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LATEST RENTAL SCAM BLAZING THROUGH THE SOUTHLAND – BEWARE!

By
Real Estate Broker/Owner with Move Up Properties CA BRE Lic 01193694

Many of you already are aware of the various rental scams going on throughout the southland and other blighted areas of the country were foreclosure has left vast amounts of vacant homes ready to be pounced on by predators posing as landlords.

With as many vacant homes as homeless families out there it would only be a matter of time before this latest method of fraud would rear its ugly head.   Let me explain.

A criminal can obtain lists of foreclosed homes in any area from just about any Realtor, foreclosure service or public records.  The criminal tracks these properties to confirm that they are vacant or better yet, they have been vacant for some time.  The ideal candidate is the vacant home that has a "combo" lockbox on the front door since it nearly certain that the combination can be obtained through MLS records, calling the representative from a for sale sign or knowing the common combo codes that have never been customized by the individual who installed it.

Now the criminal has "possession" of a vacant home through the use of a readily available key they removed from a lockbox in order to make copies for himself and his future tenant.  The criminal is ready to begin advertising the home in free publications and online classified resources such as Craig's List.  These rental listings are detailed with interior pictures they have copied from MLS listing resources and a phone number to call for more information.

The prospective tenant who is very eager to strike up an agreement with just about any landlord who will show sympathy and understanding regarding their recent hardship, foreclosure or short sale that has placed their family on the street with little alternatives due to their unsavory credit status.   These former homeowners are willing to provide sums of cash up front to nearly anyone who will look past their poor financial position in light of a property they can once again call "home".   First month, last month and a security deposit could total upwards of $7,500 to $10,000 easily handed over in return for a new beginning  towards the rest of their lives.

The knowing criminal uses this desperation to his full advantage by forming what look to be authentic lease contracts, possession dates that begin immediately, keys and "lots of luck!" as they are off with the tenant's money never to be heard from again.

The tenant has not committed a crime.  They proceed to move into their new "home" without a thought of the true identity of who they signed a contract with.  How or why would they research these individuals to be sure that they are the true owners of the property?  The criminals showed them a paid utility bill with their name on it as proof of what an average gas bill amounts to.  Never mind that the home is completely vacant or that they were told to "look into the windows" if the criminal could not be there to show it to them personally.  They were out of state completing their own move.

Never mind that there was a for sale sign rather than a for rent sign in the front yard or that the criminal was the sole contact and not the company shown on the sign.  The criminal explains that they had been trying to sell the home until they lost all faith in their Realtor and decided to lease it out themselves instead.  That sign will be coming down any day now.

And most of all, don't give a second thought to the fact that the tenant never met the criminal in person.  They spoke on the phone, have a fully executed lease agreement left at the home for them under the mat with a set of keys.  The tenant's money was wired to a bank account located in or near the state the criminal stated they reside now or left by Western Union to be picked up inside of just about any Wal-Mart across the country.

Sounds too simple?  It is.  And this is a true story running rampant across the southland.  Now what about the tenant's rights?  Don't they have a signed lease agreement and possession?  Yes, it is a fraudulent contract but the tenant didn't contribute to the scheme.  How do you pursue eviction?  The true owner is long gone and doesn't care to revisit any more stress related to the home.  The bank is yet to foreclose due to their backlog of trustee sales on the calendar.  Whose responsibility is it to remove these tenants?  Who has the power to evict a tenant holding an executed lease?

Interesting situation to say the least.  An entire neighborhood is currently dealing with this same scenario down in Corona, CA.  They have been joining together to figure out a way to evict a fraudulent tenant who lives nearby with absolutely NO certain method of how to proceed. 

Posted by

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

 

(909) 815-4499 Direct Cell

CA DRE Broker Lic #01193694

 

 

Comments (41)

Vickie Nagy
Coldwell Banker Residential Real Estate - Palm Springs, CA
Vickie Jean the Palm Springs Condo Queen

It's just another testimony as to why buyers should never buy without buyer representation!

