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It sounds like an ideal scenario if you’re a landlord or listing agent for a residential lease: A licensed sales agent submits a prospective tenant’s application to you with proof of a clean background check and great credit report. But is that tenant’s agent making life easier for you, or is it a scam?

A Rise in Leasing Fraud

The Texas Real Estate Commission’s Enforcement Division is urging license holders to do their own research to avoid being part of the rise in complaint investigations involving leasing fraud.

Evidence obtained by TREC Enforcement Division investigators reveals a scam in which licensed agents who represent leasing applicants provide listing agents or landlords with altered background and credit reports. In other cases, the applicant is not the individual or individuals that subsequently occupy the property.

The consequences of placing these tenants with fraudulent backgrounds and credit reports often leads to issues ranging from lost rent to property damage.

How to Avoid Problems

Brokers and sales agents are expected to be competent and aware of trends, including those like rental scams that could harm their clients.

TREC Enforcement attorneys suggest landlords and listing agents avoid accepting or considering any background check or credit report except those obtained by the landlord, listing agent, or the listing agent’s broker.

Conversely, sales agents or brokers representing lease applicants are encouraged not to provide background and credit reports to owners or landlords, as this is best handled as a listing agent function.

Verifying that the rental applicant is the actual person who takes possession of the property upon rental approval is another way to avoid fraud. While there is no one-size-fits-all solution, some brokers require that the tenant come to the brokerage office to confirm their ID matches the application and to hand over the keys face to face.

What to Do If You Suspect This Has Happened to You

Anyone can file a complaint with TREC. Filing a complaint is how TREC can enforce rules and laws and ensure license holders correct errors or face appropriate disciplinary action.