Rancho Cucamonga, CA Real Estate Broker: LATEST RENTAL SCAM BLAZING THROUGH THE SOUTHLAND – BEWARE!

LATEST RENTAL SCAM BLAZING THROUGH THE SOUTHLAND – BEWARE!

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. 

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

 

(909) 815-4499 Direct Cell

CA DRE Broker Lic #01193694

 

 

Comment balloon 41 commentsDiane Wheatley • September 25 2010 05:31AM

Comments

Whoever owns the deed to the home should be the only one available to evict the tenant. If it is for sale and on lock box, that means that someone owns the home and has authority to sell.  If that person doesn't with to evict, I would imagine it will be up to the bank when the foreclosure is finalized.

It just amazes me what people will do to get a quick buck. Poor tenant!

Posted by Dawn Crawley, Find Pinehurst Homes (Dawn Crawley Realty) over 8 years ago

This happened to another agent in our company, but was caught before a tenant moved in. Overseas person copied/pasted pictures from our MLS and put in Craigs List. We were alerted when one tenant could not get a quick reply from the ad. In that ad, the email address was one letter off from our company domain.

Posted by Ellen Dittman, #1 Stop for NE FLA-JAX/OP 904.535.1199 (TEXT OK) r (Watson Realty Corp.) over 8 years ago

I heard about this before. . .there are many variations and it is up to us to informed our clients. .

Posted by Fernando Herboso - Broker for Maxus Realty Group, 301-246-0001 Serving Maryland, DC and Northern VA (Maxus Realty Group - Broker 301-246-0001) over 8 years ago

Diane...

There are always those that will try to take advantage of a bad situation, and they don't care about other people and what happens to them. Thanks for the heads-up/

Posted by Richard Weisser, Richard Weisser Retired Real Estate Professional (Richard Weisser Realty) over 8 years ago

Diane, some people will stoop pretty low. Thanks for the heads up.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA over 8 years ago

And what's missing from the equation that too many people dismiss as unneeded?

You guessed it, a licensed real estate agent who would have sniffed out the scam in 5 minutes.

People represent themselves to their own detriment.  

Posted by J. Philip Faranda, Broker-Owner (J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY) over 8 years ago

Diane....I had a transient out of the blue just move into a vacant home I was managing. When I confronted him, he produced a written rental agreement with the former owner...which I knew was a fraud. I called the police and they came out. At first glance, that agreement looked solid and this guy had a smile like a Cheshire cat....The police were about to tell me that it was a civil matter.....when I took the officer on the side, explained to him who I knew at the city and who I was (player in developing the neighborhood) etc.....He made a phone call...came back and told me to wait at the curb. Told this guy if he wasn't out in 2 hours, he was going jail. The guy's charade broke down right there and then....he thanked me and the cops and got out. This could have gone the other way easily...Very nasty subject no matter how it gets started...good post and thank you Diane

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) over 8 years ago

Definitely a pretty easy scam as far as you described it, here in Manhattan that would be very difficult to implement but it depends on the number of parties involved.

Posted by Eileen Hsu, LICENSED REAL ESTATE SALESPERSON (Douglas Elliman Real Estate) over 8 years ago

Awesome story... Craigslist is full of scammers. Sadly enough, innocent people get caught up in someone's lack on conscience and they end up falling victim to the economy and it's downfall again.

Posted by Dean Watkins (Douglas Reatly - Associate Broker, CDPE, HRC, ePro) over 8 years ago

Diane,

Thanks for the trip to the dark side. Its amazing to me how much effort criminals put into creating these methods. If they just spent half as much time working on something legal they would be a huge success.

-Brent

Posted by Brent & Deb Wells, Prosper TX (LivingWell Properties) over 8 years ago

Where there are people there is going to be things like this going on.  It's just too easy to fool people these days.  Everyone wants a good deal.  That's why we keep getting our email boxes filled with opportunities to help poor Prince Faisel move 100 million or so out of a third world country for a handsome cut of the pie or to help Miss Petunia invest the billion that her late father Dr. Prince. Sheik Freddy left her in a cave in Zambia.  People are all about the easy money..... and of course there is no such thing.  Watch out! Oh.... Hey I just saw a Leprachuan.... gotta go catch him!

Posted by Ralph Janisch ABR CRS Broker, Selling Northwest Houston to good people like you! (Janisch & Co.) over 8 years ago

Jim, tht is a great idea...the google property alert.  A great and informative post Diane!   You definitely deserve the feature.

Posted by Alan Bruzee (Long & Foster Real Estate, Inc.) over 8 years ago

It is amazing how many opportunities people come up with the part other people from their money.   Thanks for letting us know!

