Rental fraud is becoming a big problem in India, affecting the Indian housing market. The rise in online rental services and digital modes of payment is making rental scams more prevalent and harmful, affecting both tenants as well as landlords.
While senior citizens, due to limited technical knowledge, are often easy targets, young individuals may also fall prey to rental scams. So, whether you are a tenant or a landlord, young or old, it is important to stay a step ahead of such scammers.
Some common rental frauds in India include the following.
- Fake listings
- Advanced payment scams
- Rental agreement fraud
- Online frauds and QR code scams
- Tenants posing as government officials
- Scammers posing as landlords
Let’s discuss some of the most common rental scams in India. We will also touch base on the key warning signs and provide guidance on steps to be taken if you’ve fallen prey to rental scams.
Common rental scams faced by landlords in India
Tenants impersonating government official
Tenants impersonating government officials is one of the commonly used tactics by scammers. In most cases, scammers may introduce themselves as army officials and tell you that they are relocating to your city. To make their story convincing, they may present fake documents, such as a government ID card, Aadhaar card, PAN card, etc.
They may say that they must shift immediately, and they are willing to make an advance payment. Further, they may send you a link or a QR code instructing you to click or scan it to receive payment. It is suggested not to click any such link or scan any QR code. Report and block the number from all sources.
Fabricated background information/personal details
Scammers may submit fabricated documents, such as fake Aadhar cards, PAN cards, or government IDs to appear legitimate. Over the period, it has been seen that landlords never verify the documents leading to unfortunate incidents. The same forgery can be observed in letters of employment or proof of permanent address.
Subletting rented premises
Subletting the rental premises is a common rental scam in India that targets landlords. Most rental agreements in India prohibit subletting the rental property in any form. Once the scammer has control of the property, he may illegally sublet it to other tenants without the landlord’s permission. The scammer collects rent from subtenants, often charging higher than the original rent of the property.
Once they have collected enough amount from the subtenant, the scammer disappears, leaving both the owner and the subtenant in trouble.
Not paying rent or maintenance
Not paying the rent or maintenance on time is an important alarming sign that the tenant may be a scammer. If your tenant keeps on making excuses or keeps on delaying rents, you should take the necessary action, and send a legal notice to the tenant. However, avoid any unlawful actions that could lead you to legal complications.
Also read: What to do if your tenant is not paying the rent?
Payment related frauds
Many cases display a common practice among scammers making fraudulent payments. Using an online mode of transaction, such as QR code, payment links, or OTP, a scammer can collect and run off with your money. Scammers will pressure landlords to click on links or scan the QR codes to receive payment. Landlords are advised to remain vigilant in such situations and avoid clicking on links or scanning QR codes.
Not vacating the property after completing rent duration
A tenant can only stay at the rented property as long as it is mentioned in the rent agreement. It is up to the owner of the property to decide whether to extend the rent agreement or ask the tenant to vacate the property. If a tenant refuses to vacate the property even after multiple notices, you should seek legal help, as in most cases, tenants may leave without paying the arrears. In such cases, it has been observed that the tenants provide fabricated information.
Identity theft and illegal use of rental properties
In certain instances, tenants have exploited rental agreements to engage in illegal activities, such as operating unauthorised businesses or engaging in illicit trade, unbeknownst to the property owner. This misuse jeopardises the property’s integrity and can implicate landlords in legal complications. To mitigate such risks, it’s imperative for landlords to conduct thorough tenant verification processes, including background checks and regular property inspections, to ensure the premises are used solely for their intended and lawful purposes.
Common rental scams faced by tenants in India
Fake real estate agents/landlords
Tenants often meet fraud real estate agents or landlords. Considering the rise in such cases, the central government has implemented the Real Estate (Regulation and Development) Act (RERA), 2016. All real estate agents must have a valid RERA ID. Tenants can verify their RERA IDs by visiting the official RERA website of the state, where they are willing to have a rented place.
Fake agents or landlords may ask for an upfront cost, which they claim is refundable in the name of security deposit or visiting charges. They will refuse to meet in person, show you the photos of the property, or allow you to visit the property. They will insist on completing the formalities and payments online.
Asking for money before the site visit
Asking for a visiting charge is another tactic used by fraud landlords. The scammer may try to convince you to pay a hefty visiting charge, claiming the property is in demand. They may show a sense of urgency while pressuring the potential tenants to pay quickly and not miss the ‘opportunity’. This could either be an end game for the scammer or they may keep you in a loop and extract money in the name of additional fees, urgent repairs, etc.
Fake listings
Scammers create appealing listings of properties on popular online portals to lure potential tenants. In most cases, these listings neither exist nor are available for rent. Scammers may use attractive photos and descriptions of the property that may sound too good to be true, such as low rental price at a posh locality or low rent for a big house. This is done to demand an upfront price from unvigilant tenants.
Also read: How to spot fake listings on online property portals?
Requesting large upfront payments
Scammers often ask for a large upfront payment in the name of the refundable security deposit, booking charge, or reservation fees. This tactic is majorly designed by the scammers to create a sense of urgency and legitimacy. They either won’t show the photos of the property or show fake images.
