Identifying tenancy fraud red flags

When you are letting a property, the last thing you want to do is fall victim to tenancy fraud. But it’s a real risk, with the cost of living coupled with increasing interest rates putting even more pressure on tenants.

While there are several preventative measures you can take, there are also a number of red flags to keep an eye out for. These could signal a potential problem and suggest you should either avoid or investigate further before letting your property to the tenants concerned.

If a prospective tenant is in a rush, then, as their potential landlord, you need to stop to ask yourself an important question – why? Of course, there might be legitimate, valid reasons behind their need to move fast – a sudden change of circumstances such as a relationship breakdown, for example. But their urgency to move might also signal that they were evicted from their last property and need to find a new home quickly.

This urgency is likely to show up in other parts of the process. If they are rushing to get a deal done quickly to secure your property and trying to bypass traditional due diligence checks in the process, then it’s another sign that their haste might be down to reasons other than those they are letting on.

To proceed with a tenancy, you should be asking for identifiable details such as full name, date of birth and so on to enable you to vet their application and surface any history of arrears or bad behaviour. A hesitancy to provide this sort of information could mean that the prospective tenant isn’t who they say they are and that they’re trying to commit fraud or hide negatives.

Another part of the letting process should be a credit check to ensure your prospective tenant can afford payments. If they are refusing or seem unwilling to do this, then they may well have a criminal record or poor credit history that they are trying to hide from you, and could be a risk for rent arrears.

While advance payments may seem like a windfall for you as a landlord, you must again ask yourself why. Money laundering is one possibility, or trying to win you over to do a deal quickly is another. Perhaps, they want to gain your trust to only abuse it later. Similarly, be alert if they ask to pay by cash. Is there are reason why they are avoiding leaving a paper trail?

Keeping an eye out for these red flags is essential for you as a landlord and, as with any red flag, trust what your gut is telling you. Dig deeper if anything they are doing sparks warning signs. By recognising these red flags, you can then take the appropriate measures you need to prevent falling prey to tenancy fraudsters.