Here's How Immigrants and Students Can Spot and Avoid Rental Scams

The two priorities of newcomers arriving in Canada are finding accommodation to rent and a job.

In terms of renting, fortunately, most landlords, property management companies and dedicated rental websites in this country are reputable and honest.

Rental markets in Canada are tightening.

However, as rental markets tighten, rent prices climb. Vacancy rates fall, and the scramble to find rentals (both short-term and long-term) becomes increasingly competitive, particularly in Gateway cities such as Toronto and Vancouver, where one-bedroom apartments rent for about $2,500 a month. 

This gives rise to rental scams, and some disreputable landlords will deceive you if you are not careful and prepared.

 And, as experts point out, rental scams increasingly target newcomers and international students.

More scams occur during summer and fall.

During the summer and fall months, scams increase, with international students unfamiliar with the ins and outs of Canadian housing the prime targets.  

RELATED STORY: Our latest Housing Newsletter for Newcomers to Canada and International Students

"This is a time when these scams are expected to pick up," Chris Borkowski, a broker with Realty Executives Group, a real estate company in Thornhill, Ont., told  Patrick Egwu of the Globe and Mail's.

 

In the wake of a scam involving fraudulent listings on Kijiji, the Toronto Police Service advised potential renters to ask for identification and to try and get a picture of the landlord. 

But "you have to be very careful," cautions Constable David Hopkinson.

Summer is typically the busy season for scammers. 

Rental scamming is becoming more prevalent

It's important to be suspicious of listings that emphasize urgency and are in a hurry to secure your deposit. Blurry photos and obscured address details should also raise alarms.

Here's some advice to help newcomers and international students recognize scammers and their methods and take steps to ensure they have a successful first home rental experience in Canada.

Asking for cash is always a red flag

So let's get started. The BEST way to protect yourself is to not deal in cash.

 It's that simple. 

Cash-only deals are the No. 1 scam and are usually a tip-off that something is wrong. Cash cannot be tracked. Avoid dealing in hard currency if you can. The same goes for wire transfers "upfront."

 

Toronto police recently arrested a man who advertised a room for rent at 1818 Weston Road, near Lawrence Avenue West, on Facebook between January and May 2023. The man allegedly posed as the owner and showed the room to potential renters, telling victims they had to pay an $800 deposit to secure the move-in date. The man used e-transfers, certified cheques, or cash.

After paying, the victims never heard from the man again or got their money back. Police believe there are more victims. 

Use platforms that verify landlords

"If you do contact a landlord and they request that you send money right away, that's a red flag. You want to at least meet the landlord or tour the property," Rentals.ca spokesperson Giacomo Ladas told CTV News Toronto.

Always use a rental platform that uses a verification program for landlords.

RELATED STORY: Here is why house-sharing is a good rental option for newcomers

Next, always sign a written lease. A hard copy is always preferable, but e-leases are becoming common nowadays. 

Oral agreements, another tool scammers use, are definitely to be avoided.

Watch for changes to the rental agreement

 If possible, ensure that the landlord is present when you both sign and that you and the landlord each sign and get a copy.

Also, make sure the rental price offered verbally by the landlord matches the rental price on the lease.

Dishonest landlords will often try to quietly change the rental agreement numbers.

Find out who actually owns the apartment

Another critical safeguard is determining who owns the home or apartment building before signing the lease and whether you're dealing with someone with the authority to rent the unit. 

The property owner's name (individual or company) must be on the lease document. If it's not, walk away.

 Do not accept anyone's offer to "send the documents to you later." That's a warning sign.

 

Anyone trying to pose as a trustee or claim to be working on behalf of the owner should have the corresponding documents proving this fact.

This also applies to situations where the documents state that this house has two owners. In this case, you should ask for written confirmation from the second owner that she is aware of the rental process and approves the rental agreement.

Try to avoid subleasing

Fourth, avoid subleasing. Sub-leasing, while common, can be the shakiest and the most dangerous thing you can get yourself into. Checking whether the original tenant has the right to sub-lease the place is unbelievably hard, and you can never be sure that everything is all right and that you're not becoming a part of a rental scam.

The most exciting thing about subleasing is that neither you nor the original tenant can feel secure about it due to the original agreement. The landlord can evict both of you if the original contract forbids the sublease.

