We’re supposed to stick together to pull through Covid-19. But as always, there’s someone out there waiting to destroy your trust in humanity. The fact is, our inability to go out during the circuit breaker period, coupled with desperation, is fertile breeding ground for scammers. Real estate, unfortunately, isn’t spared by scammers, so watch out for these:
Real Estate Scam #1: Scammers impersonating conveyancing lawyers
Target: Buyers (perhaps even sellers)
This usually takes the form of email fraud, and it’s been happening in Singapore as well as overseas. Part of the reason is that, with Covid-19 going around, most people are more reliant on electronic or other indirect communication with their lawyers. (In normal circumstances, we’d be more likely to meet face-to-face, and hand over things like cheques at the same time as a consultation.)
Since more is done over email right now, scammers have begun to impersonate conveyancing lawyers. This typically involves the use of bogus email accounts, which closely resemble the real thing (e.g. if your lawyer’s email is [email protected], they may set up something like [email protected]). Spot the difference?
The scammer uses the fake account to request various payments, like a cheque to exercise an Option To Purchase, or a partial payment for a new launch condo that may not even be part of the payment schedule. Later, because the scammer can’t actually cash the cheque, they’d follow-up by asking for a direct bank transfer.
Of course, all the money is really going to the scammer, and not the seller/developer.
[Note: Scammers may also cook up something similar to convince sellers to part with their money during a sale.]
How not to fall prey:
When you receive an email from someone claiming to be your lawyer, always call your lawyer and verify that they sent it. Never send any money before doing this.
You can also call the seller or seller’s agent to verify the details (e.g. if the email claims they want payment in cash, you can call and verify if it’s true).
Note that scammers usually can’t pull off this real estate scam unless they know about your relationship with your solicitor or your property purchase. So, ensure that your email is secured with a strong password you change every few months.
Real Estate Scam #2: Rental scams involving fake listings
Target: Tenants (perhaps even buyers)
Rental scams have been on the decline, although they were common enough between 2012 to 2015. Covid-19, however, sets a good stage for these scams to return.
Why? First, because of the number of people who many be stuck due to travel restrictions (e.g. lockdowns in their own country), and second, because transactions are more likely to be rushed, with fewer background checks.
The most common rental scam is to let out a room that doesn’t exist. The scammer just needs to put together a few random images, and create a fake listing. When you contact the scammer, he/she would tell you to place an initial deposit, which is routine, as tenants are meant to put down a good faith deposit with their Letter of Intent (LOI) to rent. (The good faith deposite is also meant to be converted to their security deposit once the Tenancy Agreement is signed).
After securing the deposit, the scammer will stop communicating and disappear with the money.
Another variation of the fake listing scam involves leveraging a real listing. Fraudsters may search for information and details about actual homes for rent/sale on regulated property portals such as 99.co and copy and paste those listing details + photos onto unregulated platforms such as Craigslist or Facebook Marketplace, pretending to be the owners/landlords/authorised agents.
In an effort to attract more interest, the scammers would typically show prices that are below market norms. They might even ask you to visit the location and look at the property from the outside (since in-person viewings are not allowed), just to make the scam more convincing.
With Covid-19, scammers may even be audacious enough to fake ‘For Sale’ listings, and may try to scam prospective buyers of parting with a deposit for a property they can’t view in person.
How not to fall prey:
Search for listings on sites like 99.co, where you can ensure all listings are genuine and tied to an agent registered with the Council for Estate Agencies (CEA). Avoid dodgy listing sites or forums where simply anyone can post.
You can run the images of the property through Google image search. If the same pictures of the unit appear for another address on Airbnb, a stock photo catalogue, furniture store websites or listings for homes in another country etc. then it’s very likely that the listing is a scam.
Finally, always have a CEA-registered real estate agent advising you, and be your first line of defence against suspicious listings.
Real Estate Scam #3. “Relief package” phishing scams
If scammers have compromised your account and, they may try posing as your landlord or government authorities (such as the HDB) to extract data from you. This can take the form of emails or messages offering you some kind of “relief” for Covid-19, or a request for information so that you can receive masks, hand sanitizers, etc.
