Fake landlord scam prompts warning from Tenancy Tribunal

A scammer pretending to be a property manager stole $2750 from a couple who thought they were securing a rental they visited, after talking with him on social media.

The elaborate scam saw the couple, who were not named in the recently-released Tenancy Tribunal ruling, make contact with property manager “Harry Smith” about a listing for a rental they’d seen on Trade Me.

Smith then communicated with them through Facebook messenger and organised a time for them to view the property the next day.

However, when the wife arrived - with her husband connected via video call so he could see it too - there was a different property manager who showed them around the rental. The couple didn’t think there was anything unusual about this at the time.

After the viewing, Smith contacted them via Facebook and asked if they wanted to sign an agreement.

He then sent them a tenancy agreement which was signed by the supposed landlord “L M Tutty”. The couple signed the agreement before depositing a $2200 bond and $550 rent into an account Smith provided.

The couple continued to communicate with Smith through Facebook where he claimed he hadn’t received the money before then saying that he’d made a mistake with the account number.

The couple tried to recover the money they’d transferred through their bank but there was no money in the account to return.

Smith kept up the pretence of making arrangements for the applicants to move into the property while Tutty delayed matters by advising that his wife was ill, before ultimately providing an alternate bank account number for the applicants to pay yet another bond.

The couple refused to make another payment and when they expressed concerns about what was going on Smith blocked them on Facebook and Tutty ceased contact by email.

When they contacted the property manager who had shown them around the rental they were told that she had never heard of Smith nor Tutty and by this stage the place had been rented to someone else.

The couple then went to the Tenancy Tribunal to try and recover their money but adjudicator Melissa Allan said the tribunal didn’t have jurisdiction because the situation wasn’t actually a tenancy.

“Although the applicants have signed a ‘tenancy agreement’ for the property they viewed, the purported landlord had no association whatsoever with the property and no right or authority to grant a tenancy,” Allan said.

“Although the Tribunal does not have jurisdiction to determine this matter I have set out the facts in some detail in the hope that it might prevent other prospective tenants falling victim to this type of scam.”

Allan also noted that the same scam had been used on a couple in Christchurch recently and recommended that the applicants take their claim to the police before dismissing their claim before the tribunal.

Renter advocate group Renters United says the couple’s plight highlights how the rental market in New Zealand operates under very few checks and balances.

“It’s essentially the wild west out there,” its spokesperson Luke Somervell told NZME.

“Unfortunately it doesn’t surprise me that this has happened because we don’t have a landlord registry, nor a warrant of fitness for homes... it’s a situation that’s ripe for the picking for scammers.”

Somervelle said this incident, and similar scams like it, could be avoided with the introduction of a public register of the country’s landlords - something Renters United and the Green Party has been wanting for years.

The Residential Property Managers Bill which passed its first reading and is currently before select committee would provide a register of property managers if voted in, but not landlords.

Property ownership records are housed by Land Information New Zealand but accessing this database requires a licence. A recent vigilante attempt to publish a searchable list of the country’s homeowners using data from LINIZ was shut down by the Privacy Commissioner.

“As it stands I don’t know how the average person would be able to verify that a landlord is who they say they are,” Somervell said.

“Really we’ve left the market open for scammers like this to take advantage of people.”

Last year the Real Estate Institute of New Zealand said that similar scams were becoming increasingly common and advised both property managers and renters alike to watch out.

Its chief executive Jen Baird sad in a statement to NZME that a public register would help renters to quickly verify if the property manager they were dealing with was legitimate before they entered into a tenancy agreement.

“REINZ recommends renters verify the identity of the property manager; i.e. look up the company online, look at the staff and call the actual office number to verify the property they are inquiring about is being managed by the office or person in the advertising,” Baird said.

“Researching publicly available ownership to confirm the landlord if advertised privately is another safeguard before entering into any legal agreement or exchanging money.”

REINZ’s cyber-security awareness partner Phriendly Phishing’s advice for prospective tenants:

1. Verify the identity of the property manager or owner: Be cautious of people claiming to be property managers or landlords on social media. These platforms can make it easy for scammers to impersonate legitimate entities. If you are searching for property on social media, it is a wise idea to independently look up the official contact information for the property management company they claim to represent and contact them through that official channel to verify their identity. Never rely solely on the contact information provided by the person on social media.

2. Use official channels of communication: Where possible, use official property listing websites, property management company websites, or official office numbers to make inquiries or schedule viewings. Communicating or closing deals through social media platforms or personal email addresses can be a red flag for potential scams.

3. Beware of unusually low rent prices: If the rental price seems too good to be true, it probably is. Scammers often lure victims in with incredible deals. Do some research on what a typical rental price should be in the local market. If you see the same property advertised with two different prices, take a closer look at whose listing it really is.

4. Do not pay money upfront: This includes security deposits, rent, or other fees. If you are emailed a link to pay your deposit, make sure you scan for S.C.A.M — scrutinise the sender, content, and action needed and then manage the situation once you have ascertained it is legitimate or report if it is a scam.

5. Ensure legal documents are provided: Make sure all agreements are in writing and understand all terms and conditions before signing. A legitimate landlord or property manager should provide a formal tenancy agreement. Be suspicious if they are reluctant or refuse to do so. Again, do not open any attachments or links in email communications, and insist on an in-person meeting to sign a lease. Be careful here though too — scammers are generating official tenancy agreements using the MBIE website. Make sure that the person with whom you are dealing is the owner or authorised to rent the property, it said.

Jeremy Wilkinson is an Open Justice reporter based in Manawatū covering courts and justice issues with an interest in tribunals. He has been a journalist for nearly a decade and has worked for NZME since 2022.