Most tenants are honest and honourable, but sometimes you can get caught out.
Here are five things you can do to protect yourself.
1. Register a restriction at the Land Registry
This is a special service offered by the Land Registry designed to prevent forgery. It does this by requiring the solicitor or conveyancer acting in a transaction, to certify they are satisfied that the person selling or mortgaging the property is the true owner.
As of 1 February 2012 this service (which normally costs £50) is free to property owners who do not live at the property. You can read more about this at the Land Registry website.
2. Provide a different address to the Land Registry as the address for service
If your tenant is trying to sell or charge your property, you may not find out about it if the only address the Land Registry have for you is the property address itself.
You can have up to three addresses registered so make sure you have at least one other address registered.
3. Carry out detailed credit and reference checks on potential tenants
Although your ability to assess potential tenants may be exceptional, there is always a first time for getting caught out. Remember that con men succeed because they appear plausible and respectable. That is their job.
Proper referencing will not pick up everything but if it is known that you do this you may not be targeted.
Conversely if the fraudsters become aware that you never do proper referencing you may find that they are your tenants.
4. Never pay out against a cheque before it is cleared
This is a scam which apparently is used more against agents than landlords. A large cheque is sent, ostensibly for rent in advance, and the agency is then put under pressure to pay out against it before it has cleared.
Needless to say it doesn’t clear, and the agency is then left out of pocket. 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
5. Don’t accept large cash payments up front, do carry out regular inspections
As you are no doubt aware, it is not unknown for criminals to rent properties and then convert them to cannabis factories.
I wrote about this a couple of years ago and you will find a helpful police guide here.
For detailed information I suggest you read the article and the police pdf. However one sign to watch out for is payment of a large amount of the rent in advance, in cash.
It is also suspicious if tenants are very anxious (after making the big cash payment) to be left alone. Understandably if they are going to drill holes in your walls for electric cabling and install high-powered lighting using illegal power supplies (which is what they do).
So insist on payments (at least where they are substantial payments) being done via a bank, and make it clear that you will be carrying out regular inspections.
In my work I have seen property fraud increase by, I would estimate, 200% in the past 10 years.
The new land registry service is a boon with the Olympics coming up and the opportunnity to make very big money very quickly tempts the scammers out of their holes.
Another useful free resource is Prado Document authenticator website http://prado.consilium.europa.eu/en/homeindex.html Its not as comprehensive as Document checker but it is free and still has loads of photos of ID cards, passports etc, that you can zoom in on and see the details of what documents should look like. It also tells you what to look out for. We use it all the time as well as Document Checker and see many fraudulent documents being passed off every week in an attempt to gain housing assistance
This is a valuable post that more landlords should read! I’m sorely tempted to stick it on my fridge in the hope that my landlord sees it! He is 82 years old and has just revealed that the creepy downstairs neighbour has a key to our flat in case he needs to switch the fire alarm off (yes you can only turn it off from the unit on our floor!!).
I’m now petrified I shall come home to find him there. Also nervous that if he does steal something, my insurance company will laugh in my face because he has a key to the place!!
May well be time to move….
I am amazed how often people still get stung by the non cleared cheque scam as its is such an old one. I think part of the reason that it still happens is that it is so rare to be paid by cheque these days that people who are quite young dont even realise that their is a clearing period!