Posted by Yvette Chisholm, Associate Broker - Rockville, MD 301-758-9500 (Long & Foster Real Estate, Inc.) over 8 years ago

One more thing to keep a look out for.

Posted by Derek Wood over 8 years ago

Morning Diane,  This is a fairly common scheme in some areas and there are plenty of targets and desparate renters .

Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) over 8 years ago

How do these people get the lockbox information, in Colorado you must prove you are an active agent to abtain this information and accompany any buyers to the properties, never giving lockbox info to anyone.

Posted by John Marshall - FORE!, Specializing in Golf Course Properties (LoKation Real Estate) over 8 years ago

Feel very sad for the poor souls who now have no money or way to get it back due to someone else's scam.  It's a really bleak situation.  I really really wish people would pay attention to things around them and people like this more often.  A couple of good questions would probably have scared off the individual.

Posted by Manuel Monserrate over 8 years ago

Google Alert on the address of your listing is an outstanding idea. Thanks for that!

Posted by Brian Bean, Homeowner Advocate, Dream Big Team, S.Calif (The Dream Big Team at Better Homes and Gardens Real Estate Champions) over 8 years ago

I'm actually in the process of selling a property as a short sale where the tenants who just moved out thought they had purchased the home on an owner financing deal. They gave the theif $10,000 as a down payment. The true owner didn't even realize someone was living in their property until about 6 months after it happened.

Folks really need to do their due diligence. Check public records and ask for identification.

Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) over 8 years ago

I met a potential client last year, and he had signed a contract to lease with option to purchase giving $15,000 as down payment to the landlord and making payments of $1500 per month.  After a year and a half, a real estate agent showed up at his door and broke the news to him that the property was foreclosed and he had to move out.  Absolutely devastating!  He had no idea.  He was just mailing his monthly check to the post office box as instructed.

Hiring professional assistance is a big step for a client to take and alleviate 99% of the risk in any lease transaction.

Good post!

Posted by Jordon Wheeler, J W Group Real Estate Sales and Service (The Jordon Wheeler Group) over 8 years ago

Just another reason to use Realtors. 

Posted by Bruce Swedal, Denver Real Estate over 8 years ago

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

Posted by Vickie Nagy, Vickie Jean the Palm Springs Condo Queen (Coldwell Banker Residential Real Estate) over 8 years ago

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.

Posted by Mark Montross, Listing and Buyer Specialist (Catamount Realty Group) over 8 years ago

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

Posted by Bill Travis, Broker/Owner (Captain Bill Realty, LLC) over 8 years ago

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.

Posted by Peggy Noel, Bouchard, ABR, CDPE, SFR (RE/MAX Commonwealth) over 8 years ago

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?

Posted by Melissa Zavala, Broker, Escondido Real Estate, San Diego County (Broadpoint Properties) over 8 years ago

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

Posted by Chuck Carstensen, Minnesota Real Estate Expert (RE/MAX Results) over 8 years ago

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

Posted by Gary L. Waters Broker Associate, Bucci Realty, Fifteen Years Experience in Brevard County (Bucci Realty, Inc.) over 8 years ago

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.

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) over 8 years ago

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.

Posted by John Novak, Henderson, Las Vegas and Summerlin Real Estate (Keller Williams Realty The Marketplace) over 8 years ago

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

Posted by Eric Michael, Metro Detroit Real Estate Professional 734.564.1519 (Remerica Integrity, Realtors®, Northville, MI) over 8 years ago

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?

Posted by Susan Templeton over 8 years ago

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.

Posted by Chris Olsen, Broker Owner Cleveland Ohio Real Estate (Olsen Ziegler Realty) over 8 years ago

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!

Posted by Tish Lloyd, Broker - Wilmington NC and Surrounding Beaches (BlueCoast Realty Corporation) over 8 years ago

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...

Posted by Lane Bailey, Realtor & Car Guy (Century 21 Results Realty) over 8 years ago

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.

Posted by Diane Wheatley, Broker, SoCal Real Estate Expert (909) 815-4499 (Move Up Properties) over 8 years ago

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. 

Posted by Maureen Fukumoto, Maureen (Help-U-Sell Realty Pro) over 8 years ago

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

Posted by Stella Barbour, Principal Broker, Serving Virginia and Maryland (NoVa Brokers LLC) over 8 years ago

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.

Posted by Rayna Mckay (RE/MAX Real Estate Advocates) over 8 years ago

Diane,

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

Posted by Veronica Huerta (SCA Real Estate) over 8 years ago

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 !!

Posted by Diane Wheatley, Broker, SoCal Real Estate Expert (909) 815-4499 (Move Up Properties) over 8 years ago

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