Fraudulent lease applications, ghost residents, and the need for evictions are increasing
Are You Properly Vetting Your Apartment’s Lease Applications?
🤕 Problems & symptoms of not properly vetting lease applicants
Fraudulent lease applications, ghost residents, and the need for evictions are increasing.
When you’re so focused on occupying units, it’s easy to begin ignoring minor things, like, ‘Are there going to be any potential issues with this resident?’Â
That’s why evaluating the ‘qualified’ stage of your marketing and leasing chain is critical to verify that your community accepts lease applications from individuals who abide by their financial and neighborly obligations.
Neglecting basic tenant screening procedures in this day and age, where there is more technology available for someone to steal another’s identity or manipulate legal documents when applying, could cause serious issues down the road for your apartment community.Â
In a January 2024 report from the National Multifamily Housing Council, a staggering 70.7% of rental housing providers surveyed reported increases in fraudulent applications and payments, as well as fraudulent documentation of financial statements and identities in the past 12 months.Â
There’s also a rise in ‘ghost’ residents, or individuals who lease a unit, pay the deposit and first month’s rent to guarantee acceptance to the community, but then stop paying rent while staying as long as possible until leaving without notice for you to never hear from or find again without difficulty.
These issues, of course, contribute to the rise of necessary evictions alongside those suffering through economic challenges.
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🤦🏼‍♂️ Common mistakes that put your apartments at higher risk for fraud
Waiving deposits or application fees as concessions.
When you’re choosing not to collect any money up-front and making it basically free to move into your apartment community, you’re putting things on a tee for fraudulent actors.
Not thoroughly vetting residents.
It’s also problematic to forego or ignore any rigid criminal background or credit checks for residents. Again, with more means for document manipulation, you must verify that things are in good standing to avoid a problem.
🙌🏼 Best practices to protect your apartmentsÂ
Keep application fees and deposits in place.
It’s the simplest way to ensure no one takes advantage of your apartment community in the application process.Â
If you’re trying to increase occupancy, a better alternative than waiving deposit or application fees is offering them back as a credit on rent after someone moves in.Â
This way, the tenant will be more qualified to pay their monthly rent consistently in the future because they were required to pay an application fee, deposit, and first month’s rent—all serious financial commitments before moving into your community.
Apply new tech to application screening.
Knowing that fraudulent applications are rising, you must invest in tools to help you vet each applicant more thoroughly to protect your community.Â
It has reached the point where no community has the capacity or capability to diagnose fraud accurately.
Source: RentVision
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