£82.7bn worth of rental properties occupied by fraudsters

The rental sector has long been a leading target for fraudsters, criminals and money launderers with previous research estimating that 5% of all rental stock is being let to criminals.

Ocasa, the specialist rental platform, says that equates to 279,497 properties.

Based on the current average house price, this means that £82.7 billion worth of property is occupied by people who, in the best-case scenario, aren’t paying rent.

And, in the worst cases, are using the property to facilitate criminal enterprises, such as cannabis farms.

Unwittingly enabling criminals to occupy their rental properties

For landlords, letting agents and management companies, it can be difficult to say with absolute confidence they are not unwittingly enabling criminals to occupy their rental properties, and now Ocasa has compiled some of the most common signs of rental fraud scams that everyone should be on the lookout for.

Common Rental Fraud Scams

• Defaulting on rent: One common fraudster scam is to move into a property quickly and live there rent free for as long as possible. If decisive action isn’t taken at the first possible opportunity, it can become a drawn-out waiting game while the landlord tries to secure an eviction. The average monthly rent is currently £1,177, so the losses to the landlord quickly pile up.
• Money wire transfers: Wire transfers are a common way for criminals to try to defraud landlords and property managers. A red flag is when a cheque is issued and given to the landlord for more money than has been requested. The fraudster will then ask for the excess money to be returned to them before the whole cheque bounces, by which time the tenant has made their money and probably disappeared.
• Fake financial records: Fraudster tenants will often provide fake financial information that makes them appear much wealthier and more reliable than they are in the hope that landlords and agents feel comfortable enough to slack on any other background checks and, before they know it, it’s too late and the tenant is entrenched in the property.
• Illegal sublets: Scammers will often rent homes with the sole intent of illegally subletting them to someone else for profit. In such cases, when landlords come around to chase rent arrears, they find an entirely different person living in the property instead of the one who legally owes them the unpaid rent.
• Identity fraud: Fake IDs are commonly used, as are fake credit reports and references. The tenant then occupies the property, fails to pay rent and is then untraceable when arrears are chased because the information the landlord has is completely fabricated.

How to evict a fraudster tenant

• Stay within the law: First and foremost, don’t respond to criminality with more criminality. Stay within the letter of the law throughout your attempts to evict a fraudster tenant. Failure to do so will only complicate matters and likely result in the situation lasting much longer than it needs to.
• Follow the right protocols: While it might be galling to have to follow the strict eviction protocols when your tenant themselves is a criminal, it’s important you do. This means serving them with a Section 8 notice as you would any other rogue tenant. You can then follow this up with a possession order.
• Act with speed: As soon as you suspect someone is awry, be it a suspect financial record or a missed rent payment, act immediately. Any hesitation only allows your rogue tenant to stay in the property for longer. Reach out to the proper authorities as soon as you can and report your suspicion.
• Be fastidious with records: Obsessively record everything you do towards evicting a fraudster tenant. Make a note of the date and time of every phone call or correspondence along with what was said and who said it. Keep track of all efforts you’ve made to reach out for help and make note of exactly what you think the tenant is doing wrong.

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