How to avoid rental scams

There are more online rental scams deceiving and defrauding renters than ever before. In 2021 alone, the FBI reports that over $350,000,000 was lost to fraudulent listings, stolen deposits, unethical landlords and similar scams. Before starting on your next rental search, know how to spot the most common types of rental scams and how to avoid them. For example, working with a rentals agent and using a third-party online rental application provider like RentSpree can help protect you from the rental scams we’ll discuss in this article.

Sublet scams

Before we dive into a sublet scam, it’s best to know the parties involved:

• Lessor—a landlord or tenant who legally sublets (rents) a room or portion of a house.
• Lessee—a tenant.
• Sublessee—a tenant who is not the original tenant listed on the lease agreement.
• Sublessor—a person who grants a sublease.

For example: If a person who is listed as the original tenant on the lease agreement subleases their apartment to someone else, they become the sublessor. The individual renting from a sublessor becomes the sublessee.

In a sublet scam, someone pretending to be a sublessee responds to an ad posted by a tenant who wants to legally sublet their existing lease. This sublessee will often target people looking for a roommate or a temporary sublet, and say they’re willing to rent the space immediately, sight unseen. A pretend sublessee will send a fraudulent deposit check, made out for an amount higher than agreed, forcing the sublessor to return the excess amount only to discover the deposit check has bounced.

On the other side of the table, in a pretend landlord/lessor version of the sublease scam, a fake landlord takes a legitimate applicant through the motions of renting a unit. The fake landlord has no rights to rent the unit, but will have the applicant sign fraudulent paperwork and disappear with their rental application fee and deposit.

Warning signs of sublet scams

• A single, almost-blank lease document: As a sublessee, be wary if you’re presented with only one document to sign containing limited information. A reputable landlord will have you complete a detailed lease agreement and additional paperwork that details the sublease terms.
• ‍No security deposit in the listing: Some scammers will act as leasing agents and demand a security deposit to protect their clients, i.e., the landlord, but the deposit is never documented in the property listing. Legitimate leases should disclose any fees and deposits in the written agreement.
• ‍Bad property reviews: Landlords or sublessors who have scammed others before likely will leave a trail of bad reviews. Look for multiple reviews with themes like the landlord suddenly raising the rent or security deposit at the last minute, or asking for a significant portion of the rent upfront. Numerous bad reviews on a property listing may indicate it’s being used as a scam.
• ‍Unusual rules or fees: If you’re asked to pay an extra charge for parking, cleaning, a pet fee, or if you’re asked to do something like clean the unit yourself or move out the previous tenant’s furniture that is not part of the rental agreement, it could be a scam. Any rules or fees not explicitly written in the lease agreement is not your responsibility, and could be an attempt by the landlord/sublessor to scam you.

How to protect yourself from sublet scams

If you are a tenant looking to sublease all or part of the property you rent, find a reputable real estate agent to help with the process. Beware of any deposits in excess of the amount you agreed to with the sublessee and confirm an applicant’s check clears before refunding any excess amount.

If you’re the sublessor, don’t sign any paperwork or hand over any money if you feel pressured, rushed, or uneasy. Always insist on a lease agreement and review it carefully for standard items like dates of occupancy, rent amount, standard rules about the number of occupants, processes for repairs, and contact information for who to reach if problems arise.

Deposit scams

In a deposit scam scenario, a scammer poses as a landlord or property manager and insists prospective tenants pay a large security deposit or rental application fee before they are even shown the property. When prospective tenants show up to view the property, they learn it’s either already occupied or not even owned by the fraudulent landlord.

Be wary if you’re charged an extra cleaning fee or an unusual one like a high-pet fee that doesn’t align with what’s included in the original listing. Be sure to verify the identity of anyone asking you for a deposit, and insist on written details about what your deposit covers.