Sep 25, 2010 05:07 AM
Mark Montross
Catamount Realty Group - Burlington, VT
Listing and Buyer Specialist

I've had this come up several times here in Vermont where we have a house for sale for $400k and people call on a Craigs List ad posting it for $800.

Sep 25, 2010 05:08 AM
Bill Travis
Captain Bill Realty, LLC - Gilbert, AZ
Broker/Owner

Unfortunately, some renters are just not educated on how to look for a rental, and fall prey to these scammers.

Sep 25, 2010 05:09 AM
Peggy Noel
RE/MAX Commonwealth - Chesterfield, VA
Bouchard, ABR, CDPE, SFR

Diane - I had a fried in a Fair Housing organization mention this to me about a year ago - he said it was going on and I was dumbfounded - it's a pretty slick con.

Sep 25, 2010 05:58 AM
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

The criminals are so clever, aren't they? When everyone else is asleep, they always thing of little scams to steal money from poor innocent victims. WHy can't they use their minds for good?

Sep 25, 2010 06:24 AM
Chuck Carstensen
RE/MAX Results - Elk River, MN
Minnesota/Wisconsin Real Estate Expert

I am amazed the low levels that people go to and get away with things like these.

Sep 25, 2010 07:14 AM
Gary L. Waters Broker Associate, Bucci Realty
Bucci Realty, Inc. - Melbourne, FL
Eighteen Years Experience in Brevard County

Trust no one should be the mantra for tenants these days! Background check the owners!

Sep 25, 2010 08:05 AM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

SIMPLE SOLUTION:  Tenants should contact a LOCAL REALTOR and inquire if the home is a LEGITIMATE rental/lease.  Information on the owner of record, and if the home is on the market as a foreclosure can be determined.

Sep 25, 2010 08:40 AM
John Novak
Keller Williams Realty The Marketplace - Las Vegas, NV
Henderson, Las Vegas and Summerlin Real Estate

We've had this happen in Las Vegas as well. With so many vacant, distressed properties on the market, this is a message that bears repeating.

Sep 25, 2010 10:28 AM
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Anything that looks too good to be true, probably is.

Sep 25, 2010 10:53 AM
Susan Templeton
Bellingham, WA

The owner of record is a matter of public information on the city or county assessor's site. A prospective buyer or renter can look it up online and see who is on title...and if a Bank is listed as the owner of record or other trustee that is your tip off. Folks can call the local assessor and ask them to look it up and explain it. The same courthouse will have a list of active foreclosures in process and will share that information. The other thing I've also seen fake business cards with license numbers and logos of prominent agenies on them. Easy enough to lift off a website these days. Most people don't bother the check the state licensing bureau to find out if a person is legit. So sad. What have we come to as a culture?

Sep 25, 2010 12:39 PM
Chris Olsen
Olsen Ziegler Realty - Cleveland, OH
Broker Owner Cleveland Ohio Real Estate

Hi Diane -- Consumers need to become much more savvy about potential scams and your post adds to the knowledgeable. 

I do wonder if simply using a Supra/GE iBox would solve this issue?  They aren't widely used in our local area as agents are too cheap to pay for $190 per year for the service, plus the boxes themselves.

Sep 25, 2010 01:25 PM
Tish Lloyd
BlueCoast Realty Corporation - Wilmington, NC
Broker - Wilmington NC and Surrounding Beaches

This is an excellent, but very sad post!  Tough times for so many and it's unconscionable to see people who are trying to crawl back up that glass mountain be taken advantage of in such a deeply personal way -- a roof over one's head.  That's pretty low!

Sep 25, 2010 01:28 PM
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

I see all of these comments saying that a "licensed REALTOR" or agent would see right through this...  But, would they?  The tax data online is likely to be 30-60 days out of date... in some areas, maybe more.  Now, as an agent, I would certainly contact the broker as well as research the property on the MLS...  but, if the property title isn't shown in the online tax record as the bank's, yet... it is a more difficult proposition. 

The bottom line is that anyone renting a property needs to do their due diligence... and that means knowing whom you are dealing with, and knowing some history on the property...

