Stay Safe, Rent Smart: Implement these Tips Today to Protect Yourself from Rental Scams
Finding the right rental home is supposed to be exciting but in today’s busy housing market, it can be overwhelming and full of risks. The rise of online platforms and digital transactions has made finding the perfect place more convenient than ever. However, along with this convenience comes the risk of rental scams, which can leave unsuspecting tenants financially devastated and emotionally distraught. Manjunath Chandramma, a newcomer from India, experienced such a scam upon moving to Canada.
Manjunath arrived in Toronto in November 2022, looking for a place to stay. He found a listing in Hamilton for a master bedroom in a house, offered at $1,000 per month. As a newcomer, he was eager to settle in and paid $1,500 upfront to the Brampton-based couple who owned the property. However, upon arrival, he discovered the house had no electricity. The landlord promised it would be fixed soon, but as evening came, Manjunath was left in the cold darkness.
The situation escalated when the landlord, instead of addressing the issue, berated Manjunath for his inquiries and ultimately demanded that he vacate the premises or endure the night without electricity. Unable to stay in the dark and cold, he agreed to vacate the house. The owner came and took the house keys back from him. When asked about his $1,500, the owner said he had exhausted his daily transaction limit and will transfer the amount the next day.
With no other option, Manjunath had to vacate the house, leaving behind his deposit. Despite numerous attempts to retrieve his full deposit, Manjunath lost $1,000 in that one day. The landlord's responses ranged from excuses to outright hostility, leaving Manjunath feeling cheated and vulnerable in a new country in a foreign land. The promised reimbursement of $1,500 dwindled to $500, with the landlord citing baseless reasons and resorting to emotional manipulation.
Manjunath's ordeal serves as a cautionary tale, highlighting the importance of vigilance and awareness when navigating the rental landscape in Canada. Unfortunately, rental scams are not uncommon, and unsuspecting tenants can easily fall victim to unscrupulous practices that exploit their trust and vulnerability.
So, how can individuals safeguard themselves against such fraudulent schemes? Here are the few things to remember while renting a house:
Research and verify the property and owners: To safeguard oneself from scam, it is crucial to verify the authenticity of listings and owners. Before committing to any rental agreement, search for the property and owner names online to see if any discrepancies in the information you were given or any issues pop up. Also, you can ask to see the property tax bill to confirm ownership and request the name and contact information of previous tenants to secure references. Any genuine landlord should feel comfortable sharing this information.
“One prevalent scam is the phantom rental scheme, where fraudsters advertise properties that either don't exist or are not available for rent. They often lure unsuspecting victims with enticingly low prices or attractive amenities. To avoid falling victim to such scams, it is crucial to conduct thorough research,” says Chris McGuire, founder of Real Estate Exam Ninja.
The scamsters also use “bait-and-switch” tactic where they advertise a desirable property at an attractive price, only to switch it with a less appealing one once you are interested, shares Samantha Od, Real Estate Sales Representative and Montreal Division Manager at Precondo. “Always be cautious if a landlord seems too eager to rush you into signing without proper documentation. Take your time to review the terms and conditions, ensuring they align with what was initially presented,” she says.
Conduct a physical inspection: Another important point to keep in mind before renting a property is inspecting it in person to assess its condition and ensure that it meets your expectations and requirements. “Always insist on physically visiting the property before making any payments or signing a lease agreement. Be wary of landlords who are reluctant to meet in person or demand cash-only transactions,” says Mcguire who is also a licensed broker.
Always meet the landlord or agent in person at the rental property, or at least view it through a video tour if you are renting from abroad, before making any payments or providing personal information. There is greater risk if you are renting from abroad. Under these circumstances, you want to ensure to research both the owner and the address and to get and check references for the landlord. When connecting with the references, conduct a simple internet search on them in advance and consider asking questions that will enable you to ensure they lived at the property.
Avoid Rental Deposit Fraud: Rental deposit fraud is very common nowadays where scammers request upfront payments or deposits without showing the property or providing proper documentation. To safeguard against this, remember that a good landlord will want you to see the property and like it so that you live there for a meaningful period of time. Any pressure tactics from landlords are concerning. It is essential to exercise caution when dealing with landlords who ask for immediate payments or ask for wire transfers or prepaid gift cards. Always conduct your due diligence first, ensure ownership of the property, sign a written lease agreement before any deposits, use secure payment methods such as bank transfers or certified cheques and request receipts for any financial transactions.
Ensure you have proper documentation: Request written agreements that outline all terms and conditions, including rent, utilities, and deposit requirements. Ontario has a standard lease that landlords can use. You can review it here to ensure that the lease you are signing has all the important information. It is important to note that no deposits are required prior to signing a lease. Review contracts carefully and seek legal advice if necessary to clarify any ambiguities or concerns.
Protect your identity: Although there is plenty of personal information required on applications, there is no need to put your identity at risk. It has been seen in many cases that scammers steal personal information and use it for various fraudulent activities. Landlords will want information that includes your name, address, employer, income, previous place of residence, contact information of your previuos landlord as well as personal references and credit history. There is absolutely no need and no requirement to provide more personal information like your SIN number, drivers license number or any credit card numbers. If they have an application requesting that information, you can leave it blank and outline that as a general practice you avoid sharing that information because of the inherent risks and you are happy to work with them to ensure they feel comfortable and have all the information they need to make a decision. Landlords do not need your SIN number for anything.
As prospective Landlords will want to understand your credit history, you can work on a safe way to provide this. Most banks will provide you with access to your credit score and report and if your bank does not provide this, you can use a service like creditkarma. You can print out your credit report, black out the personal information and share a copy with your application.
In conclusion, while the rental market offers numerous opportunities for individuals seeking housing, it is essential to feel comfortable taking the steps required to avoid rental scams. By following these proactive steps and exercising due diligence, tenants can protect themselves and make informed decisions when navigating the rental landscape.
