An agent says that bogus ‘pop-up’ firms are repeatedly springing up, raking in high six-figure sums and then doing a bunk – typically leaving 20-40 landlords and tenants in the lurch after losing rents and deposits.
Jonathan Werth, managing director of LiFe Residential in London, says the problem has blown up again in the last three months, but that he has been aware of it for three years.
He thinks the same fraudsters are doing it over and over again – although he also believes that there is more than one set at work.
“However, it is hard to know,” he told EYE yesterday.
“The firms are set up under false names and appear to employ staff with false names. You never see any of them on Facebook or LinkedIn.
“If you ring up [some industry bodies] to ask if the firms are members, they cite data protection.
“At least with ARLA, you can check out who the members are – but none of these bogus agencies are ever members.”
Werth, who thinks the problem is a London one, believes that a fraudulent ‘pop-up’ agent is shortly to repeat a disappearing trick. He warned: “The pattern is familiar.”
He was so worried about one case that he called in the police.
He said: “We were concerned that these particular bogus agents were raising funds for terrorism, although we now understand that is not the case – they do it for themselves.
“We also know that arrests were made but have had no update since. ”
He said that the bogus agents target properties managed by his and other firms. They then approach the landlord saying they have a tenant who is keen on the property and prepared to pay a far higher rent.
The landlord may then agree to a viewing – although the viewing itself is bogus: “However, it does get them into the property, and the landlord believes there is a genuine tenant,” said Werth.
“Overseas landlords are particularly vulnerable, and I know of cases involving landlords living in South Africa and Asia.”
The properties themselves are rarely advertised on Rightmove and Zoopla, but on the free-to-list sites. The bogus agents typically use property details and pictures taken from agents’ listings on the main portals.
Werth said that he has had instances of landlords weaned away from his firm but who then return, admitting they have been stung.
He said that one concern is the ease with which anyone can simply set up an agency, without any licence or checks and no industry regulation.
He called for all the industry bodies to take far stronger action.
However, he said that the biggest single deterrent would be a legal requirement for all residential property investors to check out the agent they are potentially about to deal with – and who could fleece both them and their tenants.
“Landlords can be 100% naïve, but just as agents have a Know Your Client duty, so should landlords have to comply with a similar requirement.”
He said that his own firm, which has 13 offices across the capital and 4,000 properties under management, has contacted all its landlord clients to warn them that if they are contacted by other agents, they should check them out thoroughly.