What You Need To Know About Rental Scams In South Africa
Rental scams are unfortunately on the rise in South Africa.
A rental scam occurs when a scammer, posing as a landlord or an estate agent, attempts to obtain money from a potential tenant for a rental property they do not lawfully own or have the authority to market.
Online rental fraud specifically involves scammers posting fake rental listings or hijacking legitimate ones to deceive prospective renters into paying deposits or rent for non-existed properties.
Emotionally driven, enthusiastic tenants, excited about finding the ideal rental property, are often more susceptible to fraudulent activity. Time pressure also plays a significant role. Tenants, often eager to a home within a limited time frame, can become vulnerable targets for criminals. This urgency is heightened by various factors, such as job opportunities or personal circumstances, which may increase their desperation to find accommodation and potentially diminish their caution.
- Rental Scam Examples
Phantom rentals: The scammer will often place an advertisement for a property with pictures copied from other sources. The property itself may be real or fictitious. These properties are often priced below market value to quickly attract victims. Once contact is made, the scammer will ask for a deposit or upfront rent, typically disappearing after receiving payment.
Hijacked Listings: Fraudsters take over existing rental postings, often from legitimate landlords, and modify contact information. They falsely claim to be the rightful owners and request advance payments from prospective tenants, only for the real owner to deny any involvement later.
Illegal Subletting: The scammers lease a property from the landlord. Within a month or two they falsely claim to be leaving temporarily and that a friend or relative will be staying to look after the property. In reality, the tenant has illegally sublet the property to the occupant. No further rent is paid to the landlord, and the original tenant becomes untraceable. The occupant is often also a victim of this scam.
Fake Estate Agency: Scammers pose as rental agents or property managers, demanding fees for services such as background checks or property viewings. After receiving payment, the supposed agent either provides false rental information or vanishes entirely.
- How to Spot Legitimate Rental Listings
- Search on Reputable Property Portals
Use well-known and reputable rental platforms that offer security measures, such as background checks on landlords and estate agencies, and verify listings. Consider using registered estate agency websites in South Africa and well-known property portals like Myproperty, Immoafrica, Private Property, Property 24 and IOL Property.
- Detailed Property Description
A legitimate rental listing typically includes a comprehensive description of the property. This includes the number of bedrooms, bathrooms, square footage, and any additional features such as parking spaces, yard size, and appliances. A more detailed description generally indicates a more authentic listing.
- Multiple Clear and Consistent Photos
Authentic rental listings usually feature several high-quality images of the property. The photos should provide a clear view of each room, and the property’s layout should remain consistent across different pictures. Be cautious if the listing includes only a single image or if the images appear generic.
- Responsive and Professional Communication
A legitimate landlord or property manager will communicate professionally and respond to enquiries promptly. They will be willing to discuss lease terms, provide documentation, and schedule property viewings. If the landlord is evasive or unresponsive, it could be a cause for concern.
- Verified Contact Information
You should easily verify the contact information provided in the listing. Independently look up the property management company or landlord’s contact details and ensure they match what is listed. Scammers often use fake names and numbers, making it difficult to reach them through official channels.
If the estate agency lacks a local office, contact their head office to confirm that the rental agent and branch are legitimate parts of the agency. A reputable agency will readily provide tenants with all necessary information about the rental agent and their rental listings.
- Proper Lease Agreement / Other Documentation
Legitimate landlords will always provide a formal lease agreement. This legal document outlines the responsibilities of both the landlord and tenant, including rent payment terms, maintenance duties, and the security deposit. Proceed with a rental only after signing a lease, as this document offers legal protection in case of disputes.
Avoid trusting landlords who claims a lease agreement is unnecessary. Landlords who resist entering into a lease agreement may not have one to offer in the first place.
Estate agents are not permitted to conclude rental leases unless they have provided tenants with a Landlord (Owner) Property Condition Report. If the “estate agent” fails to provide this report to the prospective tenant, it suggests they may not possess a valid FFC (Fidelity Fund Certificate), and may not operating according to the PPRA Code of Conduct.
Tenants should always request confirmation from landlords that they possess valid Certificate of Compliance (COCs) for the rental property, particularly electrical and gas compliance certificates, as these are crucial for safety. Request copies of the COC certificates, as you would likely need them for insurance purposes.
- How to Avoid Rental Scams
- Work with a registered Property Practitioner (Estate Agent).
You can verify the status of both the agent and the agency on the Property Practitioners Regulatory Authority (PPRA) website. Search for a Property Practitioner" using the following link : https://theppra.org.za/agent_agency_search
By following these precautions and consulting professionals, tenants and landlords can reduce the risk of falling victim to residential property scams. Unfortunately, there is no foolproof way to completely avoid rental scams. However, potential tenants can increase their protection by paying close attention to warning signs. It is crucial to deal with rental agents from a reputable agency that you know and trust.
- Always Meet the Agent or Landlord in Person
Insist on meeting with the agent at their office or the landlord/seller in person before viewing the property to verify their identity. Investigate any rental agency that lacks a physical office, a landline phone, or uses a Gmail account for business purposes. Verify the estate agency’s business address on Google Maps – reputable estate agencies maintain active Google Maps account. Research the estate agent online before the meeting, especially if the company’s website lacks photos of their member estate agents.
