Rental experts warn that rental scams could climb this summer as university students get ready to return to classrooms and families plan to rent vacation properties again after two years of quiet short-term rental activity.
The scams are a growing problem, especially during summertime as scammers post fake rental listings online to lure renters into making bookings and sending money, only to find out later a property doesn’t exist or is unavailable for rent.
“This is a time when these scams are expected to pick up,” said Chris Borkowski, a broker with Realty Executives Group, a real estate company in Thornhill, Ont.
Mr. Borkowski said whenever there is so much demand, scammers swoop in and start hunting for potential victims.
Students are struggling to secure housing in Canada’s overheated rental market
“In the city of Toronto, from early August, everyone is scrambling to find a place and there is a lot of competition with very little vacancy,” he said. “People kind of get desperate to find a place to live before the new school year starts.”
With most COVID-19 restrictions lifted and universities and colleges beginning in-person learning, international students who have been studying virtually are expected to return to campuses across the country. Mr. Borkowski said foreign students who are in their home countries might not be able to view an apartment they want to rent for the school year, are more likely than residents here to fall prey to rental scams.
“They might just be willing to send their deposit right away and secure the place without even knowing whether it exists or not,” he said.
Dania Majid, a lawyer with the Advocacy Centre for Tenants Ontario, a community legal clinic that protects low-income tenants and advocates for affordable housing, said if the renter is a student or newcomer who doesn’t know what a proper rental ad looks like, they are more likely to be victims of rental scams.
“Their attention usually turns to international students around this time, especially since they don’t know how the rental market here works,” she said.
But international students are not the only victims. Domestic students have shared their experiences with rental scams. In 2019, Ellen Choi, a recent engineering graduate from the University of Waterloo, lost about $3,000 to an alleged rental scam while searching for a place to live during her internship in Toronto. Ms. Choi said she saw an apartment listed on Facebook by someone named Morena Hui, who claimed to be renting the property, and Ms. Choi reached out.
“She was very responsive when I asked her questions about the property,” Ms. Choi recalls, adding she couldn’t come to Toronto to view the apartment because she was living in Waterloo at that time. “I was pretty desperate to find a place for my internship in the summer, so I was not really picky about it.”
Ms. Choi signed a lease and paid two months’ rent. But she said she was asked to make another payment – a security deposit. “She kept asking for more money and that was when I became suspicious and refused to make any more payments,” Ms. Choi said.
When Ms. Choi stopped making more payments, Ms. Hui blocked her on all social-media platforms. “That’s when I realized it was a scam, and I even went where the apartment was located but it turned out that it was some random person living there,” Ms. Choi said.
She was not the only alleged victim. At least 10 other students on a Facebook housing group alleged they were scammed through similar rental listings on social media. After a group of renters filed a complaint to Toronto police, officers issued an arrest warrant for Ms. Hui, alleging fraud and possession of property obtained by crime under $5,000.
Police also issued a news release on Oct. 25, 2019, asking for public assistance in locating Ms. Hui, labelling her a fugitive. Police media relations officer Caroline de Kloet told The Globe and Mail Ms. Hui still has not been located or arrested.
Ms. Hui could not be reached for comment. Her social-media accounts have also been deactivated.
Mr. Borkowski said apart from using listings on Kijiji and Craigslist and passing a property off as their own, scammers also offer reduced prices on properties they pretend to own in an effort to attract renters searching for affordable housing.
“They end up receiving many deposits from people and will later take down the listing and will be nowhere to be found,” he said.
Scammers exploit the desperation of prospective tenants. Ms. Majid said this is concerning because most renters are looking for affordable place to live, but there are few options in the rental market.
“This means we have a lot of tenants who are desperate to find a place they can live [in], and then become very vulnerable to scams,” she said.
Canada’s housing crisis has exacerbated the situation. The average monthly rent in the Greater Toronto Area (GTA) increased 16.5 per cent, year over year, for all property types in May to $2,327 from $1,998 in May, 2021, according to a June rent report by Bullpen Research and Consulting, a real estate advisory firm.
The report says monthly average rents in the GTA were up by 5.7 per cent in May from April, the largest monthly increase in more than three years. Toronto had the highest average monthly rent for condominium units and apartments at $2,438, an annual increase of 19.8 per cent.
Some factors such as the influx of students and recent graduates moving out of their parents’ homes, in addition to increased immigration demands, high inflation, rising interest rates and reduced housing supply, have contributed to the rapid rise in rents and housing demands, the report added.
“The average condition in the rental market is that the rent prices are very high,” Mr. Borkowski said. “Housing cost is supposed to be 30 per cent of your income but people are spending close to 70 per cent of their income on rent. With the affordability being so tight for most people, it puts them under pressure and in desperate situations and tests where the scams come in.”
More than three years after her experience in the rental market, Ms. Choi and other victims have not yet recovered their money from Ms. Hui.
Ms. Choi said she didn’t do enough background checks but “believed in the best of people” while paying a deposit for the failed apartment. “I wouldn’t make any deposit unless I go to view the place,” she said. “And now I prefer to work with a real estate agent rather than someone else.”
Mr. Borkowski says the best advice for potential renters is to never send a deposit before seeing the place.
“Until you have been inside the place and met the owner and signed some documents and have the keys in your hands, that’s the time you pay a deposit,” he said, adding that when things go wrong, foreign students, for example, are less likely to report to authorities that they have been scammed. “They may just let it go and keep looking elsewhere because it’s part of their search and experiences,” he said.
There is no available data on the number of rental scam victims in a given year. Ms. Majid said her organization advises prospective renters to ask questions and look out for potential red flags before signing papers and making payments.
“If you have a funny feeling that the deal may be too good to be true then it may be a scam,” she said. “If they ask you for large deposits up front before you sign a lease [and] get the keys, or give reasons why they can’t show you the apartment, then they may be a scam.”
Ms. Majid said another red flag is when scammers become persistent and try to come up with ways or excuses for the renter to send the money up front.
“If the pictures of the apartment are very generic, look very familiar or they don’t match the description of the location of the unit, it could be a scam or they might be using photos of other listings and try to pass it off as their own,” she said.
Mr. Borkowski and Ms. Majid said renters should run a check on addresses, phone numbers and the names of landlords or agents that appear on the property listing to verify their authenticity.
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