Tenancy Fraud - What you can do about it

Tenancy Fraud is on the rise due to rising housing and rent prices - but what impact does this really have on you, your tenants and the market? We break down the top scams used and how you can protect against Tenancy Fraud.

 

What kind of scams are out there?

There are a number of tenancy fraud scams currently being used to dupe both landlords and agents, the main ones are:

• Subletting without agreement: the tenant makes money off subletting their property without permission.  This can be with one or more subletters. According to research, in 2014 there were 3.3Million people living as unofficial tenants!
• Selling the house they rent: some scammers will attempt to sell the property through illegal means, pocketing the deposit cash.  Take a look at this example here reported in the Express. 
• Key Selling: tenants sell keys to other renters for a one off large deposit
• Giving False Information: a tenant provides false information to obtain a tenancy unlawfully

There are other tenancy fraud scams as well, but these are the biggest ones to look out for.

What impact does this have on you, other tenants and the market?

First and foremost, tenancy fraud causes distrust.  Distrust leads to increased costs and leads to more difficulty obtaining properties for future tenants.  If you have ever been burglarised you will understand that the impact of the experience goes on longer than simply the return/repurchase of the goods that were stolen.  The same is true of tenancy fraud. Tenancy fraud has cost implications for the landlord in legal fees for civil proceedings against the fraudsters, potential damage by unlawful and disrespectful subletters and concerns over security with key selling.  For tenants, the rise of tenancy fraud contributes to housing shortages, increased rent charges and increased security checks which may make it more difficult for some people to obtain a rental property.  Overall, tenancy fraud, according to some research, affects taxpayers by an estimated £900 Million each year! 

 

So, what can we do about it?

• Insurance:  As a landlord, the first thing you should do is get insurance for your property.  At Rushbrook & Rathbone, we offer our Property Protect policy which provides cover for; legal expenses, damage to your property and missed rent.
• Appropriate checks:  Your potential renters should be verified before you sign contracts.  Make sure you check for IVAs, bankruptcies and previous landlord references.  Our Property Protect policy includes all of this and more, providing you with the peace of mind that the tenant is not fraudulent.

  Should you find yourself in the difficult position of the victim of tenancy fraud, R&R's team of experts are here to point you in the right direction of support.  Want to find out more about our Property Protect service?  Get in touch here to speak with a member of our team today.