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How to Deal with Identity Theft: What to Do When Your Tenant Isn’t Who They Say They Are

Identity theft is a very real problem across the country. It’s not a new problem, but one that has grown in prevalence and seriousness over the years as we’ve gone digital in everything we do. As a landlord, you’re at risk of renting to a tenant who has stolen an identity so they can pass financial or criminal background checks.

More than 80 percent of potential tenants apply for a rental online. An identity thief can apply online with a false identity, move in to your property, cause expensive damage, and stop paying rent. You then have to pay the money it costs to evict them and get your rental property back on the market and rented. It’s an expensive problem and a logistical and legal nightmare.

Prevent Problems Before They Occur

An identity theft pro may not be discovered until it’s too late, but most thieves aren’t that careful. The best way to avoid the problems of identity theft is to catch them during the application process. If you’re using an online application process, look for a software or system that includes identity authentication. These systems look for specific criteria as the person fills out the applicant and flags their account. They can’t move forward in the process until they verify their identity to the system’s satisfaction.

Require Additional Proof of Identification

Online anyone can say they’re anyone, but when you ask for additional hard copy proof of identity, most amateurs will abandon the process. Make sure to apply the requirement to all potential tenants to avoid any claims of discrimination but don’t be afraid to require printed, signed, and/or dated proof from an applicant. This could be a pay stub, utility bill, physical driver’s license, or passport.

Treat Identity Checks Like Criminal and Financial Checks

You should automatically perform criminal and financial background checks on all prospective tenants. Make verifying or checking their identity part of the process, too. If you wait until you’re a little suspicious of someone or you see a red flag or problem, it may be too late. A tenant may question the extra steps, so let them know it protects everyone and helps verify that they’re a strong candidate for possible approval.

Report Problems to Local Authorities

If you suspect or find proof that one of your tenants has stolen someone else’s identity to rent your property, report them to the police immediately. Some people know when their identity has been stolen and some don’t until it’s too late. Many people tend to find out once missed payments affect their credit or they can’t file their taxes because someone else already has using their information. You’ll help prevent further fraud against a victim by alerting the authorities.

Identity Theft as a Lease Violation

Check with your attorney to make sure your lease agreement lists giving fraudulent information or illegal activity as a lease violation. (Hint: it should.) Once you know or can show that your tenant isn’t who they say they are, you should be able to terminate their lease immediately and begin the eviction process. Hopefully your property will escape the ordeal undamaged and ready to rent to a legitimate tenant.

People have all kinds of reasons why they use someone else’s identity to rent a home or get a job, but none of them are excusable. Because of the potential cost and liability to you as a landlord, do your best to prevent identity thieves from renting your property in the first place. When that’s not possible, use the power of the law to remove them from your rental as soon as possible.

If it sounds like a lot of work, time, or stress, you don’t have to go it alone. Work with a property management company who will work hard to verify the identity of your tenants and who knows how to terminate a lease and remove a tenant legally. ERA American Real Estate can help you find good tenants, craft a good lease, and deal with problems. Contact us today!

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