Rental Scams UK: 4 Tips To Avoid One As A Landlord
Scam-proof your rentals: Tips for UK landlords to avoid falling victim to rental scams
Rental scams have become more common in recent years in the UK. These scams can make your life hard both emotionally and financially.
Moreover, with all the different types of rental fraud and elaborate schemes, you run the risk of falling victim to a rental scam involving a great property.
So, question: As a landlord, are you equipped to handle a rental scam involving your rental property?
Pat yourself on the back if the answer is yes.
The rest of you please keep on reading. We will discuss the different types of rental fraud and schemes, guide you on how to recognise them and offer advice on how to avoid them in the first place.
Types of rental scams and how to spot them
- Non-payment of rent
One of the most common rental frauds landlords may encounter is non-payment of rent, where a tenant fails to fulfil their promise to pay.
To trick the landlord, some tenants may present fake bank statements or proof of income. Some would stop paying rent and provide excuses for doing so, in order to buy time
To prevent rental fraud, landlords should conduct a thorough screening of potential tenants. This process should involve checking references from previous landlords, verifying income and employment, and reviewing credit records.
In addition, having a legally binding lease agreement is crucial. This agreement should outline the consequences of non-payment, including late fees and eviction.
If a tenant fails to pay rent, it’s important to take swift action. This can include issuing a notice to pay rent or vacate, filing for eviction, or seeking legal advice from a lawyer.
- Fake identity scams
Identity theft fraud occurs when a tenant rents a property by providing a fake identity. They may give fake personal information, such as their name, address, or place of employment, and use stolen or fabricated documents to support their false identity.
As a landlord, it’s crucial to be vigilant and verify a tenant’s identity. You can ask them for government-issued documents like a driver’s licence or passport to confirm their identity, which you have to do in any case to verify their Right to Rent.
If you suspect that you’ve been a victim of identity theft fraud, seek legal advice immediately. Terminating the lease agreement may also be necessary, but it’s best to consult with a lawyer to understand your options.
- Subletting fraud
It’s when a renter sublets their rental property without the landlord’s permission, sometimes charging the subtenant more than they’re paying. This can negatively impact your property investment, as someone else will be profiting from your asset.
To avoid subletting fraud, you need to include a clause in the lease agreement that says subletting is not allowed without written permission. Additionally, you should inspect the property regularly to make sure there are no unauthorised occupants. You may also need to inspect commonly used websites (Airbnb, Gumtree, SpareRoom and others such as booking.com and Expedia that recently entered this business too) to see if your property is listed there without your consent.
If you discover that your tenant has sublet your rental property without your permission, the first step should be to have a conversation with the tenant. It’s important to explain to them that subletting is not permitted without your explicit consent and to remind them of the rules outlined in the lease agreement.
If, after this conversation, the tenant continues to sublet the property without your permission or violates any other terms of the lease, then it may be necessary to take legal action.
However, it’s essential to keep in mind that subletting can be a beneficial arrangement, and you may choose to allow it with additional rules and regulations outlined in the lease agreement.
To avoid any confusion or misunderstandings, it’s best to make your stance on subletting clear upfront. You can include specific terms regarding subletting in the lease agreement to ensure that your tenants understand your policies and comply with them.
- Security deposit fraud
Tenants may try to avoid paying the security deposit or parts of it by providing false information.
To prevent this kind of fraud, you should include the amount of the security deposit in the lease agreement and state that it should be paid before moving in. Make it clear that the security deposit might be used or withheld if the tenant damages the property or removes any object belonging to the property owner.
Keep a list of any security deposit deductions and provide invoices or receipts of repairs for damages they cause. If a tenant refuses to pay the security deposit or disputes any deductions, you’ll need to show them the documentation of necessary repairs or cleaning.
To be better prepared, keep a record of the rental property’s condition. A professionally done inventory, when the tenant moves in, can save you a lot of money and hustle if any disputes arise.
4 Tips to Avoid Rental Scams as a Landlord
- Conduct thorough background checks
Before renting out your property, it’s essential to take the time to thoroughly screen potential tenants. This includes checking their ID, job situation, rental history, and credit rating.
You can either hire a tenant screening company or ask for references from previous landlords or employers.
If tenants refuse to provide personal information, it may be a sign of a possible rental scam. In such cases, it’s important to be careful and not proceed with the rental process.
It’s also crucial to comply with all privacy regulations when conducting a background check. Handling sensitive and personal data must always be carried out responsibly. For instance, in the UK, landlords must get the tenant’s approval before carrying out a credit check.
Furthermore, you can use RentProfile, which is backed by the UK government, to help you detect rental scams and vet your tenants.
Remember to treat all potential tenants equally and avoid discrimination based on factors such as race, gender or religion. This is not only the right thing to do, but it also safeguards you against legal or reputational consequences.
- Insist on written agreements
Landlords should always ask for written agreements before accepting any payments.
These agreements must include payment terms and the security deposit payment. A security deposit is usually required in addition to the lease agreement, and it can be used to cover damages or overdue rent at the end of the tenancy.
For the agreement to be legally binding, both parties must sign it. This agreement protects both the landlord and the tenant in the event of any disputes.
Landlords should also provide the “How to rent booklet” to their tenants, which outlines their rights and obligations according to UK law.
- Nothing more, nothing less.
If a potential tenant offers to pay more than the requested rent amount or asks for a discount in exchange for paying in cash, it should raise a red flag. These could be signs of a scammer. Or just a bad tenant in the making.
In general, it’s best to stick to the agreed-upon rent amount and only accept payments through secure channels.
- Search for your property online
Take a quick look at social media, ad websites, and property listings in your area to ensure your home isn’t being used for rental scams.
Scammers can create fake listings and solicit deposits from unsuspecting tenants by using images and details from real ones. This is also called a phantom rental scam.
Regularly checking your property online and reporting any fake listings can help you stay alert and avoid such incidents.
How to find a good tenant with a rent-to-buy scheme
If you’re a landlord looking to maximise your property’s potential and find a good tenant, consider offering a rent-to-buy scheme.
By offering your property through a rent-to-buy agreement, you can attract professional tenants who would like to rent now a property but have a vested interest to buy it in the future. It has been found that rent-to-buy tenants take such good care of the property that maintenance costs are driven down by as much as 50%.
Plus, by allowing them to rent with the option to buy, you’ll have a steady and good stream of income right away.
Adjoin Homes vets tenants to assure that:
- They are who they say they are.
- They have the right to rent.
- They can afford to pay the rent.
- They are on the path to being able to buy your property.
Want to learn more about how rent-to-buy agreements can benefit you as a landlord? Contact us today via email or register with us to discuss your options.