The best way to avoid problems with the subleasing is to talk to the original tenant and work with her to add your name to the original agreement.

 

Make sure you meet the landlord in person

Fifth on our list of spotting a scam is meeting the landlord in person, even if you've used a site like rentalsfornewcomers.com and rented your place before arriving in Canada.

Even if the entire transaction was done online, which is becoming increasingly popular and familiar, and your tour was virtual, once you arrive in Canada, schedule a meeting with the actual landlord.

Before renting that first apartment, do your research. This can't be stressed enough.

The in-person transaction isn't as required as it used to be. We're just constantly transacting online, making us more likely to be targeted for a fraud attempt

Any potential scammer landlord will avoid a chance to show you a place and skip any kind of real interaction, including the property tours and agreement signing that a legitimate landlord usually prefers.

Rental fraud grows more sophisticated

"Rental scams do not discriminate," Rachel Jolicoeur, Fraud Prevention and Strategy Director with Interac, told  Zakiya Kassam of storeys.com. 

Jolicoeur links increasingly sophisticated cases of rental fraud to the all-consuming and rapidly expanding digital landscape. 

"The in-person transaction isn't as required as it used to be. We're just constantly transacting online, making us more likely to be targeted for a fraud attempt."

Be wary of the middlemen

Sixth, rental scammers abound on sites such as Craigslist and Kijiji (check out the study' Understanding Craigslist Rental Scams'). Typically, they pose a "middleman" authorized to rent the place to you. The place is usually accurate, but they can't access it. They find this place on another real-estate platform, take the pictures and description, and place all this info into the Craigslist ad. They insist on collecting a rental payment, security deposit and other payments that can be part of a rental agreement,  and then they disappear with your money.

Before renting that first apartment, do your research. This can't be stressed enough. Do basic research on the Internet, Google the landlord and property management company or rental website, and check e-mails, names, property addresses, etc., looking for controversies, criminal charges, or scam warnings.

If a real estate company represents this landlord, you should Google feedback and reviews regarding their professionalism, reputation, and credibility. If they are reasonable, testimonials from former clients and peers should be available.

Know the median rental price in your city

Also, as part of your required research, investigate the median rental price in the city or location where you're trying to rent. This should give you a basic understanding of what kind of price is reasonable for the particular place and neighbourhood you're looking at. Check out Rentals.ca or Rentsync, etc. These companies issue monthly reports on rent prices across Canada. Once you have this info, be suspicious of any rental price below the median. It could be a scam and a warning (too good to be confirmed) that something isn't right.

If you can, speak with current or past tenants about the landlord.

Only rent from a platform like rentalsfornewcomers.com, which is transparent in all dealings and verifies its users (landlords and property management companies). If it doesn't, move on.

 

If you can, speak with current or past tenants about the landlord. Also, many landlords today will provide references or online testimonials about their property and stewardship.

If you are being rushed, beware!

Finally, if the landlord rushes to sign you up, that's a warning sign. Responsible, legitimate landlords will definitely want to run a background check and see their prospects' credit reports. This protects both the landlord and the tenant.

Renting is so competitive in major Canadian cities that landlords can be picky, so newcomers must arrive prepared for a meeting.

If the landlord doesn't care about your background, beware. Things might be shady. 

For example, police in Toronto Police Services issued an alert about a downtown condo rental scam. 

Here's how it worked:  the scammers placed rental advertisements on Kijiji for rental units at two buildings on York St.

The suspect acted as an agent of the property owner

"The suspect and victim correspond via phone and text to discuss the property," the police said. "The suspect meets with the victim at the rental location. The victim is shown a property, and the suspect acts as an agent of the property owner."

Here's the scam: the suspect is a short-term renter who only booked the unit temporarily to access the property!

"The victim signs what they believe to be a valid rental agreement and then sends a deposit via an electronic money transfer. Once the money transfer is received, the suspect no longer returns calls or messages and blocks the victim's phone number," said the police.

Goodbye, money!

The popular scam used on international students

This is also a popular scam used on international students to Canada who are often in a hurry and desperate to rent an apartment or condo. 

Summer is a prime time for scams targeting international (and domestic) students. 