Warning signs of a deposit scam

If the person identifying themselves as the property representative is pushy or refuses to provide payment details, they may be attempting to scam you. On the other hand, someone who seems extremely casual may also be a scammer trying to minimize any extra attention to themselves. In general, if someone is asking for an unusually large deposit, proceed with caution. As a rule of thumb, a typical security deposit is anywhere from one to three months’ rent.

Other red flags to watch for include unexpected documents that ask for additional personal information, like your credit card or social security number, and unusually tight deadlines. If a representative claims they need a deposit to hold a property, it’s likely too good to be true.

How to protect yourself from deposit scams

Before paying a deposit, insist on seeing a lease document so you can review all terms and conditions. Learn what the maximum deposit amount is for your local market and don’t agree to a higher amount. A knowledgeable real estate leasing agent can also help if you’re unsure about regulations or lease terms. If a landlord is rushing you or saying there’s no time to draw up a lease or provide payment details, beware—it could signal a scam.

Fake landlords

A landlord scam is when someone claims to be the landlord or property manager when they are out to steal your money. They might produce an unauthorized lease or rental agreement for you to sign or request payment of extra fees.

Warning signs of fake landlord scams

A fake landlord/landlady will not have any identification tying themselves to the company they work for, the property, or an official listing. If the landlord can’t prove they can legally authorize the collection of a deposit and rental application, be wary.

A common trick landlord scammers use is to have the tenant initial or sign only the corners of a lease page rather than use the signature box. Scammers can then cover your initials and signature and use fraudulent copies for another scam. Similarly, if a landlord asks you to pay a deposit that’s more than what’s outlined in the agreement, they could be scamming you.

How to protect yourself from fake landlord scams

To protect yourself from falling for a fake landlord scam, start by ensuring you understand what a standard lease agreement covers and what it does not. Always insist on signing or initialing your name in the appropriate boxes in the lease agreement, and review all addendums or additional rules.

Researching the landlord's business and confirming they are a legitimate property owner or management company can also save you from a scammer before engaging with them. A reputable business will have a lease and require you to undergo a screening process, which may be required by local landlord/tenant law. Taking the time to learn about your future landlord or management company can help you avoid interactions with a scammer.

Red flags to watch for when renting a property

In addition to those four common housing scams, you’ll want to look for these other red flags that could hint at a potential rental scam.

No lease agreement

The purpose of a lease agreement is to protect both the landlord and tenant from the neglect or misconduct of the other party. It’s a contract between the landlord or property owner and tenant, and minimizes risk of a scam for everyone as the information documented cannot be altered without written consent from both parties. If you discover there’s no lease agreement; the landlord refuses to provide a lease; or discrepancies in the agreement and deposits requested by the landlord, these are sure signs something is amiss.  

While there may be special circumstances in which tenants and landlords have an informal understanding absent a lease, your safest bet always is to walk away from the negotiation.

High-pressure tactics

Scammers will also employ a variety of tactics designed to put additional pressure on or intimidate you into rushing your decision. 

A landlord who shows you multiple properties in succession, for example, may encourage you to overlook red flags in properties because they leave little time for inspection. Scammers might also show you a model property and claim the actual unit is under renovation, when in reality the apartment is not under repair or already occupied. Other high-pressure tactics include showing applicants falsified rent receipts and property photos, or even threatening to report undocumented renters to immigration authorities. 

If you notice any of these high-pressure tactics being used against you, take a step back, and re-evaluate your search. Ask for references, like other tenants in the building, and documentation. You can also ask to see the lease agreement to ensure nothing unusual is being asked of you as a tenant. This will help you ensure the landlord and property managers are reputable, legitimate business operators.

Unreasonable demands

Scams unfold in different ways. A scam operator might refuse to meet you to view a property until you have wired them the deposit money. They could also claim they can’t meet because they are out of town, thus unavailable to show you the property, but still need your deposit to hold the property. 