‘Token Amount’ trick
The token amount trick is a common rental fraud faced by tenants in India. The scammer may ask for a token amount to register the request of the tenant before the property visit. Scammers may start with a minimal amount but keep the tenant hooked with false claims of additional charges.
They may call it a mandatory token amount or coin some other term. Scammers often claim that society won’t issue a “visiting pass” until the token amount is paid.
No agreement
If a landlord insists on offering his property on rent without a rent agreement, you should be alert as this may be just another scam. While it is not mandatory under Indian law for tenants and landlords to sign a rent agreement, it is advisable to do so.
The rental agreement states the duration of the stay, the rental amount to be paid by the tenant, and other terms and conditions related to the property. Hence, a tenant can easily face trouble in the absence of a legally valid rental agreement. If a landlord insists on letting out a property without a stamped agreement, you should consider it a red flag.
Also read: All you need to know about rent agreements in India
Holding back security deposit
It has been noted that many landlords hold back the security deposits when tenants move out. A fraudulent landlord may claim that damage has been done by the tenant or that the property needs expensive repairs.
Even if the tenant left the property in good condition, a scammer may come up with false claims or try to inflate the cost of repairs. The landlord may completely refuse to return the security deposit or delay the process, forcing the tenant to give up on trying to recover it.
Landlord not fulfilling repair promises
It is common for properties to undergo repairs and fixtures before a tenant moves in. Landlords may promise a full repair but may fail to do so. Promises for repairs, such as leaky faucets, electrical issues, etc., are often made verbally, and hence, tenants are prone to exploitation and fraud by landlords.
To avoid such issues, it is advisable to specify in the rent agreement about repairs to be done by the tenant and the landlord.
Credit card payment fraud
Apart from the common rental frauds faced by tenants and landlords, there is a trend to target individuals through credit card fraud. Credit card fraud occurs in two key scenarios:
- Fake rent payment with a credit card
- Misuse of rent payment apps
Fake rent payment with credit card: Nowadays people are resorting to fraudulent tactics to manipulate the credit card reward system. It involves making fake rent payments to friends and family members for a variety of perks, such as cashback, reward points, and discounts. Using this method, fraudsters manipulate the credit card reward system or convert credit card credit limits to bank account balances for business purposes. This is also used for claiming tax benefits and meeting credit card spending targets.
Misuse of rent payment apps: Fraudsters are increasingly exploiting popular rent payment platforms, such as CRED, and RentPayment, which allow tenants to pay rent online using credit/debit cards.
The scammers register themselves on these apps as landlords with their bank account details. They contact victims and deceive them by providing their credit card details. Using the information, a scammer will initiate a rent payment through the app. To avoid such fraud, it is suggested to verify the credentials of both the rent payment app and the landlord before approving the payment.
Reports on the number of rental fraud cases in India
Rental fraud has become a significant concern in India’s housing market, with various scams targeting tenants and landlords. While comprehensive nationwide statistics are limited, several reports highlight the prevalence and nature of these frauds in significant cities.
Prevalence of rental frauds in major cities
- Bengaluru: Known as the Silicon Valley of India, Bengaluru has seen a surge in rental scams, particularly involving fake property listings. In a notable case, a tech professional narrowly avoided falling victim to a fraudulent listing that offered a spacious apartment in a prime location at an unusually low rent. His vigilance in verifying the property’s authenticity prevented the scam.
- Mumbai: The financial capital has reported instances where individuals posing as army officers have defrauded property owners. In one incident, an engineer lost Rs 49,500 to a scammer who impersonated an army officer and coerced him into making payments through a QR code.
- Delhi: While specific cases are less documented in public sources, the National Capital Region’s vast rental market makes it susceptible to various rental frauds, including fake listings and advance payment scams.
Ways to avoid rental scams in India
Ensure physical meeting: Meeting in person ensures both tenants and landlords know each other. Tenants should make sure they meet landlords at the property to verify its existence and condition before signing any documents.
Never share OTPs, scan QR codes, or click on links: If you ever receive an OTP or someone requests you to click on a link or scan a QR code for any purpose, consider it as a fraud.
Avoid upfront payments: Avoid making large upfront payments for a security deposit before visiting the property and finalizing the deal. In India, landlords may or may not require a security deposit. Ensure the property and landlord are legitimate before making any payments or signing a lease agreement.
Be aware of unrealistic deals: Any offer that makes you think about the price being so low is likely to be a scam.
Police verification for tenants and landlords: Police verification helps landlords confirm tenant identities and check for any criminal history. It safeguards the property and enhances community safety. Tenants can also verify landlords to ensure property legitimacy. Many states offer online verification for easy access. This process builds trust and reduces rental fraud risks.
Use well-known platforms: Several websites and apps have come into existence to loot customers. Choose a legitimate platform that enjoys a good online/offline reputation.
Websites like Housing.com help you steer clear of rental fraud by offering verified listings and correct information to ensure a safe rental experience.
Read online reviews and take virtual tours: Read reviews about the property online before visiting the property or contacting the owner. Legitimate websites have enough photos and videos of the properties and reviews by visitors. Keep a sharp eye on those details and stay vigilant of anything that raises eyebrows.