Dania Majid, a lawyer with the Advocacy Centre for Tenants Ontario, a community legal clinic that protects low-income tenants and advocates for affordable housing, told The Globe and Mail that scammers "attention usually turns to international students around this time, especially since they don't know how the rental market here works."

Rob Watt, the CEO of The DMS Group, says one way for international students to avoid scams is to contact their school's off-campus housing office. 

"Most of the colleges and universities have an off-campus housing office or at least somebody responsible for that," said Watt.  "And through that office, you can connect yourself with landlords and property management organizations that are accredited and recommended by that school. That's the first thing I would do."

If you have been scammed, here's what you can do:

·       Call the police and give them all the details you have on the deal you had and the person that turned out to be a scammer

·       Contact your legal advisor or a lawyer who handles these issues

·       Post a negative review on this ad to make sure that no one else will fall into this trap

Be sure to compare rent prices

Finally, here's some additional advice from Real Estate Property Management Services on how to avoid rental scams:

·       Never transfer money to someone you haven't met; never pay a deposit without seeing the rental unit first.

·       If you have suspicions about a possible landlord or property manager, go with your instincts.

·       Take time to compare prices in the market.

·       A written lease should always be signed before paying the security deposit and rent.

Only rent after seeing the rental unit

Having a chance to look at the place you plan to rent should be your number one priority. If this requirement is not met, you can skip that landlord.

RELATED STORY: Why renting through a realtor is a smart strategy for newcomers

Any landlord planning to rent out the place is ready to show it, so you should confirm that it looks like the pictures he provided on the website. Schedule the open house visit and evaluate the condition of the real property.

This also applies to those trying to rent a place in another city while working on the relocation process. Even in this situation, you should ensure that your friend, family member, or trustee visits the landlord's unit and looks at it.

Know your rights as a tenant

Even though many scammers actually have access to the property, insisting on a house tour is a massive step towards a more transparent and happy first rental process in Canada.

Remember, renters have rights. Each province and territory has landlord-tenant legislation, and the rules and regulations vary by province. For example, the legislation in Ontario, Canada's largest province, is called the Residential Tenancies Act. This legislation protects renters.

Spotting short-term rental scams

Again, in short-term rental scams, the primary way scammers work is to pose as a legitimate landlord or property agent and get you to sign an agreement and send them money. 

 

 

Here's the type of short-term rental scam that newcomers to Canada and international students need to guard against: 

·       Bogus Listing scam - This is most common on sites like Facebook Marketplace, Instagram, Craigslist (and even Airbnb and VRBO). If the deal seems too good to be true, it probably is.

·       Deposit scam - If you're asked to make a short-term rental deposit directly to the owner, especially using a third-party app, a wire transfer, or in a way that is NOT from the website you're booking on, that owner may be a scammer. They'll take your deposit, and you'll never hear from them again.

·       Clickbait Listing scam - The ad for the short-term rental looks great online, but when you click, an inferior rental shows up. Also, beware of the double-booking scam: that's where the owner double books the same rental and then forces one party to take an inferior rental for the same price.

·       Price Change scam - You book a rental for one price, and when you show up...surprise! It costs more. Ensure you have a firm agreement with a firm price (and no last-minute hidden fees).

Avoid those scams, and hopefully, your first long-term or short-term rental will always be your favourite rental.

ACTION PLAN FOR NEWCOMERS:

• Research median rental prices in the city.
• Verify the landlord is the property owner.
• Always sign a written lease and get a copy.
• Meet the landlord in person before signing.
• Never deal in cash.
• Report any scams to the police and a lawyer.
• Register for this helpful FREE webinar on Accommodation in Canada.
• Register for this helpful FREE webinar on Using a Real Estate Agent to Find that First Rental.
• Register for this helpful FREE webinar on International Students and Renting in Canada

 

You might want to check out: 

• Here are the cheapest cities for rent prices in Canada
• Why international students are so crucial to Canada's future
• Here's how to register at Rentals for Newcomers. It's easy and FREE!

If you have a question, please email us at rentals@prepareforcanada.com

Steve Tustin is the Editor for Rentals for Newcomers and a contributing editor for Prepare for Canada. He is also the former managing editor of Storeys.com and a former senior editor at the Globe and Mail and the Toronto Star.

*Rentals for Newcomers used no AI-generated content in the writing of this story, and all sources are cited and credited where possible.

© Rentals for Newcomers 2024