Spotting a Rental Scam – Tips for Consumers Image

Spotting a Rental Scam – Tips for Consumers


Recently, 20 people in Calgary encountered what was supposed to be a straightforward home rental process, but turned out to be anything but.

Twelve would-be renters, all of whom had signed a lease and paid deposits for the exact same property, were left without a place to live when they all showed up at the property at the same time on moving day only to discover their keys didn’t work and that they had been duped.

While a rental scam may be hard to spot there are things consumers can do to protect themselves:

  • Look for a licensed property management company – Property managers are licensed professionals governed by the Real Estate Council of Alberta. By working with a licensed property management company, consumers have the protections provided under the Real Estate Act and Rules. Consumers can check the licensing status of a property management company they encounter by visiting the RECA website and clicking on Search for an Industry Professional. Keep in mind, though, that owner-managed rental units do not require a licensed property manager.
  • Avoid paying a deposit in cash – A landlord that asks a would-be renter to pay their security deposit in cash or through a wire transfer may be a red flag. Once cash has changed hands or a wire transfer is completed, it is impossible to track the money. Paying a security deposit by cheque means authorities can track where the money has gone in the event of a scam.
  • Never pay more than one month’s rent as a security deposit – It is illegal in Alberta for a landlord to require a tenant to pay a security deposit that is greater than one month’s rent. Inexperienced landlords may not know the rules, so it isn’t necessarily a sign of a scam, but it is something consumers should consider if they are asked for additional deposit funds.
  • Check prices on similar rentals – If a deal sounds too good to be true, it probably is. If a property is listed for rent at a price that seems too low for its location, size or other features, proceed with caution. This might be a situation of a scammer trying to dupe as many people as possible by offering up an “amazing deal.” Don’t rely solely on free-posting sites such as Craigslist and Kijiji, where posters (and scammers) can write whatever they want for free.

The majority of rental listings on the market are the real deal, but this doesn’t mean consumers should let their guard down. Alberta’s rental market is fiercely competitive, so there will always be people looking to prey on those desperate to find a place to live.