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The Fraud Rental Game
By Marv Steier, President of TVS Tenant Verification Service Inc.
Owning or managing a rental property can be a full time job and a full time headache if your landlord business does not have a fraud prevention program, particularly if you get a tenant that has previously played the fraud rental game and has intent to defraud or deprive you of rental fees even before the Tenancy Agreement has been signed.
A Tenancy Agreement means absolutely nothing to Delinquent Tenants; it is a contract that is meant to be broken.
These individuals use landlords as a revolving line of credit and more often than not cause thousands of dollars worth of damage to the rental property.
So let's analyze what causes them to do this?
- No consequence for their actions, they can't be charged criminally unless you can prove intent, which is a rare circumstance.
- No job, no assets and no forwarding address is the norm for many of these tenants, it is difficult to locate them and useless in most instances to initiate any kind of civil action against them. They have nothing that you can take away from them which means that they don't have to care what they do to your rental property.
- Many landlords, Property Managers and Resident Managers are not well versed in the fraud rental game and thus there is little or no fraud prevention.
- Landlords do not network to identify these Individuals thus allowing the revolving line of credit to continue.
Delinquent Tenants have at their disposal, counterfeit or phony I.D., friends that pretend to be former landlords to give them a favorable tenant reference and Internet companies that supply phony resumes and employment records. This is how the fraud rental game is played and if you haven't been subjected to this in the past, there is a good chance that you will be in the future.
Many Landlords, Property Managers and Resident Managers allow the Prospective Tenant to complete the Application to rent form on their own, they never check I.D. and often do not require the Application to be completed in its entirety, and the biggest faux pas of all? They don't do any tenant screening or conduct any due diligence with respect to the information provided on the Application to Rent. How do you really know that your Prospective Tenant is not playing the fraud rental game? Would you hand over the keys to your car in the same manner that you hand the keys over to your rental property? How well do you know that person?
We've all heard stories about the tenant from hell; here is what you can do to prevent that from happening.
Tips that will help You win the Fraud Rental Game
Once you have a format with respect to your tenant screening process it won't take long. Consider the alternative, the stress, hassles and income loss associated to delinquent tenants.
- Don't believe anything that you are told and/or what is on the Application to Rent.
- Make sure that the Application has been completed in its entirety that does not mean 90%, if a Prospective Tenant only completes part of it, he/she may be hiding something. If the Prospective Tenant has an attitude when asked to complete the form, this may be an indication of hidden problems that you may not want to deal with.
- Obtain the Prospective Tenant's credit history, a credit history will verify the information that was given to you on the application to rent form, you will be able to compare the information and determine if your Prospective Tenant was truthful or not. A credit history will give you information with respect to pay patterns, and will be a good indicator of how you can expect to be paid. This is a valuable Resource that provides a lot of information. Individuals with good credit histories are likely to be good tenants. This is a rule of thumb; there is the odd exception.
- Check with two previous landlords. When the alleged landlord answers the phone ask if he/she has any available suites for rent? If it is a friend that you are calling you will catch them of guard and they will tell you that you have a wrong number.
- Be devious when conducting your interview to ensure that you are not talking to a friend, i.e so John Doe tells me that he rented a two bedroom suite, is that true? John Doe tells me that he resided there for two years can you confirm that? He tells me that he didn't get along with one of the neighbors; can you tell me about that? If you can get this alleged Landlord to agree with what you are saying you probably are not dealing with a Landlord, but rather a friend because what you have just stated has been completely made up. The real Landlord will not agree with you and will tell you what was actually rented and how long the tenancy was for. Friends that think they are helping out will tell you what they think you want to hear.
- Some Landlords just want to get rid of their problem tenants and will therefore give good references, you may also have to be deceitful with them i.e. did you have any problems with this Tenant? He tells me that he didn't like some of the neighbors and had a couple of disagreements, what was the problem? This may get the landlord to tell you that there was a problem and reveal things about your Prospective Tenant. Remember this is a game and how well you play will determine what kind of tenant you get.
- Check with current and previous employer, what is the monthly income, is it enough to pay his/her bills and rent? Do not rely on documents, as noted earlier anyone can create these on a computer, verify information with the Human Resources Department of the Employer or the Bookkeeper/Accountant. Is the Company listed in the phone book or directory assistance, if not why not? Ask the Accountant or Employer what the address of the Company is that includes the zip/postal code; you can check what the zip/postal code should be via
USPS ZIP Code Lookup,
or Reverse Phone Directory . What is the Prospective Tenant's job description? The employer should be able to answer these questions without hesitation. You can also use these links to check out the information that was provided on the rental application form.
- Ask for previous hydro bill, telephone bill, cell phone bill, the name and address on there should match the information on the application form. If not, why not?
- What kind of car does the Prospective Tenant drive? Is it a beater? Is it extremely dirty or not taken care of, this may be indicative of the way he/she will look after your rental property.
- Many Landlords and almost all Property and Resident Managers have the Prospective Tenant complete the Application to Rent form and if the application is accepted, then Tenancy Agreement should also be completed, this is an absolute essential for the landlord so that there can be no misunderstanding with respect to the terms of the rental and what is or is not expected of Landlord and Tenant.
- Review, review, review the current Residential Tenancy Act or Fair Credit Reporting Act (click on links & resources at www.tenantverification.com for access to the acts) Landlords should know the applicable Act from beginning to end; it will help you to be a better Landlord, Property or Resident Manager.
- We were all born with common sense and gut instinct; this can also be a valuable tool when deciding whether or not you want to rent to a Prospective Tenant.
- Visit www.criminalfraud.com and click on landlord fraud for further fraud prevention methods.
This article was written by Marv Steier, President of TVS Tenant Verification Service Inc.
Visit www.tenantverification.com for more information on how to network with other landlords or call Marv toll free at 1-877-974-9328.
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