Is my potential Rental home a scam of in Foreclosure

Rental Property Scam

So you have finally found the rental property of your dreams,  but with the constant wave of foreclosures hitting the market you are a bit nervous that the property you found could be in foreclosure. Worse yet how do you verify that the person you are dealing with is actually the owner of the property and it’s not some kind of scam. How do you protect you and your family from con artists when it seems that a new one is on the news every other day ? The best advice I could give is directing you to seek the help of a professional real estate agent and/or real estate attorney who might be able to guide you in the right direction. However, I want to help my fellow Central Floridians help themselves. So this post is all about helping you protect yourself against common rental scams.

These con artists will usually work some kind of angle on their victims. They will use your greed, fear, hope and needs against you for their benefit. If it seems to good to be true 9.9999 times out of 10 it is. I was very fortunate to find an amazing office space that we moved into this past year and in the back of my mind I wondered, “is it to good to be true”. Over the years I have learned to question and question to help protect myself and it has helped to make me a better person all around. Ronald Reagan famously coined the phrase “trust but verify”. I believe in this mantra and I live by it. Common scams in today’s market include individuals who find a vacant property claim it as their own and place it on the market for rent. They take the tenants money and possibly collect monthly until they are caught.

If the property that you have found is managed by a property management company or apartment complex (with in house leasing) you are safer than dealing directly with a homeowner. This is because if a property is in foreclosure and the manager knows this they must disclose these facts to you. Tenants do have specific rights regarding rental properties that are in the process of foreclosure, but we will go into that on a different post. There are some companies out there that are less than honest. Make sure the company you are using has rentals on their website; this is because rogue agents do exist. In real estate, agents must work for a real estate broker. The state set it up this way so the brokers can act as managers for their agents. Some brokers are good and manage their agents well, while others have rogue agents in their business. Property management is typically run from a company level as agents are independent contractors and are not authorized to hold escrow (tenants deposits). However, sometimes agents go “rogue” and decide they are going to manage rental properties without their broker knowing (or maybe the broker does know). I had a client come to me who had this happen to them. The agent was not authorized by the broker to manage rental properties, but nevertheless the agent started to manage the clients property and subsequently found a tenant for the property and moved that tenant in. The agent proceeded to keep the tenants escrow deposit as well as all rents received and never paid the owner a dime. It was a lengthy court process and the owner ended up recovering funds from the broker, but it was nearly a year later and in the meantime the tenants were displaced. Call the property management company directly and make sure you are dealing with a company that has more than one point of contact. Offer to bring your first months rent and your deposit to the office directly instead of letting the agent pick it up.

Now what kind of research can a tenant do to make sure that they are in fact dealing with the owner? First of all it is important for tenants to know that real estate is typically regulated at a county government level. Therefore, the property appraiser, tax collector and county court systems will be your friendly sources of information on public records. Social media can also be an important tool (for researching and possibly finding pictures of the owner once you have found a name).

First things first, you will want to check your county’s property appraiser site and check the name of the owner. In Orange County the website is www.ocpafl.org and in Seminole County the website is www.scpafl.org. You can find your county’s property appraiser website by googling your county’s name followed by the words property appraiser. In some counties it is the tax collector who will hold the name of the owner, but for most Florida counties it is the property appraiser. The property appraiser website is where you will search for the property and the property will give you the owners name. That way if you run into someone on craigslist who claims to be the owner but his or her name doesn’t match the owner on the property appraiser you might want to ask more questions.

Next,  to check to see if the property you have found is in foreclosure. Since foreclosure filings are a legal filing you will have to check on the public records of your local clerk of the courts website. For Orange county the website is www.myorangeclerk.com and for seminole county the website is www.seminoleclerk.org. Here you will use the owners name you just found on the property appraiser site to search for any foreclosure filings against the owner for the property.

Now if you think you have found something contact a professional for help. There is no set fee for a professional to help you and you might even be able to ask a property owner if they will pay a referral fee to a professional who can facilitate the transaction including the handling of all required paperwork.  These tools will be helpful for you to research the property you are looking to rent and research and questions are your way to protect yourself.