Con artists are always active in New York City real estate and scammers thrive when demand for apartments is high—as is the case now. A record number of renters are taking advantage of low rents and concessions in order to upgrade to a bigger apartment or move here for the first time. If you’re looking to sign a new lease, it's important to identify situations where you might be vulnerable to fake listings or other types of fraud.
As a result of the pandemic, more of the apartment search is happening virtually. Unfortunately most scams happen online as well and they play on the pressure a renter feels to land an apartment.
Scammers will try to impersonate a landlord or broker, and renters will be “led to believe they are dealing with a legitimate property owner or representative,” says Aleksandra Scepanovic, managing director of Ideal Properties Group.
They may try to trick you into forking over a deposit with misleading or illegal listings or stolen photos. It’s not hard to spoof an apartment listing or create a real estate agent bio that looks legit.
[Editor's note: This article was originally published in June 2020. We are presenting it again with updated information for June 2021.]
That’s why it’s crucial to know how to identify scams during your apartment search. To help you avoid scams, Brick Underground offers some of our best advice on protecting yourself—and your money.
Fake listings are one of the most common scams, and often involve some form of a bait and switch: A real estate agent lists a seemingly great apartment but when you ask to see it, the agent says it’s no longer available and offers to show you others. In other versions of this scam, brokers will hold open houses, collect non-refundable application fees, and vanish. So how can you tell if a listing is fake?
As with most things in life, “if something is too good to be true, most of the time it isn’t,” says Gary Malin, chief operating officer at The Corcoran Group.
You should research the agent and the brokerage that is posting a listing to ensure it is a credible firm, Malin says. “Your own due diligence is obviously very important. You can go on Yelp. You can also ensure the agent doesn’t have any complaints filed against him or her,” he says.
Make sure the firm’s site is up to date, and not filled with broken links from years ago. If an agent doesn’t list a brokerage, that’s a red flag. Check to see if the agent has any other listings on a particular site—it’s not a good sign if they all look the same or have the same address.
A listing should have a real address, so take note if there’s only a street or intersection. If you’re interested in the apartment, contact the agent and ask for the specific address so you can research it online.
Also pay attention to the listing’s time on the market. An apartment that is hard to rent may linger on the market longer—but that can also be an opportunity to negotiate a lower rent or concession.
Be on the lookout for an apartment has been on and off the market several times—which could be an indication the asking rent is too high or there’s some other problem. Some brokers will relist an apartment with a different unit number to make it look newer, even though this practice violates REBNY's policy and brokerages discourage the practice. On most real estate listing sites you can easily check how old a listing is. Keep in mind too that if an apartment has been on the market for an extended period of time it also represents an opportunity to negotiate a lower rent or some concessions.
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Also proceed with caution if a rent seems like a great deal—it may not be a real apartment or the listing could be trying to mislead you. The most common scenarios involve listings with bedrooms that are not considered legal because they’re in the basement, or lack windows, or are too small. Brush up on the requirements of a legal bedroom to protect your safety.
There’s lots of online data to help you better understand the current market, so before going to see a place, familiarize yourself with what a typical asking rent is in the neighborhood. This can give you a good sense of whether or not the apartment you’re looking for is above or below market value. If it’s way below an area’s market rate, that might be a warning sign that something’s not right.
Some listing sites allow you to set parameters for size and price and show you apartments that match or are above or below your target rent. Real estate firms often provide neighborhood snapshots to give you an idea of what rents are like in a particular neighborhood.
What to ask
When you contact an agent about a listing, have a list of questions to ask a broker over the phone before meeting them in person. The more questions you ask, the more opportunity you have to see if the representative you’re dealing with is fully informed and professional.
“If someone’s intent is to scam you, typically the more questions you ask—they start to back away from you,” Malin says.
If there’s no floor plan shown in a listing, ask to see one because it can give you some crucial information before you waste time seeing it in person. For example, it can tell you if the bedrooms are large enough or if there are enough closets, or space for a dining table.
If the listing says the subway is a “five-minute walk,” confirm it yourself via Google Maps.
The point is: Do as much of your homework in advance as possible.
That’s because visiting an apartment in-person should be the final step in your search, not the first one, says Lynne Allaker, senior director of customer operations at StreetEasy. “An in-person visit, especially now, should really be used to confirm that you want to apply and move in, not to figure out if it’s a fit in the first place.”
If you are doing the search alone, it might be a good idea to have a friend or family member be your backup and vet the information with you. Malin says this can help you “make sure you are not making a decision based on emotion.”
When you meet an agent in person, there are easy ways to make sure they’re legit. First ask to see their real estate license, which they are required to carry. It has their photo, firm, and date of issue, so they shouldn’t balk when asked to present it.
Ask them to describe the terms of the lease and details about the building, landlord, and previous apartment tenants. These are good steps to take before putting down a deposit for an apartment.
If you are trying to find a rental before actually moving to NYC and are limited to virtual tours, you can try to ask for some kind of provision in the lease to protect you from bait and switch schemes. Malin suggests a clause that says “if for any reason the representations that were made by the virtual showing are not accurate [you] have a certain amount of time to terminate the lease.”
Net effective rent vs. what you’ll actually pay
You may see the term “net effective rent” while scrolling through NYC apartment listings. This is the discounted rent that factors in a concession a landlord may offer, like a free month or two, into the overall term of the lease. But what typically happens is the renter gets a “free month” in the beginning, and then pays a higher gross rent for the rest of the lease term, so knowing how to figure out your gross rent is key.
For example, if your max budget is $3,300, and you search accordingly, and find a place with a net effective rent of $3,300 with one month free on a 12-month lease, your gross rent—the amount you actually pay each month (except for the free one) would be $3,600.
