According to this article on Shelter.org, a quarter of a million people have fallen fall victim to rental fraud in the last five years.
But what’s more worrying is that they believe most instances of rental fraud go unreported to the police, so the figure is probably a lot higher.
So, let’s take a look at the most common scams and how you can avoid them!
Here’s a list of commonly known scams that tenants have fallen victim to:
1] Let and run
This by far the most common scam: when someone pretending to be a landlord or someone authorised (e.g. letting agent) shows a prospective tenant around a property.
When the prospective tenant looking at the property says they like it, the scammer asks them to pay an up-front holding deposit to reserve the property, and often the first months’ rent.
The prospective tenant pays the sum (which can be several hundred pounds or more), but the landlord/agent then drives off into the sunset with the cash, never to be seen or heard from again.
Of course, the scam quickly unravels, but it’s too late.
2] No need for a deposit
In this delightful scenario, the landlord won’t ask for a deposit, he/she will instead request the details of a Tenant Guarantor. Then, when the Tenancy Agreement comes to an end, the guarantor will be held reliable for very expensive, and generally unnecessary repairs.
3] Unprotected deposits
Since 2007, landlords have been required to protect the deposits their tenants hand over into one of the three Government approved Tenancy Deposit Schemes.
The legislation was put into place because there were often disputes between landlords and their tenants about whether the deposit should be returned.
However, according to Shelter’s findings, many landlords are still avoiding complying with their legal requirements, and then keep hold of the deposit at the end of the tenancy for no good reason.
4] Subletting scam
This another common one, when a tenant sub-lets the entire property or individual rooms in the rental property without the landlords permission.
The person that is sub-letting (i.e. the original tenant) charges more rent than what they are paying for rent, so they make a profit each month.
Some tenants illegal sublet multiple properties and make a handsome living from it. Needless to say, the properties are generally in very poor condition and they generally exploit those sub-letting.
5] The overseas Landlord
These scams typically takes place on the internet, so the scammer doesn’t need to be present and may never have been to the actually property they are marketing for let.
The so-called “landlord” will advertise properties they don’t own on UK based websites and claim they’re an overseas landlord.
They get interested tenants to transfer a holding deposit into their foreign account, and then vanish into thin air. These people are virtually impossible to track down.
Don’t hand over any money before visiting the property in person or meeting someone that is authorised to let the property.
I’d be wary of dealing with any overseas landlord! Most legitimate overseas landlords will use letting agents to manage their properties, or entrust the management to a close family member. Either way, they’ll be local representation!
6] Nigerian Rental Scams
These Nigerian scams are classic and have been around for years. I think almost everyone with a email account would have received spam email from a “Nigerian Ambassador” at some point.
There are so many variations of this scam, I would just avoid any deals that involve an overseas Nigerian landlord trying to rent their property, or offering you huge sums of money.
Preventing Rental Scams
Here are a few ways that may help tenants avoid falling victim of rental scams:
- Ask the landlord for photo ID e.g. Driving License, Passport
- Ask for details of previous tenants for referencing
- Ensure the landlord is meeting all legal regulations. Genuine landlords will meet all legal requirements, in particular the Gas Safety Certificate and Tenancy Deposit Scheme
- Avoid paying any upfront fees without viewing the property and meeting the landlord at the actual property
Go to my Tenants Guide To Finding A Good Landlord for a more detailed safety precautions.
Have you been a victim? Do you have any other suggestions?
I’m just curious if anyone reading this has fallen victim to a rental scam? If so, what happened? Also, is anyone aware of any other rental scams commonly used to trap tenants? And finally, does anyone have any further tips on how to avoid rental scams?
Disclaimer: I'm just a landlord blogger; I'm 100% not qualified to give legal or financial advice. I'm a doofus. Any information I share is my unqualified opinion, and should never be construed as professional legal or financial advice. You should definitely get advice from a qualified professional for any legal or financial matters. For more information, please read my full disclaimer.