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Welcome to Day 3 of "Property Fraud Awareness Week" which is powered by our legal partner, Anthony Gold Solicitors and where we have joined forces to promote public awareness of how to avoid becoming a victim of property-related fraud.There has been a marked rise in property related fraud - “sellers” who do not own the property; bogus agents taking deposits for tenancies that do not exist and massive returns being offered for investments in property that will never yield any form of return.Large areas of the property sector are entirely unregulated, and the high transactional nature attracts fraudsters and con-men, or those that believe they can offer a legitimate product or service, when in reality, they are unable to.Although the names change, the method remains the same. Understanding that method, how to undertake intense due diligence before parting with any money, and not falling for sophisticated marketing techniques is vital for people to avoid being defrauded.This week will focus on prevention as much as cure.Today, Solicitor David Smith talks about scams surrounding Rent to Rent, including illegitimate set ups of R2R tenancies, and the serious issues they can cause landlords:The other issues about Rent to Rent are breaching mortgage terms and conditions - if the property is mortgaged - and breach of insurance T & C's.Daniel Burton was a self-proclaimed Rent to Rent operator and trainer. However, he shut up shop and disappeared owing large amounts of money to both tenants and landlords. He is the most high-profile rent to rent scammer, but I have seen evidence that other people are taking on properties and turning them into unauthorised HMOs which lands the landlord in trouble.Here is one such example:This landlord is allowing the head tenant to stay on despite these misdemeanours, and I can only conclude it will not end happily for him.Find out more about the work of Anthony Gold Solicitors >>> here. They can also be contacted on 0207 940 4060.Still to come ....Thursday - Identity theft scams - with Beth HoldenFriday - Lettings agent scams - with David Smith.Property Tribes has been at the forefront of creating a safer sector and shining a light on fraudulent companies. Back in May 2009, we published How to avoid becoming property shark bait which has hopefully saved many people from financial loss. This platform has allowed many stories of financial loss to be told, creating a due diligence resource for future investors, so do put a company's or person's name into the Property Tribes search engine or create a post here asking for member's thoughts.Despite this, many people continue to fall for marketing hype and think they can buy a ticket to see a Unicorn. That is why "Property Fraud Awareness Week" is much needed and we hope it will educate people to make wise choices of how they "invest" their money in the property sector, whether that be in deals, mentoring, training, or other money-making schemes.SEE ALSO - Overview of property fraud and warning signsUP NEXT - Rent to Rent - how NOT to do it! DON'T MISS - Rent to Rent and mortgage T & C'sNOW WATCH:
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
I really do struggle with the whole legality aspect of RTR. It also casts a doubt on the whole multi-let industry when unsuitably equipped properties are turned from single family units to HMOs.
Funnily enough since I stopped advertising on Gumtree a few years ago I stopped getting RTR enquiries.
Thanks for raising awareness of this type of scam and David provides a great summary of how it can vary.
In cases where the landlord has no idea that the tenant is subletting (creating extra rooms etc) there isn't enough protection today, but we are working on improving this. In setting up a RentProfile a landlord receives alerts when there is suspicious activity on the account (such as renters searching for your address, when you've stated it's not available to rent). A landlord profile also helps show prospective tenants you are genuine, preventing fake landlord fraud. The service is free for up to 5 properties.
Property Tribes support these efforts (thank you Vanessa) and covered us when we launched back in October:
There is a good article in the Telegraph today about Rent to Rent and sub-letting scams.It offers this bit of useful advice:
I wonder which category of Rent to Renter these people fall in to?
Let's be clear what these people are saying.
i) I knowingly intend to breach planning permission rules in a property that I don't own, just rent.
ii) If I am found out, I intend to walk away, no matter what my contractual agreement is with the property owner.
iii) I have not told the property owner what it is I am doing and my contract with them will not set that out.
iv) I will take a number of steps to hide what I am doing from the council and the property owner.
And they talk about 'due diligence' (DD)?
This should put anyone being approached by R2R chancers on the highest of alerts.
Anthony Gold Solicitors
Arthur Zurvskij was found guilty of illegally sub-letting a five bedroom house in Willesden to seven tenants.
Instead of securing a House in Multiple Occupation licence from Brent council, Zurvskij - director of Skyline Property Management; a name he later changed to Enox UK Ltd - rented out the property through Ludlow Thompson letting agency.
The owner of the property, who lived in the United States and had legally handed over control of his property to Ludlow Thompson, believed that the property was being rented out to a single family.
During the trial, Willesden Magistrates Court also heard that Zurvskij had not sought written permission from the landlord to let the house to more than one household. He was ordered to pay £2,250 in fines while his company Enox UK Ltd, had a £8,000 fine.Full/source story - Letting Agent Today
A team of enforcement officers raided a property in Brent and found two head tenants, Adam Trantu and Liliana Caragheorghe, and the landlord in breach of house in multiple occupation (HMO) management and licensing regulations.
The boyfriend and girlfriend head tenants, who were not living in the property, had been illegally placing tenants inside the property at a rate of more than £3,400 a month over a two-year period.
Adam Trantu and Liliana Caragheorghe, who were tried in their absence, were fined £12,000 at Willesden Magistrates Court, and were also each ordered to pay costs of £1,200 and a surcharge of £170 after being found guilty by the District Judge of profiting from chronic overcrowding.Full/source article
PT should be recognized for the great work they do exposing crooks, cheats & scum. An OBE For Vanessa! (At least).
Something like my late uncle's KCVO..