Tenant scamming the system

8 Replies

I want to share our recent land lording experience. Me and my partner acquired a quadplex and have decided to manage the tenants. For one of the empty unit, we have screened the tenant (background check came with no eviction records but with few cases due to forgery). (Mistake1) We have decided to approve the application due to lack of other applicants. (Mistake2) Tenant signed the lease and decided to move in and he gave two personal checks( deposit and first month rent ) mistake3 Both checks are post dated to April 1 and tenant moved in by March 25. We deposited the check on April 4 and both checks bounced.Tenants promised that he is working with bank due to some ID theft and the account closure.he even provided some forged bank documents stating that the issue is genuine. Daily status check from tenant got same answers that he is waiting for the check from his closed account. We send the Notice or quit letter followed by eviction notice on April 23. (Mistake4 waiting too long) Court date received on May 7 and tenant want to negotiate with us. Tenant came with proof that he deposited the rent that day in the bank. ($1275) Judge asked us about our decision to settle or return the money back. After a bit confusion, we tried to verify the deposit however We were unable to verify the deposit because of the payment date was the same date. (Mistake 5 - providing our bank account ) We requested the judge to postpone and give us another date due to fact that we couldn’t verify the deposit. Thankfully, the Judge postponed after a week to May 15. Notification received from bank Two days ago, that the deposit again bounced due to lack of funds or closed account.($1275) I am glad that we didn’t blindly believe the tenant and Canceled the eviction process. We got no deposit, no rent from the tenant from March 25 until today. On the other side, We spend $400 for repairs on the A/C unit. The reason I have decided to write this, to help other landlords to not fall into these scammer tenants and learn from our mistake to not accept any personal checks for Deposit or first month rent. Lesson learned.

NEVER, EVER, trust a tenant with ANY excuse, especially "problem with my bank". However, this one is all on you. His background came back with forgery charges and you chose to rent to them anyway. And guess what? You were a victim of fraud and forgery!!! Imagine that!

If your tenants don't have a 100% clean record, move on! PERIOD!!! NEVER, EVER accept personal checks for rent (or anything else in my opinion). Get a money order from your bank or a cashier's check. I don't even accept cash.

Originally posted by @Ray Harrell :

NEVER, EVER, trust a tenant with ANY excuse, especially "problem with my bank". 

When I was a student, the only check that I ever bounced was to my landlord...and it actually WAS a bank error! 

Seems that they added a ZERO to the prior check ($75 became $750) and this left nothing for the rent. 

Originally posted by @Ray Harrell :

NEVER, EVER, trust a tenant with ANY excuse, especially "problem with my bank". However, this one is all on you. His background came back with forgery charges and you chose to rent to them anyway. And guess what? You were a victim of fraud and forgery!!! Imagine that!

If your tenants don't have a 100% clean record, move on! PERIOD!!! NEVER, EVER accept personal checks for rent (or anything else in my opinion). Get a money order from your bank or a cashier's check. I don't even accept cash.

Lessons learned in a hard way.  

@Moncy Samuel Sorry to hear about your problems. I second @Caleb Heimsoth that you need a property manager. I do not accept any personal checks or money orders. I only accept electronic deposits. I have a temporary account that I provide the information to the prospective tenants for their deposit and rent payments. Immediately after the deposit is made I get a text from my bank and the money is quickly transferred to a different account. Problem solved...

Most landlords now use direct deposit sometimes using Zelle service. In other words, no successful deposit in designated account, no money period. Check lose, mailing, the electrons are way faster.