This is not really a scam, but it’s confusing for even seasoned NYC renters, so it’s important to pay attention to the numbers to avoid a nasty surprise. Using Brick Underground’s Gross Rent Calculator, below, you can easily figure out the monthly rent you’ll actually pay.
Some New York City landlords offer a free month (or more) at the beginning or end of a lease. The advertised rent is the net effective rent. The net effective rent is less than the amount you will actually have to pay --- known as your gross rent --- during your non-free months. Brick Underground's Gross Rent Calculator enables you to easily calculate your gross rent, make quick apples-to-apples comparisons between apartments and avoid expensive surprises. All you'll need to figure out your gross rent is 1) the net effective rent, 2) the length of your lease, and 3) how many free months your landlord is offering. [Hint: Bookmark this page for easy reference!] To learn more about net effective versus gross rents, read What does 'net effective rent' mean?. If the landlord is offering partial months free, enter it with a decimal point. For example, 6 weeks free rent should be entered as 1.5 months.
Gross Rent Calculator
Some New York City landlords offer a free month (or more) at the beginning or end of a lease. The advertised rent is the net effective rent. The net effective rent is less than the amount you will actually have to pay --- known as your gross rent --- during your non-free months.
Brick Underground's Gross Rent Calculator enables you to easily calculate your gross rent, make quick apples-to-apples comparisons between apartments and avoid expensive surprises. All you'll need to figure out your gross rent is 1) the net effective rent, 2) the length of your lease, and 3) how many free months your landlord is offering. [Hint: Bookmark this page for easy reference!]
To learn more about net effective versus gross rents, read What does 'net effective rent' mean?.
If the landlord is offering partial months free, enter it with a decimal point. For example, 6 weeks free rent should be entered as 1.5 months.
A request to wire money
Are you being asked to wire money for an apartment before you’ve even seen it or before you’ve been promised a lease? Don’t do it—this is another common scam that newcomers to New York City often fall for.
Scammers sometimes operate by requesting a deposit to show the apartment, or a month’s rent to secure a prompt lease signing.
“Renters need to know not to fork out a cash deposit to be shown a property,” Scepanovic says. She points out this also applies to the video tours. “No reputable agent or broker in New York City will require money to be paid for them to show you a property. In fact, it would be illegal for them to do so,” she says.
Brokers cannot ask for checks to be written out to them as individuals, payment must go through a brokerage. “If they look like they are pocketing the money, it tells you they are not doing something proper. Put the brakes on,” Malin says.
One of the best ways of protecting yourself from illegal or fraudulent demands for money is to have a decent grasp of the law—for example you should never be asked to pay more than a month’s rent as a security deposit. Neither should you be charged additional fees for pets or move-ins in a rental building, although there are exceptions if you are renting a condo or co-op from an individual owner, in which case the board—not the broker—may impose fees. Either way, your application fee for an apartment should be no more than $20 and for that, you should get copies of your background or credit checks.
Sometimes scammers will try to sublet a place that they have no rights to. In some cases people have tried to sublet an apartment for the weekend either with no intention of following through or when it’s not even their place—collecting deposits and then disappearing. Remember it’s illegal for New Yorkers who live in buildings with three or more residential units to rent their apartments out for less than 30 days, unless the owner or leaseholder is present during the stay.
If something seems off about a sublet—and even if it doesn’t—ask for a copy of the lease from the tenant to confirm they have the ability to sublet. Follow your gut—if it doesn’t feel right, it probably isn’t.
There are a few things to watch out for when hiring a mover: Moving companies also have their own version of a bait and switch, when a mover offers you a great estimate but jacks up the price, essentially holding your belongings hostage until you agree to fork over more money; and even a “phantom delivery,” in which the movers will pack up your stuff, take your money, and disappear.
As with your broker, research your mover: Get a recommendation from someone you trust, check reviews online, make sure their website has a legitimate address and contact info, and ask them for references.
You can check to see if your mover is licensed to operate in New York from the Department of Transportation (call 800-786-5368, or email [email protected]). Any cost estimates should be given to you in writing, and you shouldn't pay upfront or give any type of deposit.
Among other suggestions, the state Attorney General’s office recommends getting estimates from different movers based on a physical inspection of your home or apartment. Their guidance also suggests you make sure the mover gives you a written "Order for Service" before anything is moved. This document should set out the probable cost of the move and how much you will have to pay to have your items unloaded if the actual cost exceeds the estimate.
Switching utility companies without your permission
This scam is called slamming: When scammers pose as utility company reps, promise you lower energy bills, get your account information, and switch your service without permission. Con Edison doesn’t send reps to people’s homes to check their utility bills, so if someone comes by claiming to be with the company, tell them you’re not interested.
You can also call 1-800-75-CONED to confirm if someone is actually who they say they are. This can also happen over the phone, so be wary if you get a call from someone claiming to be a utility rep, who then asks for your account or any personal information.
The bottom line
In all cases, trust your gut. If anything seems shady—proceed with caution. Do your due diligence before handing over any money or financial information, and just walk away if something doesn’t seem right. If you’ve stumbled across a suspicious listing on a particular listing site, alert the site’s administrators—through the help or FAQ sections that cover how to flag questionable listings.
“If you feel uneasy, the best thing to do is put the breaks on and take some time to reflect and maybe go in a different direction,” Malin says.
And if you do get scammed, it’s important to fight back by filing a police report so the authorities can track this illegal behavior and potentially catch the fraudsters.
—Earlier versions of this article contained reporting and writing by Emily Nonko and Nikki M. Mascali
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