Sep 25, 2010 01:49 PM
Diane Wheatley
Move Up Properties - Rancho Cucamonga, CA
Broker, SoCal Real Estate Expert (909) 815-4499

I appreciate all of your insight.  It appears from a majority of the comments is that there are many variations of this scam occurring with the end result remaining the same - a wayward tenant who has become caught in the headlights.

If hindsight were 20/20, I believe that there are many should of, would of and could of's, yet didn't's here.  This particular Corona case occurred virtually overnight right before the neighborhood's eyes.  The listing agent discouraged her short sale clients from abandoning the property for various reasons.  But apparently they could not bear losing their home and all the drama that goes along with waiting on the bank's short sale approval.  The sellers abandoned the home without a goodbye or forwarding notice to the neighbors or to the listing agent.

I am a short sale listing agent and it is disappointing when a buyer walks, much less a seller!  Ouch.  We are experienced professionals but I'll admit that my motivation to clean up after my seller's lack of consideration would be disgustingly low.  Would you run back over there time and time again to check on the home, maintain its security and maintenance for a client that is nowhere to be found?  No, not likely.  But you would terminate the listing, remove your lockbox and sign.  In Corona, this just didn't happen soon enough.

I do believe that a Supra lockbox could deter the criminals but the real determined ones would still find a way.  And checking title records and verifying ownership sounds simple to us but to many folks out there it isn't. 

What I can offer as a possible solution to this type of scam is to be cognizant of situations such as these.  Tenants PLEASE contact a Realtor to represent you when leasing a property.  Proper representation is an invaluable service that will prove itself all day long when dealing with strangers who could hurt you and your family in such a personal way.  This is exactly why we are here.  We make it our responsibility to look out for your best interests every step of the way.  Working around us does not save you any money it only opens you up to a world of grief that could be altogether avoided.

As Realtors and real estate professionals, we must continue to educate the community of these kinds of malicious crimes in hopes of warning them before they there is potential for damage.  Sites such as Active Rain are magnificent soapbox platforms to get the word out.  Please don't be afraid to step up on your soapbox whenever you find it necessary to make us aware.

Sep 25, 2010 07:49 PM
Maureen Fukumoto
Help-U-Sell Realty Pro - Mililani, HI
Maureen

I check Craigslist frequently as I have often found my listings being advertised for rent by some "medical missionary in africa: or a "diplomat on a peacekeeping mission".  I have had clients accosted in their own driveways by desperate people who supposedly spoke to the owner.  It's a little freaky for the true owner/tenant to have someone walking around their property looking in the windows and especially frightening for the children. 

Sep 25, 2010 10:39 PM
Stella Barbour
NoVa Brokers LLC - Vienna, VA
Principal Broker, Serving Virginia and Maryland

This happens everywhere.  It is sad how we have to deal with scammers with all the other distress around us.

Sep 27, 2010 01:38 AM
Rayna Mckay
RE/MAX Real Estate Advocates - Calgary, AB

Diane, Very interesting article. It's amazing the scams that go on these days. I would like to think that the public would trust in the Real Estate professional to at least call the sign and see if all the facts check out.

Sep 27, 2010 08:08 AM
Veronica Huerta
SCA Real Estate - Ocean Beach, CA

Diane,

Wow, this is the first time i have heard of this! What a horrible situation, thanks for sharing your knowledge

Oct 01, 2010 08:36 AM
Diane Wheatley
Move Up Properties - Rancho Cucamonga, CA
Broker, SoCal Real Estate Expert (909) 815-4499

I wish I could say that it is a pleasure to report this information to you all but that would hardly be the truth.  This type of awareness is necessary to help stop thieves from continuing to prey upon the weak or uninformed.  Maybe if we can spread the word to those less informed we can strip another coat from the ugly underbelly of fraud and deceipt that continues to filter into a business we all work so hard to keep at the highest level of integrity and professional standard it deserves.

If any of us have personal knowledge of these types of crimes, it is our duty to report it.  Thank you !!

Oct 09, 2010 09:57 AM