With rental prices increasing and competition for units growing more fierce, the number of scam listings are also on the rise.
“The increase in rental scams has coincided with the increase in rental costs across the country. Certainly, it's tied to the affordable housing crisis and we often see it more in the late summer months because it's usually targeted to students, international students, people who are coming here from locations outside of Canada or other provinces for work,” said Douglas Kwan, the director of advocacy and legal services at the Advocacy Centre for Tenants Ontario (ATCO), by phone.
“It usually sort of heats up at the end of the summer.”
ATCO operates dozens of legal clinics across Ontario with a focus on providing legal guidance to low-income renters.
Vancouver-based rental services platform liv.rent recently said in the 12 months leading up to June, rental activity on the platform had surged 47 per cent, as reports of suspicious listings had nearly tripled compared to the same time last year.
Similarly, Kijiji Canada said there has been an increase in the number of replies to posts in its housing rentals categories and a “slight increase in the number of rental scam attempts over the busy summer months,” a company spokesperson said in an emailed statement.
Kwan said international students are particularly vulnerable.
“They don't know what the local laws are that are there to protect renters. They're not aware of consumer alerts that are issued by the local municipality or by the police,” he said.
Whenever a renter can’t view the unit or meet the landlord in person, the risk of being scammed is heightened, he added.
“For [scammers], it's a numbers game,” said Joshua Lipton, the director of product and operations at Canadian rental housing service RentBoard, in a phone interview.
“Most people will not fall for this but if, say, 100 people reply [to a scam listing] and they get a one per cent hit rate, that's all [scammers] need to make some money.”
He said RentBoard has been flagging more listings than usual as suspicious.
“We'd rather be safe than sorry. We'd rather refund the user’s money and say, ‘Hey, sorry, please edit your listing or re-list in a way that's more appropriate,’ then risk our renters being scammed,” Lipton said.
“Housing has become obviously a little less affordable as of late -- housing prices were up and then interest rates were up. And when it's harder to buy, people who might have graduated from renting to buying are forced to continue to rent so there's just a larger demand for rentals. And that's obviously juicy for scammers.”
Data from rentals.ca showed the average one-bedroom rent across all types of properties listed on its site rose 9.07 per cent in July year-over-year to $1,639 per month.
For a condo rental, other data showed it’s even more expensive. The average condo rental price in the Greater Toronto Area, for example, hit a record high of $2,533 in the second quarter, according to Urbanation, as demand continued to outstrip supply.
SPOTTING RED FLAGS
There are a number of red flags renters can look for in listings to help determine whether a listing is legitimate -- one of the top tip-offs being below-market prices.
“If it's a rent rate that's too good to be true, oftentimes, it is,” Kwan said.
Other red flags include landlords that ask for rent payment in advance of signing a lease, ask for payments that are against provincial residential laws or if the landlord is not willing to meet in-person and only wants to communicate electronically, he added.
“One tip that we like to offer prospective renters is if you can't be there yourself, ask the landlord to take a video of the unit or have a video meeting. In 2022, many of us are familiar with videoconferencing programs such as Zoom and WhatsApp. You can use those services on your phone to meet with the landlord or the property manager and they can take you through the unit,” Kwan said.
He also suggested trying to use municipal resources such as a property tax search to determine whether the person renting the unit is the actual owner.
Renters can also examine the listing’s photos to catch potential scams, according to RentBoard’s Lipton.
“We also try to see are the photos taken from Google Maps or taken off a real estate site instead of actual photos that have been taken with the phone. Sometimes you can see the watermarks in the bottom corner. So that's another dead giveaway,” he said.
LACK OF RECOURSE
For renters that do fall for a scam, the resources for recouping any stolen money might be limited.
Kwan said a big setback many victims run into is that they have only communicated with the scammer through email, making it harder to find them.
He still suggests taking the complaint to the police though.
“The regular person doesn't have the resources to conduct that investigation. But chances are the local municipality may have already heard about this person. That this has happened multiple occasions -- they might have the means to pursue that person and charge them criminally,” he said.
However, most people, he said, might just want to move on.
“Most people are just simply embarrassed by what happened and they just want to move on and find a place to live. You know, oftentimes they're not preoccupied about what happened in the past because they need to find a place to live to go to school and attend classes at their school or go pursue their work in that town,” Kwan said.
“I can't say how successful people are when they do pursue it. Because as I said before, it does take some resources to do so.”