Employing an estate agent to do the heavy lifting has been a time-honoured way of ensuring that the tenants from hell don’t end up renting your investment unit, but some due diligence on the owner’s part won’t be wasted.
If that sounds like an overly finicky approach, look at the eye-watering cases here when estate agents were less than diligent when it came to dotting the i’s and crossing the t’s.
It pays to have a closer look at your tenants before signing a lease, given the pitfalls in simply relying on other people’s checks.
Cigarette smugglers
Around March 2019, an unidentified man from Malaysia called an estate agent to express interest in a warehouse up for lease. The man claimed that he was an employee of a furniture company that wanted to store its products there.
He offered to pay a monthly rent of $2,200 and sent a photograph of a Malaysian identity card that purportedly belonged to his boss, who would be the official tenant.
A few days later, another man visited the unit and offered to sign the agreement, on behalf of the boss, after paying the deposit. When the agent asked for his passport to verify his identity, the man said he had forgotten to bring it with him.
The agent did not pursue the matter and proceeded to seal the deal. During the whole saga he did not meet the boss, who was the tenant, or check his background to verify that he was indeed the owner of a furniture company.
In September that year, the Singapore Customs raided the unit and seized smuggled cigarettes as well as arrested four men.
The agent was suspended for four months and ordered to pay $4,500 in penalties and legal costs for failing to conduct checks on the tenant. The only silver lining was that the landlord did not suffer any loss, as the smugglers were up-to-date in paying the rent.
Fake students
Two foreign students wanted to rent an apartment being managed by an estate agent, as the owner was living overseas. The agent did not meet the students and had only received pictures of their passports and student passes from another agent representing them.
Even when she eventually met one of them at the apartment, in August 2020, she didn’t verify the identity of the woman, who was wearing a mask and a hat. She instead proceeded to close the deal by showing the woman the apartment and the household list, which the tenant signed off without indicating her name.
The rental payments and tenancy agreement were later sent online, and the agent never met the tenants again.
In July 2021, the police raided the apartment and arrested three women for conducting vice activities there. Further checks showed that those involved had stolen and misused genuine passes belonging to two innocent students to rent the apartment.
The agent could have exposed the ruse had she conducted a simple check of the woman’s identity when they met at the apartment. Her lapse cost her $6,000 in penalties and costs.
‘Mafia boss’
This sordid tale involved a truly unprofessional real estate agent who was hell-bent on making his commission from the rental, even though he knew that the tenant would be using the property for vice activity.
The tell-tale signs were aplenty from the word go: he was told the tenancy agreement would be put in the name of an unidentified “boss” but that he would be taking instructions from someone else working for this boss.
The agent was told two women would be staying at the property, and he was given photos showing them in skimpy outfits and suggestive poses. One of the pictures even had a logo and website that promoted sexual services.
To cap it all, the agent was assured there wouldn’t be any problem because “all the tracks were clean” as the person renting the unit would be the “boss”.
But trouble came soon after when the cops raided the unit and found drug-related items there.
The agent was suspended for three months and ordered to pay $4,000 in penalties and costs.
It was fortunate that the landlords in these cases were unaware of the illegal deeds because they could otherwise have faced investigation for facilitating criminal activities.
Hence it pays to scrutinise your tenants because dodgy tenants invariably bring costs at some point and the value of your property can drop if it has a dingy past.
“Source:[The risk of renting your homes to criminals and dubious tenants] © Singapore Press Holdings Limited. Permission required for reproduction”
