Tuesday, November 16, 2021

AG Nessel addresses Detroit's 'fake landlord' scam by reissuing consumer alerts, tips on spotting red flags

Posted By on Tue, Nov 16, 2021 at 11:55 AM

One in 10 Detroiters facing eviction are likely victims of the "fake landlord" scam that has plagued the vulnerable city for nearly a decade. - TLF IMAGES / SHUTTERSTOCK.COM
  • TLF Images / Shutterstock.com
  • One in 10 Detroiters facing eviction are likely victims of the "fake landlord" scam that has plagued the vulnerable city for nearly a decade.

After a gut-wrenching four-month investigation published by NBC News and Outlier Media last week, Michigan Attorney General Dana Nessel is now offering some resources to better assist Detroit homeowners, renters, and those with dreams to own in avoiding the "fake landlord" scam that could impact at least one in 10 Detroiters facing eviction.

“I was appalled and saddened to read the hardship these victims are facing at the hands of scam artists who target tenants,” Nessel said in a press release. “The best way to prevent a scam from happening is to know the red flags to look for, so you can spot them before a bad actor tries to take advantage of you or someone you know."



These scams, lawyers and housing advocates believe, have been plaguing the city for nearly a decade, and they are not only common, but seemingly easy to pull off.

First, there are tens of thousands of vacant houses in Detroit, many of which are owned by out-of-town investors who have little to do with the management of the home, let alone who may or may not be legally occupying it.

Scammers can also pose as a landlord or homeowner, due to the lack of oversight and sheer number of empty houses, and can simply change the locks, get some keys, fake some documents, and sell you a home you will never own and will likely eventually be evicted from. Most commonly, though, people who have had their homes foreclosed on will keep collecting rent from tenants, not alerting them that they are no longer their landlord.

While the outcome is grim when it comes to seeking justice as a victim of one of these scams, cases involving houses owned by the Detroit Land Bank Authority have a better chance at being able to own the home rather than face eviction and displacement. The Land Bank's Buy Back program, however, cannot recoup money lost to scams and fake landlords, and the program can do nothing to help those who have been scammed when dealing with non-Land Bank-owned homes — in other words, privately-owned homes.

To combat this, Nessel has reissued consumer alerts, which means you can report suspecting scams to be investigated. She also reminded the public of an online database of resources that consumers can access, much of which is dedicated to informing the public on how to spot, avoid, and take action on a variety of scams or consumer-related issues, including home lending and foreclosure scams.

Some tips include never signing a blank document, get copies of everything you sign, understanding everything you sign (this may require outside assistance), and getting everything in writing. That means every verbal promise should also be in any contract or document that gets put in front of you. You will also want to make sure your loan agent is employed by a lender that is a licensee or registrant who is authorized to sell mortgages in Michigan.

People should also look out for fraudulent rental listings, which can happen when scammers hijack legitimate housing ads, or through phantom rentals (in other words, making up a listing for a house that may or may not be on the market for a price much lower than other properties in the area).

"Never pay for a rental property without seeing it in person and meeting with the landlord,” Nessel said. “You should also search the listing online to ensure it wasn't copied fraudulently. Do your homework and trust your instincts if something feels off about a listing — even if it offers a big savings in your rent payment."

To file a consumer complaint with the attorney general's office, see michigan.gov/ag or call 877-765-8388. 

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