Scams & Frauds

Because information is so easily obtained now online it is becoming easier for criminal tenants to take out a mortgage on their rented property. Often the first the landlord knows about this is when the rent fails to come in after the tenants have done a runner once they have got their hands on the money.

The debt collectors for the mortgage company will then appear some time after, and the landlord will then have all the hassle of dealing with the problem.  Which may take some time.

The reason the tenants are able to do this is that it is generally easy for them to intercept the paperwork from the Land Registry, and the landlord / owner will not be aware of what is going on if he has not provided the Land Registry with an alternative address for correspondence.

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If you are renting out a property, make sure that you provide the Land Registry with a separate a contact address for correspondence.  There is a special service for this – see the Land Registry page here.

See also the video on this page.

This is where a cheque is sent to a landlord or letting agency (although it is most often an agency) ostensibly to pay for rent in advance for a letting, and the agency is then put under pressure to cash the cheque and pay out against it before it has cleared. However the cheque is forged and does not clear. The agency is left out of pocket, as the bank will probably not re-imburse the loss.

Warning signs are:

• Cheques for amounts larger than are actually needed
• No, or few, contact details provided
• Cheques sent in envelopes with no postmark, and no proper covering letter
• Urgent’ demands for payments to be made before the cheque could have cleared
• Cheques apparently from large organisations where no invoices or purchase orders have been issued

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If it looks too good to be true, it probably is. Never pay out against cheques unless they have first cleared.

NB: For assured periodic tenancies, rent in advance is prohibited before the tenancy agreement is signed.  See our FAQ.

Under the Protection from Eviction Act 1977 it is illegal to evict someone from a property without first obtaining a court order. However many landlords are unwilling to do this if it looks as if the tenant has gone as obtaining a court order can take months.

Some unscrupulous tenants have been known to take advantage of this by making it seem as if they have left the property, to entice the landlord into changing the locks.

Once this has been done, they will then make a claim for compensation for unlawful evictions. Unless the landlord is able to show that the conduct of the tenants was sufficient to allow them to reasonably assume that they had left, the landlords will be liable. Most of these tenants will be cunning and will leave just enough possessions in the property to make it feasible that they were intending to return.

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Be very careful indeed about changing the locks and re-letting a property where the tenant appears to have gone but has left possessions in the property and has not returned the keys.

Note that in  Wales, there is now a statutory abandonment procedure for qualifying occupation contracts.  See our FAQ.

This is where a landlord or agent trying to let or sell a property is persuaded to hand over the keys to an apparently genuine customer for an unaccompanied viewing. The customer will often appear very respectable and have business cards and email addresses. However this person will in reality be a fraudster who then takes this opportunity to get a set of keys cut.

The fraudster or conman will then find a tenant for the property. However once the tenant has handed over his first month’s rent and deposit, the conman will disappear leaving the tenant and the property owner to sort things out. Both will be in difficulties.

The tenant may not be able to recover his rent or the damage deposit paid, unless the conman is located (although the bank may be able to recompense for an eligible scam payment). The landlord will have all the bother and expense of getting rid of the tenant, plus the delay in getting vacant possession may cause problems if a buyer has been found for the property.

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• Tenants: Be careful if you are renting from someone who is not an established agent or landlord with a proper established office. Make sure that the person letting the property is the genuine landlord or a proper agent. You can find out the name of the property owner via the HM Land Registry website (although note that this is not always conclusive).
• Landlords: Never allow prospective buyers or tenants to take away the keys, however respectable they appear. Always do accompanied viewings.

Misuse fraud is when a tenant uses the property for something other than its intended use set out in the tenancy agreement. This often comes in the form of a tenant renting out a property from a landlord and then subletting it either as a HMO or a holiday let, in order to receive an income.

This can bring up a whole host of issues for the landlord, such as licensing breaches that can be occured as well as breaching the superior lease if it prohibits subletting

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Consider setting up a google alert for the address of your property. This should alert you if your property is being advertised or written about. Furthermore, you could check popular subletting & holiday letting sites such as Airbnb from time to time.

It is also important that landlords carry out regular property inspections, to make sure that the correct people are in occupation and that the property is being used as it should.

Identity fraud or theft is when a person uses private details or information about a person in order to secure a loan or a payment of some description.

Landlords who are not careful can become vulnerable to this through fraudulent tenants or agents. Landlords can be more vulnerable to this type of fraud & scam if tenants living within their property get access to records & information (such as utility bills, bank payments) that is either delivered or located within the property.

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Remove all personal items before letting out your property (this is particularly important if it was previously your home). 

Make sure that you set up a mail re-direct so that mail addressed to you never gets in the hands of your tenants. Make sure that this is not allowed to lapse.

This is another reason to use the Land Registry services to protect against fraud.

A prospective tenant may give you a forged payslip or a reference that appears to come from an employer or previous landlord. The phone number or email address on the reference may belong to someone involved in the scam.

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If you are doing your own referencing, check important details independently. For example, if you need to verify employment, look up the employer’s contact details yourself and ask to speak to the person who deals with references.

If something does not add up, give the applicant a chance to explain before drawing conclusions.  However, be wary about trusting them.

Be wary of unexpected emails, texts or calls asking you to pay a landlord registration or licensing fee, especially if they threaten a fine unless you pay immediately. A message can look official and still send you to a fake payment page.

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Check the demand before paying or uploading documents.

• For England’s rental property registration service, start from the official guidance on GOV.UK.
• For a council property licence, go to the council’s own website.
• In Wales, go directly to Rent Smart Wales.

Use contact details you find yourself.

This can be devastating.  It is where a criminal hacks into an email correspondence, for example between a solicitor and client, and substitutes an email containing the fraudster’s bank account details.

It is often done during conveyancing process (where the fraudster directs a purchaser to make the payment to their bank account) or where building or other expensive words have been carried out – where a substitute invoice is sent with the fraudsters payment details.

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Always double-check over the phone any payments which need to be made and the bank account they are to be paid to.  Be particularly suspicious if you get an email purporting to change the bank account to which payments should be paid.

You can also double-check that the email address throughout the process is still the same – as fraudsters sometimes trick people into thinking an email is genuine by creating a similar email address. 

This is when a tenant will rent a property using fake documents, then change their name by Deed Poll and take on the landlord’s name which can be found on the tenancy agreement.  Using this new name and fake documents, the criminal then puts the property on the market with an estate agent.

When the property is sold, and a solicitor starts the conveyancing process, it may be difficult to spot any discrepancies and the sales transaction may go through if no-one is alerted.  If the criminal receives the proceeds of the sale, the money is usually swiftly transferred to an overseas bank account and impossible to retrieve.

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Again, landlords should always use the anti fraud services provided by the Land Registry, and discussed above. 

Then you will be notified if someone tries to sell the property.