- Always inspect the property in person.
Conduct thorough research to verify the legitimacy of the property and the landlord. Does the property exist on Google Maps? Is the landlord willing to provide identification documentation for verification, or at least a link to their online profiles (LinkedIn and Facebook).
If the supposed landlord claims to be unavailable to show the property in person due to travel or other reasons, it is often a scam. Legitimate landlords will arrange for trusted contacts to handle property viewings in their absence.
Scammers often only show the outside of a property, claiming the owner is not home.
- Request Proof of Ownership (if unsure).
A copy of the latest municipal rates & taxes bill or the Body Corporate’s latest levy bill can be used to verify ownership.
- Beware of Requests for Personal Information Without Verification
Scammers may request sensitive personal information, such as your ID number or bank details, under the guise of performing a background check. Always verify the legitimacy of the rental agency or landlord before sharing personal data.
- Beware of Overly Eager Landlords or Estate Agents Who Don’t Follow Proper Procedures
Managing property agencies, like CCH, offer protection to tenants by placing rental deposits in trust accounts and partnering with regulated providers such as PayProp. CCH also utilise expert verification tools such as TPN (Tenant Profile Network) to verify tenants, adding an extra layer of security to their services. Beware of landlords or rental agents who are willing to sign contracts without following the correct protocols.
- Beware of over-eager estate agents who do not perform a proper FICA
As per the FIC Act, Estate Agents and Property Practitioners are Accountable Institutions and cannot establish a business relationship or enter into single transactions with clients without verifying their identities, current residential addresses, and source of income (proof of funds).
However, legitimate agents will never request sensitive personal information upfront like ID numbers or banking information, without a formal rental agreement in place.
- Beware of Generic Application Forms with Missing Information
The banking details for an estate agent should never be an account for an individual – but must be that of a registered company (whose trading name can also be checked on the PPRA website).
- Be Wary of Deals That Seem Too Good to Be True.
Is the rental price incredibly low for the value you would be receiving – i.e. far cheaper than the average for the area and type or size of property?
While it is common for tenants to pay rent in advance, landlords should be cautious of scammers who pay a few months upfront and then disappear.
Tenants offering to pay a higher rental could also be a red flag.
- Be Wary of Excessive Deposit Amounts.
Deposits are always between 1.5 and 2 times the monthly rental amount.
- Always Have a Legal Representative Review the Lease Agreement (if it is not through a recognised, registered agent).
Consult legal professionals and bona fide property experts to ensure all documentation is legitimate and accurate. They have experience checking these kinds of documents and can identify discrepancies.
Ensure that both you and the landlord signs the lease agreement.
- Always meet the Landlord or Estate Agent (Property Practitioner) & View the Property before Transferring Money.
If the landlord insists on a deposit before a viewing, consider it a major red flag.
Never pay money upfront – legitimate agents and landlords will not require upfront payments other than those required to draw up your lease and complete your credit checks. If a “landlord or estate agent” wants you to pay a deposit before seeing the property, walk away.
- Ensure Your Deposit is Paid into a Properly Accredited Trust Account
Be cautious when providing personal or financial information online and use secure platforms for transactions. Always guard your private and banking information and never transfer money unless you have personally verified the source of the email, the nature of the request, and most importantly, the bank details provided. Buyers should never part with money or pay a deposit unless they have verified the request.
• Beware of Facebook Marketplace
If the “estate agent” only have one listing on Facebook Marketplace and provides no clear indication of their professional identity as an estate agent, investigate them thoroughly. This is especially important if they do not have their own website and if you cannot find the rental property on established property portals such as Private Property and Property 24.
Even if the property is listed on a reputable property portal, it could still be a rental scam, so always maintain a high level of caution. Rental scammers are resourceful and often manage to get their listings onto well-known property websites. Trust your instincts. If at any stage of the process you feel something is wrong, you are pressured unduly, or information is withheld, walk away.
- Uncommon or Untraceable Payment Methods:
Only use traceable payment methods like credit cards or EFT (Electronic Funds Transfer). Avoid prepaid cards or cryptocurrency, as these are untraceable and irrecoverable once the money is sent.
- Steps to Take if You Are a Victim of Online Rental Fraud
If you have fallen victim to a rental scam, immediate action is crucial. Here’s what you should do:
- Report the Scam to the Police
File a report with the SA Police and provide all transaction details, including emails, receipts, and any other correspondence with the scammer.
- Contact Your Bank or Payment Provider
If you made a payment via credit card or bank transfer, contact your bank immediately to inquire about stopping or reversing the payment.
- Warn Others
Spread the word about the scam. Post reviews or reports on rental listing sites, community forums, and social media to warn others and help prevent further victims.
- Consider Legal Action
In some cases, it may be possible to pursue legal action against the scammer. While this is often difficult due to the anonymous nature of the crime, consulting with a lawyer can help you explore your options.
By following these tips, you can significantly reduce your risk of becoming a victim of a residential property scam. Most importantly, trust your instincts and walk away if something feels suspicious.