Any time a landlord or property manager makes unreasonable demands of you, it’s a sign they might not be trustworthy. Look for landlords who ask you to complete a background check and can clearly explain their approvals process. While a background check costs you money, it also protects you by providing a paper trail for your application and is a legitimate step in the application process. 

Remember, a reputable landlord or rental agent wants you to see the apartment, sign the lease or application, and will provide some form of receipt to record and track your rent and deposit payments. Don’t bother with a landlord who tries to jump through hoops in the application process, asks for money to move your application forward, or makes demands outside the scope of what you are responsible for. 

Take these steps to protect yourself from rental scams

Research both the property and landlord

Start with basic research before investing money or time in a rental application. 

Check the property listing websites in your city and look for an ‘About’ section that provides information on the company and its history. You should be able to find local regulations and links to listings for available properties. Ask the landlord if you can talk to any of the tenants about their rental experiences, especially if they live in the area where you’d like to move. And when you finally do meet the landlord, come prepared to ask about things like security deposits, pet deposits, as well as what payment methods they use for rent collection.

Use verified tools and resources for your search

An easy first step is to sign up for notifications on property listing websites, like multiple listing services (MLS), that provide apartment rental listings. These sites will show you all of the rental listings in your area and you can further narrow your search through specific parameters. While sites like Facebook Marketplace or Craig’s List also offer rental listings, scammers are known to pose as fake landlords on those sites and there is less protection in place for potential renters. 

Enlist the help of a local rental agent

Hiring a rental agent can be a great option when searching for the perfect rental property. You can contact any real estate agency and ask for an agent who works to lease rental property, or find agents through a rental listing site.  

Agents are valuable assets when you're conducting a rental search because they know the area, can guide you through the application process, and help verify local landlords and property managers. If you’re looking for specific properties, like short-term rentals or student housing, a local rental agent can help you get started and steer you away from any potential scams. 

You can also ask a rental agent to confirm the owner of a property by searching their multiple listing system. With the help of an agent, you can verify the identity and validity of a property manager or landlord before ever having to engage with them.  

Verify the landlord and property

One way applicants can protect themselves is by confirming the identity of a landlord or property management company before starting the application process. To verify a landlord’s identity, there are three things you can do:

1. Look up the landlord or their property address. The local county records office or website under local tax records will show who owns the property if you enter the correct address. 
2. Confirm the name and address of the landlord when you call to set up a showing appointment.
3. If you have any reason to doubt the landlord’s identity, you could ask them for a form of identification that shows they work for the renting company. If they have business cards showing their title and office number, ask to verify their business card against a drivers license. You can also try to call the number on the card the next day and see if you get a person you recognize by voice.

Because property deeds are public records, you can easily access them through a quick online search of the county tax assessor’s records, which documents all legal property transactions. If you have difficulty finding information, ask for help directly from someone in the records office—it’s their job to help you. 

Make deposits using secure payment methods

When paying for rent or a security deposit, only use a payment method that is as secure as possible. Some of the most secure methods include using a bank account with a credit line attached (rather than a debit line), using a credit card, or paying by cashier’s check. Bank transfers and credit card payments should only be made online through a secure payment platform. 

To ensure actual payment is received and you don’t get scammed, only accept sure payment methods such as: 

• Paper cashier’s check 
• ACH payment 
• Mobile wallet 
• Credit card

Final thoughts on protecting yourself from rental scams

If you’re looking for a new rental property, it never hurts to exercise caution at every step in the process. Watch out for high-pressure tactics and unreasonable demands. If you feel uncomfortable with people, requests, or procedures, it’s always okay to restart your search. 

For additional security, consider working with a trusted rental agent to find a legitimate rental property managed by a reputable landlord. Once you find a landlord you trust, go the extra mile by asking what tools they use to screen and process applications. RentSpree's tenant screening offers peace of mind to both landlords and renters. It even allows tenants to save and reuse the application with multiple landlords with no additional screening fees.