Landlords and property managers are reporting a widespread level of fraud in the residential tenant applications.
According to a survey of rental housing providers conducted by the National Multifamily Housing Council (NMHC), almost all the polled respondents (93.3%) stated they received fraudulent applications over the last 12 months. Among those dealing with such chicanery, 84.3% of respondents said applicants submitted falsified or fabricated pay stubs, employment references or other income documentation, while another 80% said prospective renters misrepresented the information on their applications.
Furthermore, 70% of rental housing providers admitted to dealing with identity theft, fraudulent identification documents or the use of another individual’s personal information from prospective renters.
And when the applicants became tenants, things went from bad to worse – roughly one-quarter of the respondents’ eviction filings were linked to fraudulent applications and related failure to pay rent over the past three years. The survey determined the average rental housing provider had to write off nearly $4.2 million in bad debt over the past 12 months because of this dishonesty.
“There has been anecdotal evidence of the rise in fraudulent activity over recent years, but now we have clear evidence of the staggering impact of these crimes on the rental housing market,” said NMHC President Sharon Wilson Géno. “While most renters are honest, those who are not are causing the cost of rental housing to increase for everyone. Additional delays in many jurisdictions in the lease enforcement process, even when there is clear fraud, incentivizes bad actors and means that this illegal behavior costs responsible renters even more. We call on lawmakers and courts to take action that will address this problem.”
