Ruthless "Scamlords" Rip Off Would-Be Tenants

Call it the next wave of the foreclosure crisis. Scam artists, posing as landlords, hoodwink prospective tenants, absconding with their rent and deposit money.

In California, where vacant, foreclosed homes glut the marketplace, law-enforcement officials and legal aid clinics have seen a spike in landlord-impersonation cases over the past few years, according to a story in the San Francisco Chronicle. "The properties are just sitting there and easy for con artists to use," Dean Preston, executive director of San Francisco's Tenants Together, told the Chronicle.

Here's how the scheme works: scam artists descend upon foreclosure properties, which remain empty for extended periods of time. They change the locks, advertise the property on Craiglist at an attractive price, then prod prospective tenants with high-pressure tactics, telling them they need to come back soon with cash for the deposit. Unwitting tenants comply, sign the lease and move in, only to confront the legitimate owner — typically an agent for the bank — a few days later. "Then they're out whatever cash they've laid out," said Fiona Ma, a California Assemblywoman who has sponsored a bill to treat landlord impersonation, currently a misdemeanor under California law, as a felony.

One victim profiled was Raquel Rupple, a Sacramento receptionist who found a one-bedroom apartment on Craigslist, advertised for $600. She met with the alleged landlord, toured the apartment, provided references and, an hour later, fielded a phone call from him, saying she'd been approved. The next morning, she met with the alleged landlord again, signed a lease and gave him more than $800 in cash — a security deposit and the first month's rent. She moved in that day. Two days later, the apartment's actual occupants, who had entrusted the bogus landlord with their keys, returned.

Like Rupple, many victims pay in cash — confounding efforts by law enforcement officials to track the scammers — and never recoup their losses. "Part of the problem is that banks who take over foreclosure properties don't maintain them and don't pay attention to how they're used," Preston said.

Still, prospective tenants can take steps to protect themselves. Before signing a lease, tenants should inquire about the property's actual owners at the county recorder's office, according to Christine Minnehan, director of legislative advocacy for the Western Center on Law and Poverty.

And, as with any commercial transaction, tenants should remember the maxim caveat emptor, or "buyer beware." As Assemblywoman Ma said: "If it seems too good to be true, maybe it's not true."

Photo credit: Jeremy Burgin