R.E. companies cheating rental applicants and IRS (apartments, tenants, renters)

[Reno911911]

Recently, I've discovered that several realty companies have their employees acting as if they are sole owners of rental properties when they are actually working for a real estate company LLC. There is some kind of flin flame or fraud happening that people should be made aware of. First, most of them are getting many applicants for properties that they don't own and charging $100 or more for an application fee which is non-refundable. They have access to free credit reports background checks and they can do soft checks as well. But how do you know if they ever really checking you out at all? Do they have to show you proof? Can you ask for proof? And if they don't show you that they ran you under those grounds can you get your money back? Is there a limit at one time for one property can allegedly take applications for? For instance they're showing an apartment like they're showing a house or showing a house rental in one afternoon and taking over 50 applications is that even legal and then put another listing somewhere else and show it another day and take another 50 more. Is that even legal? And not knowing at any time whether any of these people were ever run and they're making soul profit off of taking application fees. I have seen where they have taken over 300 applications I had $100 of Pop. They have told the person oh no we only have a few applicants when they've taken many. So, if they take $100 from every 300 applicants that's $3,000 that they've made in cash non-refundable that they don't report nor do they check more than 3/4 of those applicants. They never disclose when they're running a property that they're working for a real estate company LLC. Is this Fruad? Should they be required to tell you that they're working for a real estate company? When they're advertising where their name is should they tell you that they're working for real estate company? And can you request a copy of your credit report or background check that they allegedly did? And do they ever have to report how many applicants and credit reports they have ran. Just on showing apartments for taking applications they can make a lot of money particularly in Philadelphia for most people give cash for their applications and they are told for one reason or another that they are not fit to rent a property from them. And still never tell them that they're working for real estate company. What do you think should be done and what do you think about what I've just said. Would appreciate some help and feedback. Thank you

[WorldKlas]

This kind of scam has been going on for a long, long time. I remember an old friend, back in the 90’s, who was a fellow Landlord and she told me that everytime she had a vacancy she’d take applications for everyone interested and charge $50…. Saying she “made good money” this way! I find this an outrageous practice and never charge for the initial application. After I review and determine who is my first choice for a future tenant, I send them an invitation to my background verification vendor (in my case Smart Move) and they pay the credit company (Equifax) $40 for the background/credit checks & give permission to share their info with me. Some of the rental websites offer a service like that to people looking for new residences where they pay once and the background info can be shared with permission to Landlords. Maybe the best way to protect yourself is to look into those services.

[carnelian]

These are all very good questions that only lawyers could answer, I think. Or the state's attorney office in each state. Which states do you mean? So many ways to profit without actually breaking laws.
If the applicant already has a recent credit report, that should be sufficient. They are free for you, personally. I must say that in all my searching, I am not aware of this happening, but I'd warn renters not to apply ahead of time...it is naive and a waste of money.

[oregonwoodsmoke]

So how is it that you have a source for all of these facts? They sound like something you have just made up. Or you saw it on someone's blog and they just made it up.


First thing is that no one gets to run a credit report on their applicants for free. In fact, no one gets to run a credit report of any kind for free. If you are using some sort of free credit reporting service for yourself on some website, you are paying for that in some way. If you really thing "free" stuff is free, you are mistaken.



How do you know how many applications are taken? Have you been standing there counting them?


Federal law pretty much says that anyone who wants to apply must be allowed to apply. You don't like fair housing laws, write to your Congressman and complain.


There is a housing shortage. Tenants who have messed up their rental history, their legal record, or their credit are going to have a difficult time finding a place to live because there are better applicants out there. That's not really the fault of the property management companies.


Also, how is it you know that all of those management companies are not declaring all those application fees on their taxes? Are you the accountant who is doing the books for every manangement company in your state?

[Flamingo13]

Sounds like OP hasn't been able to get approved?

[SJ196]

I am sure it happens with a few landlords. They also use it as a money making opportunity.
But not anything you can do. Unless your state makes a new law.
My state started one last year limiting app fees and tied to cost.

[spencgr]

Originally Posted by Reno911911

So, if they take $100 from every 300 applicants that's $3,000 that they've made in cash

Well,no, it's not $3k, it's $30k.