Inspect rent agreement: Before moving in, make sure you “sign” the rent agreement. Ensure that the details match with the discussion you had with the landlord. Details, such as the duration of your stay, rental amount, security deposit, and responsibilities for fixes and repair costs are written clearly.
Verify documents: Both the landlord and the tenant should verify documents for legitimacy and accuracy.
Background checks: Both landlord and tenant should verify each other’s backgrounds. Landlords must ask for IDs, such as Aadhar cards, PAN cards, and employee IDs at the time of renting. Similarly, the tenant must ensure the landlord is genuine by checking property ownership documents.
Beware of high-pressure tactics: Scammers often try to sell an “overly popular” rental property claiming you may miss it if you don’t act fast. Such tactics are always built around flashy photos of the property, unbelievable rental amounts, and eagerness to let out. Beware of such unrealistic deals posted online.
What to do if you face a rental scam in India?
If you or anyone you know has faced a rental scam in India, there are some measures you should take to seek recourse.
Document everything: Collect all relevant evidence, including any communication with the scammer, such as call recordings, screenshots of messages, and payment receipts. Document everything thoroughly, noting date, time, and detailed descriptions of the incidents.
Report scam: File a complaint at your local police station detailing the incident. Provide all the evidence. If you have made any payments online, you can contact the cybercrime cell division.
Notify financial institutions: Make sure to inform your bank if you have made any payments online or if any amount has been fraudulently deducted from your account. They will freeze your account for further unsolicited transactions.
Alert real estate platforms: If you find any fraud listing on an online platform, alert the real estate platform about it as this may help others. The platform may help you in such situations.
Seek legal advice: Consult a lawyer, who specializes in real estate or customer protection. Your lawyer can provide legal advice and help you get compensation or take legal action.
Recent rental scams in India
| Recent Scams | Tactics Used |
| 14 June 2024: A 36-year-old man who posted an ad online about renting out his property lost 3.5 Lakh to fraud. The scammer posed as an army official and tricked the man into making multiple transactions to an account. | Posing as a government official |
| 27 Feb 2024: A woman in Mumbai who was looking to rent out a property was duped of Rs 90,000 by scammers in the name of an advance payment. | Asking for advance payment |
| 13 Feb 2024: Fraudster posing as army officer dupes Rs 20 Lakh from a Pune-based executive looking to rent out a property | Posing as a government official |
| 30 Aug 2023: Bangalore engineer scammed out of Rs 64,000 in advance payment fraud | Advance payment fraud |
| 21 Sep 2023: A man in Pune lost Rs 3,00,000 in the name of a token amount for a visiting pass | Token amount trick |
Housing.com POV
While you can seek justice if you face a rental scam in India, property fraud cases are usually delayed in the courts due to pendencies and prolonged legal cases. It is better to stay vigilant and get alert if anything seems suspicious. Today, there are many trustworthy online portals to buy or sell properties on rent. However, fraudsters have found their way to bypass the security firewalls and pose as genuine landlords/tenants. Apart from keeping in mind the tips we shared to avoid rental fraud, you also have to trust your gut. If a posting seems too good to be true, slow down as it could just be another scammer.
FAQs
What are some common rental frauds in India?
Some common rental frauds in India include tenants impersonating as government officials, advance payment scam, rental agreement fraud, online fraud and QR code scams, fake listings, visiting charge scams, etc.
How to spot a rental scam when renting a property?
Common ways to spot scams when renting a house are unusually low rent, requests for large upfront payments, owner not allowing a physical property visit, etc.
How can someone recover from a rental scam in India?
If you have faced a rental scam in India, it is advised to stay within the law and file a legal case against the fraudster. Gather all the evidence to help your lawyer build a strong case.
What to do if a tenant refuses to vacate?
If your tenant refuses to vacate after the lease has expired, you can file an eviction suit in court.
Is a rent agreement mandatory in India?
A rent agreement is not mandatory in India. However, it is suggested to have a legal rent agreement to avoid unnecessary disputes.
Can a tenant claim ownership?
According to the Limitation Act of 1963, a tenant may claim ownership rights after staying for 12 straight years.
Are online websites legit for renting a property?
While there are legit websites to rent a property in India, there are also many fraudsters online. It is suggested to stay vigilant online and visit popular websites for renting a property in India.
Is a security deposit mandatory for tenants?
A two-month refundable security deposit may be asked by landlords. The amount gets refunded to tenants when the lease agreement ends.
How to spot a fake listing on online websites?
Check for unusually low prices, vague information about the property, unverified contact information, fake deals, and offers.
Should a landlord pay for repairs of a rented property?
Usually, a landlord pays for repairs unless the tenant did something. Minor repairs, such as electrical, faucet repairs, etc., are often taken care of by tenants.
My potential landlord is asking for a security amount. Should I pay?
Tenants are usually required to pay a two-month security amount for rental properties in India. However, if you have not yet visited the property, meet the owner in person, and verify the ownership, do not pay any amount upfront as this is a common rental fraud in India.
