A few years ago, the Las Cruces Police Department reported that three local families were victims of rental fraud. In one case, a family moving to Las Cruces from California was scammed out of $1,000 while trying to rent a home listed on Craigslist. In another report, an NMSU student was defrauded of $500.00 by someone claiming to own a property.
This is not breaking news. The Attorney General’s Office and the LCPD have asked landlords and renters to be especially diligent when negotiating deals to rent or lease a home. The warnings apply to both landlords and renters, as both are susceptible to being scammed. Here are some examples of how scams are perpetrated.
In Taos, a landlord became suspicious when he received a $5,000 check from a Craigslist rental seeker who was only required to make a $1,500 deposit. The potential tenant then emailed the landlord saying his ‘sponsor’ had discovered the overpayment ‘situation’ and asked the landlord to wire the $3,500 difference to a furniture company who took care of the move for the tenant. As you may have guessed, the potential tenant’s check was forged. The owner was lucky to have discovered the scheme before sending the attacker $3,500 of his hard-earned salary.
In another case, an Albuquerque man nearly fell victim to rental fraud when he responded to a Craigslist ad for a two-bedroom, two-bathroom home in the Northeast Heights area. The notice was said to have been placed by a landlord whose ad read: ‘JUST MOVED TO WEST AFRICA, WE ARE LOOKING TO LET THIS HOUSE TO A RELIABLE AND TRUSTED TENANT.’ The potential tenant was asked to send a $1,000 deposit to the landlord. After unsuccessful attempts to locate the property in question, the wise tenant decided to end negotiations with the fictitious owner. It was the same scam used to steal the California couple’s $1,000.
Such situations constitute many of the common types of scams that have been perpetrated against landlords and renters for decades. In recent years, however, cases of landlords defrauding their own tenants have also come to the attention of authorities. In these cases, landlords defraud their tenants by agreeing to rent their homes to them knowing that their property is foreclosed and it will only be a matter of time until the tenant is evicted. The landlord pockets the rents but does not send the money to the lender.
How can landlords and renters protect themselves from rental scammers? The first step in preventing rental fraud is to look for red flags.
Does the offer sound too good to be true? If so, it probably is. Does the owner require cash payment only or payment by bank transfer? Such situations are becoming increasingly common and are among the most common rental scams. Is the candidate tenant requesting the reimbursement of an overpayment? This is one of the most popular scams out there and should be avoided at all costs. Is it impossible to meet the owner or his representative because they are abroad? If so, your money will soon go where the low life lies. Do you feel uneasy about the people involved or the situation itself? If so, run!
The next preventative step is to get as much information about the owner as possible. It would not be unusual to ask if the property is in foreclosure. Seizure deposits are displayed under the owners’ names on www.nmcourts.com. Similarly, it would not be excluded to ask the lessor for references from former tenants. Potential tenants can also verify ownership through public records. In Doña Ana County, determining ownership of a property is as easy as logging on to http://assessor.donaanacounty.org/assessor/web/ and looking up the address of the property. It is also advisable to speak with the neighbors about the history of the property.
In addition to being on the lookout for red flags, landlords and tenants should also be on the lookout for green flags.
Does the owner ID match county property records? Good! Do the tenant’s ID card and social security card match the information on the application? Good! If the owner is not present, is the owner’s representative a real estate agent or property manager doing business from a nearby physical location? Good! Does the real estate agent or manager have a written agreement to represent the ownerr? Good! Is the real estate agent licensed by the New Mexico Real Estate Commission? Good! Does the owner or manager have access to utility bills? Good! Will you be allowed to review the rental or lease agreement before handing over any money? Good! Do you feel positive about the situation? Good!
It is important to note that anyone engaged in the management of a rental property must be licensed by the New Mexico Real Estate Commission. An exception is made for a landlord who rents out his own property. Owners may also appoint another unauthorized person to represent their property, provided this is done using a valid power of attorney. Any other unauthorized activity is considered illegal and a crime under New Mexico law.
Since rental scams are perpetrated almost exclusively using vacant or non-existent properties, it is important to note how easy it is for a thief to commandeer a home. According to a July 12 Las Cruces Association of Realtors report, a total of 89, or 32%, of the 278 homes, townhouses and condominiums listed for sale that day were designated as vacant. All are prime candidates for use in a rental scam.
Whether you own or rent, ensuring you do your due diligence before entering into a real estate rental transaction can save you more than embarrassment. For renters, it can save money on rent and deposit, moving costs, utility costs, and most importantly, it can save you from identity theft. How? You will be less likely to provide an application containing your social security number, address, driver’s license number, credit card numbers, and other personal information to people who intend to use it to malicious purposes.
Landlords can save lost rent, the prospect of finding an unsuspecting, unauthorized tenant living in the property, and property damage themselves.
If you believe you have been the victim of rental fraud, contact the Las Cruces Police Department or the New Mexico Attorney General immediately. They will be happy to write up a report and help you track down the culprits.
Meet at closing time.