The National Multifamily Housing Council conducted a survey on tenant fraud and the results were alarming. 93.3% of owners reported experiencing fraud in the past twelve months and 70% said the cases are increasing. Within that group:
- 84.3% have seen applicants falsifying or fabricating pay stubs, employment references or other income documentation
- 80.0% observed prospective renters misrepresenting information on applications
- 70.0% reported identity theft, fraudulent ID documents or use of another individual’s personal information
- 67.1% experienced unauthorized cohabitants, illegal subletting or other actions to evade application or the leasing process
- 62.9% of respondents reported the use of fraudulent checks or other payment methods
- 23.8% of their eviction filings were due to fraudulent applications and subsequent failure to pay rent
- 47.2% of respondents said it varies by jurisdiction, with many of this group calling out Atlanta and markets in Texas and Florida specifically
Respondents were required to write off an average of nearly $4.2 million in bad debt and a quarter (24.5%) of this bad debt, on average, could be attributed to nonpayment of rent due to fraudulent applications.
“There are entire online (tenant) communities that collaborate to discuss fraud,” said Daniel Berlind, who runs Snappt (a company that helps landlords identify fraud) as well as his own real estate firm, Berlind Properties. “There are videos on TikTok that have millions of views, showing how to edit documents. There are entire forums on Reddit that discuss properties and lease-up, what their concessions are and literally give walkthrough guidance to would-be fraudulent applicants and how they can circumvent the process.”
Multifamily Market News 