Fraud and ID Risk

A landlord is vulnerable to many potential frauds.

Some unlawful tenants mortgage properties after fraudulently transferring the properties into their own names. A tenant is able to do so when the correspondence address for the property is the property address.

Similarly, a landlord must be cautious of criminals renting out properties for criminal purposes. For instance, criminals often turn rental properties into cannabis farms. Cannabis farming ends up ruining the property as holes are made in the walls to provide ventilation for the plants. Also, criminal activities could diminish the market value of the property. Further, properties in which criminal activities occur are fire prone. Damages inflicted by criminal activities on rental properties are not covered by many insurance policies. In this article, it will be explored how tenants commit frauds and how a landlord can protect himself/herself from such frauds.

There have been cases where tenants have falsified their identities and the documents submitted to the landlord for vetting. Such tenants have bad credit scores and use fake identities to overcome this hurdle while obtaining a house for rent. An unsuspecting landlord who deals with such a tenant is usually left with unpaid rents, bounced checks and a tarnished property. Also, as mentioned above, such fraudsters could even mortgage the properties they rent or carry out criminal activities within them. 

Apart from the use of fake identities by tenants, landlords are also at risk of identity theft by tenants. It is landlords who rent out properties they used to formerly reside in who are majorly affected by identity theft by tenants. Rogue tenants who reside in such properties exploit the laxity of landlords of not having updated the addresses provided to banks and other service providers, to impersonate the landlords.

A landlord’s best defence against potential frauds is tenant referencing. Proper tenant referencing must be done for each potential tenant so that it is verified that the tenant to whom the house is handed over on rent is a genuine person, who will take good care of the property and will pay the rent on time.

The tenant referencing process includes former landlord’s reference, credit check, bank details, proof of employment, proof of income, proof of residency, proof of identity, and right to rent check. As criminal and fraud tenants are adept at providing falsified documents for the tenant referencing process, it is always advisable for landlords to engage professional tenant referencing services to carry out the tenant referencing process.