Introduction to Real Estate Fraud Affecting Property Owners
While discussions about preventing real estate fraud typically focus on those looking to buy or rent a property, property owners themselves are also victims of deceitful schemes that can lead to financial losses and costly litigation.
According to the Mexican Association of Real Estate Property (AMPI), real estate frauds result in losses amounting to approximately 600 million pesos annually for the real estate industry.
Elaborate Fraud Schemes
Melisa Gaitán, Director of Growth and Sales at Homie.mx, explains that these scams in the rental segment are becoming increasingly sophisticated due to gaps in tenant verification processes.
Gaitán highlights that common fraudulent practices include the use of forged identification documents and bank statements, which are difficult to detect. These fraudsters may fake electoral credentials, bank statements, pay stubs, and reference letters to project financial stability and economic reliability.
“The consequences are immediate: delayed or non-existent payments and difficulties in initiating eviction proceedings,” Gaitán comments.
Professional Fraudsters
Another common practice involves tenants occupying the property for unauthorized activities not permitted in their lease, such as running businesses, hosting parties, or even subletting the property without the owner’s consent at high rates.
Homie has also detected individuals with public recognition, like political figures, influencers, or media personalities, who exploit their status to establish trust and subsequently default on payments.
“We have encountered ‘professional’ tenants specializing in renting with the clear intention of not paying. They are familiar with legal processes and timeframes, attempting to extend their stay without cost, which we identify before contract signing, safeguarding the property owner’s assets,” Gaitán explains.
Blind Trust: A Mistake
Gaitán emphasizes that the biggest mistake is trusting the information provided by prospective tenants without verifying their documents and background. The evaluation process should include identity verification, economic solvency analysis, non-criminal background checks, and more.
Currently, digital platforms offer advisory services and specialized technology to detect risks. Renting out a property is not just about selecting a tenant; it’s about ensuring a transparent and mutually trusting relationship.
Key Questions and Answers
- What is the new face of real estate fraud? It involves forgery, non-payment, and legal abuse by tenants exploiting property owners.
- What are common fraudulent practices? These include forged identification documents, bank statements, and projecting financial stability through false credentials.
- Who are these professional fraudsters? They can be individuals with public recognition, like political figures or media personalities, who use their status to deceive property owners.
- What should property owners do to avoid falling victim to real estate fraud? Property owners must thoroughly verify tenant information, including identity, economic solvency, and non-criminal background before entering a rental agreement.
