Welcome to True Crimes in Real Estate. In this series of articles, I will share with you actual scams. Some executed on people I know. Others I have personal experience with. These are chosen for the educational value they represent. As Sy Sims said in his commercials: “An educated consumer is our best customer.” Time to get educated.
Today’s case is called The Good Tenant or The Amazing Mr. X. This particular type of case keeps coming back in all kinds of forms. The basis of which is the same. I call them the imposter scams. Let’s see how The Amazing Mr. X pulled this one off.
True Crimes Case # 2036 The Good Tenant or The Amazing Mr. X
The owner had rented an apartment to a “good” tenant. Background checks reveal no problems. Neither did credit checks. There was not much on Mr. X. He did most of his business with cash. This tenant paid his rent on time. He was the ideal tenant for an owner starting out.
The Moment of Truth…
One day the owner comes home to find someone moving into Mr. X’s apartment. Questioned the person says, “Hi, I’m the new tenant.” To which the owner looked him in the eye and says, “Can’t be Mr. X rents here.” Next, tenant number 2 shows up with a key in hand. He opens the door and walks in. This person claims to be the new tenant and on it goes. More and more “new tenants” arrive at the apartment.
The owner figures out what has happened. He informs all that they are victims of a scam. And there is nothing that he can do. He takes all the keys; changes the lock.
In this true-life case, the owner did find a desirable tenant out of the many that showed up. As for the others they are hunting for the amazing Mr. X.
Epilogue?
There was a glimmer of hope Mr. X would face justice. The owner’s wife one day sees Mr. X on a crowded train. She followed him. He disappeared in the rush hour crowd. Mr. X is free to scam again.
This is a true story as are all the ones I relate to you. How did Mr. X pull off the scam? If you subscribe to any of the services I recommended you already know. Not sure? This is how it was done.
How It Works
The scam was simple. The one requirement on Mr. X’s part, patience. Mr. X rented the apartment and pretended to leave for work every day. He left after everyone else in the building departed. He observed how long the building was empty. Which days the owner would stop by. What time tenants returned home.
Place The Ad
Mr. X paid his rent on time and caused no trouble. When the time was right, he placed ads online and in papers careful not to give out the address. He screened the prospective targets. Mr. X made sure they saw the apartment at the time of his choosing. The building would be empty. Odds of being caught were very small.
The Meet
Mr. X instructed each person to meet him outside the building. He would let his targets in using his keys. He did the usual showing of the apartment. Even presenting a rental application. Mr. X tells the person to fill it out right there and then. If the prospects refused he would reject them for the apartment. All prospects filled out the application.
Mr. X did not have much furniture. His excuses; he was seldom home. He had lost most of it, or it was in storage. The story changed with each person he met with.
Moving Day
Mr. X waited a few days to inform each victim they got the apartment. Each was told to come with the 1st month’s rent and deposit. They were given a day with a specific time. He handed each the keys to the apartment. Mr. X. stated that he would be out by the weekend. The victims try out the keys, which–surprise, surprise–works. This gains the mark’s trust. No one suspects a thing. Mr. X moves out. Without much furniture, this takes no time.
The rest you already know.
Red Flags
Did you spot the red flags in this scam? There were many. The victims missed them or ignored them. How did you do?
- Line Item 2: No address given for the apartment. This may or may not be a red flag. Lots of owners list the property without an address. This is to keep people from coming to the apartment at all times of the day and night. Owners will list a contact number. You will get the address at the time of the showing. The scam artist has learned to use this to their advantage.
- Line Item 3: Restrictive time of showing. Owners will show at times convenient to them. They will make allowances for people who have odd hours. If you encounter someone who will not adjust their schedule, consider that a warning.
- Line Item 4: You meet the person outside the building never at the apartment. The reason, the person will meet you after work.
- This happens if the scheduled appointment time is close to work hours. Insist on a day or time when this will not happen.
And Then There’s
- Line Item 5: You are told that you will be rejected from consideration unless you fill out a rental application right now.
- Note: A phony rental application may ask for information that can be used to steal your identity.
- Line Item 6: The apartment is sparsely furnished. This is a sign that the person may not live in the apartment. Mr. X claims to be the owner. You would expect an owner to fully furnish the apartment.
- Line Item 7: A working set of keys is not proof that the deal is legit.
- The day you close the deal is the day you can move in. Make no payments until the closing day. Do a walk-through of the apartment. At closing you receive a lease, rider if supplied, keys, receipts for security and 1st-month rent. Will a scammer supply all of this, sure will. See The Phantom Owner
Taken by themselves one of these red flags may not be anything. Add them up and it’s time to reconsider the rental.
Steps you can take
Line Item 2: Get the address to the apartment. Check the ownership of the building.
Line Item 3 & 4: Visit the property at times of your choosing. Speak to neighbors or tenants that you see at the building. Check out the neighborhood at different times and days You may be surprised at what you learn.
Line Item 5: Don’t sign under duress. The threat of losing an apartment if you do not make out a rental application on the spot is a red flag. True you need to make out a rental application if you like the apartment. Before you do read: Required Docs and Rental Application fees. Know what is legal on a rental application and what is not.
Line Item 6: A sparsely furnished apartment does not mean the person is scamming you. But taken with the other items it’s time to rethink the apartment.
Line Item 7: Working keys are a way of gaining your trust. Tenants cannot lease an apartment but they can sublease an apartment. This requires the owner’s permission and is sometimes stated on the lease or rider to the lease. Mr. X claimed to be the owner. Again verify ownership.
Question To You
Here is my question for you. Would have spotted this scam? Has someone tried this one on you? Be you, owner or renter, remember this story. It may spare you pain one day.
Time for a change
You may be thinking, “Hey you just told the bad guys how to rip me off”. Wrong, they already know how to rip you off. You didn’t know how to spot it. How to stop it. Now you do. The playing field is level. In New York, Caveat Emptor–Let the buyer beware–is real. Lack of due diligence is not an excuse. It’s how you get ripped off. It’s time to change this. You are becoming an educated consumer. Time for “Let the scammer beware.”
Read about other imposter scams here: Couples Get ripped off and The Phantom Owner
ScamBusters
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Disclaimer
Disclaimer: I am not a lawyer and nothing stated here is legal advice. This article applies to the five boroughs of New York. All information deemed accurate but not guaranteed. Always check the real estate laws in your part of the country.
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