15:50 PM, 9th January 2012, About 10 years ago
Having written my article on the predicted downside of renting during the Olympics I thought I had better provide a bit of guidance for landlords on how to avoid getting ripped off.
Foreign sports tourists are also open to abuse simply because they don’t know London or the way things work in the UK. Already many scams abound, using a major online property website who I obviously won’t mention for legal reasons but I’m sure you all know who I am talking about.
The thing is, if you are from Cameroon or Winnipeg you don’t necessarily know the going price for a 3 bed house in Peckham against a similar property in Bayswater yet are expected to stump up the cash by money-transfer just the same.
No criticism meant to anyone from abroad who might be reading this, after all I don’t know the going rental rate for a property in Cairo or Montevideo. But foreigners will be looking at (supposedly) British run websites to find out where to rent somewhere for the games and as we all know, it doesn’t take too much to make a website look kosher. I adore the internet and think it is one of the most important developments humanity has made but it is also home to a lot of rubbish and crooks, you really need your faculties about you.
However, my remit here is British landlords and to highlight some problems they may face.
I mentioned in my other article on this subject a common property scam that is widespread and I believe that variations of this scam will form the backbone of what is to come for the Olympics. The old ‘Rent a place out and then re-let it pretending you are the landlord’ scam.
This is endemic in London at the moment. I recently attended a meeting of our local County Court user’s group where we get to chat with judges off duty who for once aren’t just shouting at us for being stupid, and lovely old Judge Lee (retired a few weeks back) told us that they have been pulled into more of these cases in the past couple of years.
I estimate that around 50% of my daily work now involves some form of property scam, as opposed maybe 10% a decade ago and it is usually a variation on the above. In PRS housing it really is a new growth industry.
Just look how easy it is. You become a tenant and then sub-let the property without anyone knowing, maybe for a little more cash or, as is more common, the tenant (pretend landlord) re-advertises the property and takes a month’s rent in advance and a deposit off of several prospective tenants at once. Now with a standard London flat rent being around £1,100 a month and the usual 6 weeks deposit which is common in London these days you are talking £2,750 just to get in, without agents fees on top. So the scammer re-lets to 5 people and nets a cool £13,750, never to be seen again.
These guys are running several of these scams at once so you can see how lucrative it is. Right now I have complaints from nearly 20 tenants against 4 separate fake agencies using the above hustle in one form or another. This is just everyday stuff, not connected to the Olympics…..Yet!!!
Now imagine their little eyes shining with opportunity that they could rent out a property for £15,000 for the month to people from abroad who don’t know their Arsenal from their Elephant and Castle?
There are 2 ways they can do this. They either start a website pretending to be a specialist agent themselves or they can just sign up with a genuine agent or landlord to take it on themselves as the bogus short term tenant.
My guess is that the danger will be the money up-front deals as they don’t even have to stiff the reputable agent or landlord over this, they can genuinely hand over the money. A respectable looking guy in a suit and a decent car backed up with a professional looking website that demonstrates they do corporate event deals for a large Chinese offers up £20,000 on the nose to the professional agent. Once they have a guarantee of the property being theirs for the right period they start farming it out to people across the globe looking for an affordable place for the games at let’s say, £10,000 for the month. They take money from 10 prospective customers from Paris to Sydney, netting £100,000 in one fell swoop and just knocking the £20,000 fee off of the profits as a business start-up fee.
It is so easy it’s ridiculous, so my question to all you landlords reading this who might want to avail themselves of the Olympic bonus is, if you are dealing with a foreign tenant or a foreign booking company directly how will you know if they are genuine or just looking to pull off this popular fraud? What questions might you ask? If you are using a British letting agent to do this for you, what questions are they asking? What proof are they looking for? Even if they are a respected and well-known name what strategies do they have in place to prevent themselves from being scammed and in the process, passing that problem onto you?
A friend of mine who runs a ticket and event company of 30 years standing got ripped off to the tune of £25,000 by a fake company selling world cup tickets they didn’t actually have. And he was a clued up insider, wise in the ways of his business who exercised extreme caution because he hadn’t heard of them before.
Of course you might take the view that as long as you have your £15 – £20K in your bank account you don’t care if the Korean 800m relay team arrive with all their bags while the Fijian high jumper is moving her stuff through the front door, trying to fend off the attack of the lone Somalian fencing champion in which case, fair enough. In fact give me a call and I’ll come around and film it, we could make a fortune. But you will in some way become embroiled in the fallout.
The agent could also take that view. If Smith & Jones Ltd takes £15,000 for each of 10 properties on their books, from cash payers Global Corporate Events Ltd of Tokyo, they have their money anyway, as does the property owner and so if disgruntled sports tourists get shafted what do they care? The responsibility lies with Global Corporate Events, who obviously don’t exist; it’s between the tourist and the person they paid the money to.
There are websites out there where for £15 you can buy an ID card for any country in the world. To tell if the cards are genuine you need special optical equipment. We have it in the homelessness unit in which I work and we use it every day, and every day we see fakes that can’t be picked up with the naked eye. You can use these fake IDs to open bank accounts, and a wealth of other bits of proof that on their own aren’t too convincing but when 4 or 5 are put together it gives the impression of being a genuine identity.
Scammers know this, it is their stock in trade, and it’s the world they live in. You can bet your life they have already started building authentic looking corporate identities.
To recap; How will you know if your short-term foreign tenant is who they say they are and if you are using, even a respectable agent, what checks do they have in place to do the same thing?
If the Olympics turn out to be a once in a lifetime payout for you, then well done, I mean that sincerely. I’m not trying to put people off doing it but just exercise caution. Don’t let a brown envelope of cash or even a genuine figure in your bank account, paid in by a well-known and respected British letting agent sway you. Like Shaw Taylor used to say on Police 5 “Keep ‘em peeled”
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