9 Steps to Avoid Getting Caught by a Property Rental Scam

The Junk Mail team has always been dedicated to informing our users about the scams that are out there.

Recently, we received some helpful tips to avoid getting caught by a property rental scam. This information was provided by Mr Johan van Niekerk from Pretoria. He has been using our services to advertise his rental properties for a long time. This concerned Junk Mail user has taken the time to outline the way that property rental scams work and has included tips to avoid being caught by one.

Photo credit: Anna Tarazevich on Pexels

So how does a Property Rental Scam work?

The true owner/agent involved with the rental property places an advert for the property to rent using a marketplaces service like Junk Mail. A fraudster/scammer phones the advertiser and obtains more information about the property. This scammer/fraudster then places an advert for the same property using online marketplaces, with slightly different property details. If potential tenants phone the fraudster/scammer they are put under the impression that the person they are speaking to has full access to the property they are phoning about. The potential tenant pays a deposit/rent in the fraudster/scammer’s bank account. The scammer/fraudster disappears into thin air with the tenant’s money.

There has also been cases where the existing tenant of a rental property claimed that they were the rightful owner of the property they are renting. Once they obtain rental money from a potential tenant, they also vanish into thin air. They even make up fake contracts for these fraudulent transaction. The fraudsters/scammers also make claims that they are “currently not in town”, but that the potential tenants could have a look at the property (providing they not disturb the current tenants). These criminals also ask potential tenants personal questions and they promise that, as they receive the deposit/first month’s rent, the property would be awarded to the potential tenant. In all of these cases the rightful owner of the property doesn’t have any knowledge of these fraudulent transactions taking place.

Follow these 9 steps to avoid being caught by a property rental scam:

Step 1: Obtain as much detail as possible about the rental property. Find out how long the property has been rented out. Find out why the owner doesn’t live in the property. Find out when the current tenants moved in and why they are moving out.

Step 2: Meet the rental agent/property owner at another property. This should be done after inspection of the rental property. This should NOT be done in a public place, your current rental property or in your car. It’s a legal requirement that fixed property contracts should be closed at a different location than the property you are looking to rent. Also ask the property owner for a copy of the documentation that gives him the right to administrate/rent out the property you are interested in.

Step 3: Talk to the neighbors/current tenant to obtain info about the property. Ask the neighbors who the current owner is, about the history of the property and for details. Compare the details with what the owner told you. Ask the current tenant questions about the property if there is one. Just keep in mind that there have been cases where the current tenant is in cahoots with the fraudster.

Step 4: Insist on seeing the property charges account and find out who the property is registered to. Is the charges account paid up to date? If the charges account is paid up to date it protects the tenant. If it’s not paid up to date the municipality could cut off the electricity to the rental property.

Step 5: Ask for a copy of the rental contract and ask your lawyer to verify its legality for you.

Step 6: Note the owner/rental agent’s reaction to Step 4. Ask as many questions as possible. Confirm when the property was bought, when the decision was made to rent out the property, etc

Step 7: Take photos of the property and of the people that are involved during the inspection of the property. Take down the registration number of the person’s vehicle and details of the person you are dealing with. Take a witness with you and inform them about things they should be on the lookout for.

Step 8: Look at the receipt/contract you receive from the owner/rental agent. Make sure the person/agency you are dealing with details is complete on it. Take down details of the witness to the contract. Obtain and test their cell phone number, etc. Prevent that the owner/rental agency forces your witness to sign the contract as a witness.

Step 9: Get the full name and surname and ID number of the rental agent/owner and verify it with your local authority and transport acts office.

If you feel uncomfortable while going through any of these steps, take a step back and investigate further. The fraudsters/scammers speak your language fluently and do not hesitate to take advantage of this. Keep the amount you pay to rent the property in mind when you refrain from asking questions. Do not sign the contract to the property without having a witness present.

Also Note:

• Do not rent a property which rent amount takes up for more than 25% of your monthly income, unless you are going to conduct trade on the property
• Look at the road that you need to travel daily to generate income and to drop the kids off at school. Do not rent the property if it takes more than 40 minutes to run each of these errands.
• Check the security of the rental property, it should be a high priority on your checklist.
• Don’t put your trust in empty promises. All contracts say that property’s should be let out as stated on the day of signing.
• Read the contract and ask questions if you are unsure about stipulations made in it.

The Junk Mail team would like to take this opportunity to thank Mr van Niekerk for taking the time to point out these steps. Remember: if something sounds to good to be true, it usually is. Be Smart! Be Savvy! Be Safe!