if there is any inconsistency in the application.

  2. Ask for Identification:  The prospective tenant should also provide you with valid identification details such as a copy of a Social Security card or drivers license. These details should be provided along with the rental application. Please, remember that when you take these documents that you have obligations to safeguard these documents as a property manager or a landlord. You should have proper storage and document retention policies in place.

  3. Do background checks: The next important step is to conduct a background check. As a landlord or property management company, you should take all possible measures to perform a background check of your tenants. This helps you to ascertain that you are renting out your property to a qualified tenant. While doing a background check keep the following factors in your mind:
    • Call the present landlord to know about the potential tenants.  You can find out if tenants have a habit of paying late, have a balance, or take care of the property
    • Do a proper analysis of their employment details. Make sure you figure out if their take home pay is enough to cover rent and other obligations.
    • You should also ensure that the prospective tenant does not have any criminal history that will put the property or community at risk.
    • You should verify with employers to make sure that the tenants are presently employed.

  4. Check the credit history of the prospective tenant: Credit checks of potential tenants are equally essential to safeguard your interests as a landlord.  Credit reports can help you determine if the prospective tenants will pay on time.  Please note that tenants in today’s economic situations do have issues, so you may have to do a further analysis including putting more weight on rental history. 
  5. Get an eviction check done:  This is another important stage of tenant screening process. Past records of an eviction indicate that the tenant has the habit of skipping rent-payment. It also indicates that he or she might not leave your rental property if you experience any issue related to rent payment and other relevant issues.

  6. Utilize a strong rental agreement: It is imperative for you to create a rental agreement that should lucidly explain the terms and conditions of renting out a property along with the code of conduct. The rental agreement should be properly read to understand the duties as well as the responsibilities of the tenant as well as the landlord. The lease agreement should be duly signed by both parties  (or a duly appointed property management representative). If you used license realtors or licensed property management firms, then they should have access to well drafted and legally binding leases that are consistent with the landlord and tenant laws of your state. Your prospective tenants should know exactly what is expected of them. If they balk at a well drafted lease or terms, then this could be warning signs that you could have issues in the future.

These tips will help you ward off difficult tenants, and help to ensure that landlords and property management companies get the best tenant for a rental property.

The Facts of Life- Houston Section 8 is swamped with applicants

by jay.raman@ashokalion.com 2, May 2011 15:53

Today, I read a article about the Galveston County Housing Authority being swamped with applicants, and it made me realize how difficult the position is for the Houston Housing Authority as well. In the past 6 months, the Houston Housing authority has accepted thousands of applicants off their wait list. This make sense that the Housing Authority would try to help tenants find housing assistance, especially in light of this economy; as it is their mission.  With such a good, noble mission; you can forget how difficult it can be for rental property owners and real estate investors who work with the program.   The Houston Housing Authority now has delays that go beyond its 60 to 90 day "normal" processing period for landlords to be paid their check from Section 8 ("Section 8" is a catch all term for the county and city rental assistance program for low income individuals). Therefore with all the good that the program is doing, there are a lot of bad things that the owners are dealing with.

For example, two of our Houston owners who accepted Housing tenants for their vacant properties in November and December of 2010 have only received contracts in April of 2011 after having passed the inspection in December and January of 2011 for the two properties that I am referring to. This means that after marketing the property for tenants in the Houston area and accepting a tenant that the there was a delay of 3 to 4 months to even be approved for payment with payment coming in May 2011. What makes this delay of payment worse is that in one of the owner's cases that the effective date of the rental contracts was that it was made as of April, 2011. This means that the owner lost two to three months of rent keeping the property vacant while the Housing Authority dealt with their internal processing issues. 

These kinds of delays must be dealt with for Houston area rental owners to want to take on the additional burdens placed on them by accepting housing authority standards.  These burdens include:

  • Lengthy Paperwork: The Houston Housing Authority request copies of deeds, w-9, management agreeements, prefilled out leases signed by tenant, voucher, and housing authority packets.
  • Requirements for Tenant Appliances to be at the property: If you rent the property without a refridgerator, it must still be there for the inspection.
  • Inspectors inspection criteria not being uniform: Different inspectors in the Housing Authority program will pick out minute issues to "fail" a property requring a 2 week delay for reinspecting a property.
  • Delays in intial payment: Traditionally, the Housing authority process can take up to 60 to 90 days to process and get payment out. However with this influx of new applicants (some tenants have told our property management firm that there are as many as 6000 new voucher issued in past 6 months).

Also, real estate agents are not educated on this process, so it makes the process longer for them to deal with leasing these properties that have accepted the Section 8 Rental Housing Assistance Program tenants. For example, our property management firm will not pay any real estate agent's commission till the owner is paid by the Housing Authority.  This policy is in place to insure that the final amount is agreed upon, and the effective date is appropriate. Additionally, the Housing authority warns agents, landlords, and property management firms that tenants could potentially be reviewed for eligibility during this submission of their rental packet to the Housing authority for review.  If the prospective tenant is found to be inelligible then the rental owner will be forced to find another prospective tenant.

These delays and risk towards getting payment is why our firm created this policy of waiting till the payment is made by the Housing Authority prior to releasing any commission payment for real estate agents. However, many real estate agents are not used to these kinds of delays and this can cause confusion and resentment. This is why we hope agents read our "Agent Remarks" that our listing agents put which explains that the receipt of a check by the owner is a prerequisite for a Section 8 tenant to be considered approved and for commission to be paid out. 

We hope that real estate agents and property owners understand the risk of dealing with the Section 8 Housing Assistance program. However, there are some benefits to the program:

  • Consistent rental payments
  • Tenants could potentially stay longer as they have to come out of pocket for deposits
  • Housing Authority does provide periodic review of a applicants background

As the TV show the "Facts of Life" would sing in their intro song,

"You Take the Good, but you Take the bad. You Take Them Both, and There You Have the Facts of Life."