As with the impersonating lawyers (see point 1), the typical way to do this is to use an email address that closely resembles your landlord’s, or a government website address. Most tenants are more than happy to send details for “rent relief”, or to receive “GST vouchers” for utilities, so they don’t think twice before sending all their details.
This is a classic phishing scam, where the information you provided can be used to set you up for another scam, perhaps many months down the road (the follow-up scam is not necessarily property-related. They might be setting you up for identity theft later).
How not to fall prey:
Call your landlord or the relevant government organisation to verify any emails or messages asking for personal information. Details like your occupation, identity card number etc. should already be known to your landlord and the authorities, so it’s suspicious that they’d need to ask you.
Also, check the email address properly. For landlord emails, it should match earlier correspondences. For government organisations, visit the official website and compare it against the email address or the address of any link that the suspicious email asks you to click on.
Real Estate Scam #4: Collective investment scams
These range from grey area collective property investment schemes, to outright scams. Often, Covid-19 will be used as the reason to get you involved (e.g. there are many mortgagee sales from Covid-19, so now you can buy for cheap).
These scams involve getting a number of investors to pool their money; they’re sometimes even told to rope in family members and friends. The cash is then used to purchase a number of different properties, often commercial (as there’s no Additional Buyers Stamp Duty) both local and abroad. The rental and resale of these properties will then provide shared returns.
In effect, what you get is an unregulated version of a REIT.
Some of these schemes are outright scams, and just make off with the money you “invest”. Others are not scams per se, just really bad, high-risk move in a downturn (even if it’s semi-legit, you typically can’t sell your share except to some other naive buyer who’ll take your place).
How not to fall prey:
If you want to take part in a collective property investment scheme, you’re better of sticking to legitimate REITs, which are regulated by the Monetary Authority of Singapore (MAS).
If you decide to hear these people out, leave when the pressure becomes too high; such as being pushed to pay for an online seminar, or to put down an initial payment. Remember there’s no “undo” button once you’ve signed and put the money down.
Real Estate Scam #5: Illegal subletting scams
Target: Landlords and tenants
Here, the scammer rents a property from a landlord, and then pretends to be the original landlord and proceeds to illegally sublet the unit to someone else.
The scammer is probably banking on Covid-19 that the original landlord won’t conduct checks on the unit that often, if at all.
Sometimes, the unit is sublet to engage in criminal activity such as fraud, which will put the original landlord in direct trouble with the law.
Even if the unit is sublet to a tenant with no intention to commit crime, the scammer would typically convince the unwitting sub-tenant to pay him a lump sum rental of a six or 12 months in advance, and then disappear with the money.
That’s a handsome profit, considering he only paid you, the actual landlord, a month’s rent plus deposit.
Landlords who don’t have the time to visit their rented out property, or landlords who are mostly based overseas, are most susceptible to this scam.
How not to fall prey:
Landlords, if you can’t manage the property directly, get someone to do so to make sure that the home isn’t illegally sublet.
But to really nip a potential scam in the bud, you may also ask prospective tenants for a reference from a previous landlord, most tenants would be happy to oblige!
Tenants, always be suspicious when a landlord asks for advance rent. For renting private residential property, you can do the following to verify that the landlord is the legal owner of the property:
- Purchase a property’s ownership information from the Singapore Land Authority (SLA) INLIS website for $5.25.
- Go to the Inland Revenue Authority of Singapore (IRAS) website and check the annual value of the property you are renting. This costs $2.50 per check.
For renting of HDB flats, ask the landlord to furnish the Proof of Ownership, which can be easily accessed via HDB’s website. You may also ask to view the following and check to check that the landlord is the legal owner of the flat:
- Any letter from HDB to the particular property
- A Town Council account Statement Book or Service and conservancy charges (“S & CC”) statement
If you’re a tenant and decide to engage a real estate agent, he/she should take the above steps on your behalf to verify the identity of the property’s owner and safeguard your interests.
Do you know of any other real estate scams? Share them with us in the comments section below.
If you found this article helpful, 99.co recommends The $11.4 Million Housing Loan Cashback Scam: How Does It Work? and Option To Purchase: 5 things you might not know about (but really should)
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