Don’t Get Burned by Rental Listing Scammers

The real estate market in California is hot and some people searching for apartments and home rentals are getting burned by purchasing useless rental listings.

Crooks are ready to take advantage of the unwary by selling listings of rentals that either aren’t available, don’t exist or are in foreclosure.

The California Bureau of Real Estate (CalBRE) warns consumers not to become a victim of such scams, which are most prevalent in areas where affordable rental housing is difficult to find.

A prepaid rental listing service is a business that supplies people with lists of residential properties for rent. The prospective tenants are required to pay a fee in advance or at the time the listing is provided. This business requires a prepaid rental listing service (PRLS) license from the Bureau of Real Estate or the person running the business must be licensed with the bureau as a real estate broker.

Wayne Bell, Real Estate Commissioner and CalBRE chief officer, says that consumers must be careful when using PRLS companies and offers this information to help you avoid problems.

Red Flags

  • The PRLS company only accepts cash (because credit cards allow for disputing charges).
  • The PRLS company guarantees the prospective tenant will get a rental in his or her price range, as well as a desired location, along with other positive options (such as allowing pets).
  • The list of rentals is handwritten and not computer generated.
  • The company does not provide property management or owner contact information for a prospective renter to schedule an appointment to visit the property.
  • The company asks the consumer to contact them instead of the property manager or owner if there is an interest. Typically, a PRLS company will provide you rental property addresses and property manager or owner information so that direct contact can be made by the client.
  • Company representatives use only first names. Note: Last names may be omitted and first names are often changed to avoid detection by law enforcement or to keep from being sued.
  • The company has only been in business for a brief period of time. Some PRLS companies open, quickly close, and move around a lot to avoid customers seeking refunds.

Avoid Being a Victim

  • Check the real estate and/or PRLS license HERE. And please note that there are very few PRLS licensees statewide. The list of such licensees can be viewed HERE.  Companies operating lawfully under a PRLS license must maintain a $10,000 bond or cash deposit.  Scammers will just take your money and there is no recourse.
  • If the PRLS company is not licensed, consumers should not use that company and should report the company to CalBRE.
  • If licensed, also check the PRLS with the local Better Business Bureau.
  • Do a Google, Yahoo or Yelp search on the Internet to see what others say about the company.

Read Your Contract with the PRLS Company

Protect yourself by reading your contract carefully. Before any PRLS company accepts a fee for rental listings it must provide a contract stating the amount of the fee and specify what services will be performed in exchange for the fee.

  • The contract must include a description of the kind of rental unit the consumer wants to find.
  • Even if the contract is signed electronically, consumers can and should still request a printed copy of the contract. This must be provided within five working days of a request.
  • Consumers need to be sure the contract states exactly what sort of rental listings will be provided. For instance, if a consumer is looking for a specific number of bedrooms, a maximum rent amount or listings in a specific area, this must be written into the contract.
  • The contract must state an expiration date of no more than 90 days from the date it is signed.
  • The PRLS company must also disclose small claims court remedies available to you should any issues arise.
  • If the PRLS company fails to provide the specified features, this is one of several conditions that would form a basis for the customer to receive a refund.
  • Prospective renters using a PRLS must carefully review the refund section of the contract. It is important to understand what rights you have should a refund be requested.

If you feel you have been the victim of a prepaid rental listing service licensee, please file a complaint HERE.  And if you have been victimized by an unlicensed scammer, CalBRE wants to know.  Contact them at 1-877-373-4542.

Sources:

Consumer Fraud Alert and Warning – Prepaid Rental Listing Services (PRLS)

Consumer Alert: Warning Regarding Online Rental Schemes