My Next Move

How 'Accidental Landlords' Say They Fell Victim to Nonpaying Tenants

tenant Daniel Helms in screen grab of WCCO report

A Minnesota couple who signed rental agreements on Twin Cities-area homes reportedly managed to live rent-free for months after moving in and allegedly refusing to pay rent. By the time their eviction made it through the court process, though, their landlords were out thousands of dollars, says a local TV station.

When the bubble burst on the housing market about five years ago an explosion of first-time "accidental landlords" were created -- when owners decided to rent out homes that they couldn't sell or chose not to sell at decreased value. Lower housing prices, meanwhile, led others to buy homes at bargain prices and turn them into rentals. Some of these inexperienced landlords fell prey to the kind of renters who cost much more than they pay in rent -- if they pay at all. Purported examples of these are Daniel and Rachel Helms who, their recent landlords say, didn't even have money in the bank to cover their $1,700 security deposit check.

"I deposited it, and the next day I had noticed in my Wells Fargo account that it had bounced," accidental landlord Cody Johnson told Minneapolis TV station WCCO (as seen in the video below). After moving to a larger home and putting their former one up for rent, Johnson and his wife Amy Macht thought that they had found the ideal tenants, they said.

"These people seemed very polite, very nice," Macht said. But the Helms were not who they said they were. Their names were misspelled by them on their rental application and as a result, when the landlords ran a background check on them, they didn't discover that this wasn't the first time the renters had allegedly cheated the system.

They found charges of the Helms fraudulently receiving public assistance and not paying bills, including failure to pay three other landlords, WCCO reported. In addition, the station said, they have suspended drivers licenses -- though that didn't stop them from having a U-Haul trailer hooked up to a vehicle in their driveway as they informed a WCCO reporter that they would be moving out soon with their four children.

Johnson said of Daniel Helms: "He told us he's always wanted to pay but he hasn't been able to find work as a painter to cover his bills, and that he's the victim of people writing him bad checks." That's not too different from what the Helms purportedly told Melissa and Mark Damon, other landlords who said that they had trusted the couple but did not receive the rent due them. After weeks of texting various excuses, the Damons' told the Helms family to move out.

"We get a text back, 'Sorry you're going to have to take us to court. We have nowhere to go. The judge will have to tell us when we can move,' " Melissa Damon said.

The court order to move out took four months. They owed the Damons $6,400 on rent and the court ordered that they pay $10,000 in damages. But the renters left them holding the bag, the Damons said -- along with 66 bags filled with garbage that were found in the rental's garage. In addition, reported WCCO, there were holes in the property's walls, as well as carpet stains and water damage.

Here are some ways that landlords can avoid falling victim to deadbeat tenants -- though nothing is foolproof.

1. Check applicants' credit scores. If a prospective tenant has had a car repossessed, a foreclosure, or is in significant credit card debt, the homeowner should be careful about renting to that tenant. Bad credit should raise concern about the ability to pay rent and pay on time.

2. Do criminal background checks. Although Johnson and Macht took this step, it was on a false name. So also ask for photo ID and other proof to make sure that prospective renters are who they say they are.

3. Check with the motor vehicles department. In several states that allow online payments for license tab renewals, the DMV will also have drivers' information available online. Have potential tenants log into the site and show you verification of their drivers license information against the forms of ID they present.

4. Take a cashier's check for the security deposit. For the security deposit or first month's rent, require that they pay with a cashier's check. Or if they will pay by personal check, make sure that the check clears at least a week before the move-in date. Though please note: Scammers have been known to write phony cashier's checks, as AOL Real Estate has reported.

5. Call their employers. You only want to rent to those gainfully employed, so actually pick up the phone and call employers to see how long prospective renters have been employed by them. If an employer is fairly local, perhaps even make an in-person visit, as it's not unusual for someone looking to scam to also arrange to have someone other than an employer talk to you on the phone. That was the case with serial evicted tenant Pamela Winegardner who maintained several phone numbers and answered them in different voices, just to give herself rave recommendations.

6. Use the Internet to verify facts. There is so much in the public domain. You can search for names on phone directory websites or places like Intelius.com that will give you approximate ages and cities where people have lived. Former employers' websites may also be listed (although Winegardner also created websites for fake businesses of her purported past employers). See how the information compares to what they are telling you and what else the background check reveals.


More about landlords and tenants:
Tips for Homeowners-Turned-Accidental Landlords
How to Choose an Investment Property That Earns You the Most
Alleged Thieves May Have Collected Rent on Someone Else's Foreclosure

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