Lease fraud: 10 things to look out for

1: Pretending the unit isn’t subject to rent control or “just cause” eviction laws

Rent control and stabilization laws can be complex, and it’s often hard to tell if a unit should be protected by them. Too many landlords try to take advantage of that confusion–and weak enforcement of the law around tenant rights–and in some cases genuinely don’t know themselves.

One way they do that is asking tenants to sign away their rent control rights. That’s almost never legal: those rights can’t be waived by the terms in a contract. Another is not providing “required disclosures,” often a notice of the tenant’s rights under local laws.

2: “Key money,” non-refundable deposits and “cleaning fees”

Illegal in California, New York and many other states, non-refundable “deposits” and most added move-in fees are another red flag. They may be disguised in various ways, such as “cleaning fees” which are taken from your security deposit regardless of the condition you return the unit in. It’s also illegal in California, New York and many other states for landlords to charge for the preparation of the lease: a “document fee” or other charge for starting or renewing the lease is not permitted.

3: Regular inspections & entry with no notice

One of the more common ways landlords try to con tenants out of their rental rights is by including clauses which permit the landlord to enter their unit for reasons the law doesn’t allow. Regular “inspections” are not a valid reason for the landlord to come into your apartment: whatever they say (“we’re checking for any maintenance issues” or “we’re required to do it by law”), the main reason landlords want this right is to look for lease violations and “keep an eye on” their tenants.

Another strange but surprisingly common idea landlords have is that if you’re away from the unit for a few days, they can enter without your permission. Again, that’s illegal in New York and California, and many other states.

4: Waiver of warranties & “as is” units

We’ll be bringing you a longer post on the “warranty of habitability” and “warranty of quiet enjoyment soon.” For now, what you need to know is that neither of these “implied warranties” can be waived in a lease. If you see a clause saying you agree that they don’t apply, that means the landlord is telling you they don’t think they have to leave you in peace in your home–or even make the place you’re paying rent for livable!

The same goes for clauses saying the unit is rented “as is” or similar language: just because you didn’t test the oven and find it doesn’t work when you moved in, doesn’t mean the landlord doesn’t have to fix it!

It doesn’t matter if the lease is perfectly drafted if it’s for a unit which isn’t legal for use as a dwelling. Particularly common with “in-law” units and basement conversions that were built without proper permits, there are thousands of properties which are being rented out without a “certificate of occupancy” and so were never inspected for fire, earthquake and electrical safety.

A lease for an illegal unit is unenforceable, because it’s for an unlawful purpose In California, it’s even possible for tenants to recover the rent they’ve paid for a unit that lacks a certificate of occupancy!

6: Arbitrary “House Rules”

One common way for landlords to try to get around housing laws, particularly those requiring “just cause” for eviction, is by adding a list of “house rules” to the list. Even worse, they’ll often claim that they can add new rules at any time–even without giving written notice! Unfortunately, some will try to use alleged "breaches" as grounds for eviction.

Particularly where local law requires “just cause” for eviction, most petty rules aren’t really enforceable (and neither are the “fines” some landlords try to charge their tenants). They can be a good guide to a landlord’s attitude, though: do you really want to rent from someone who thinks it’s their right to put arbitrary restrictions on how their tenants live?

7: Concealing a sublease

Pretending you’re the landlord when you’re really subletting an apartment is a common form of lease fraud. It’s particularly prevalent in cities where long-term tenants can be paying a fraction of current inflated market prices, like San Francisco. For a variety of reasons, including the fact that subleasing is usually not allowed by landlords, many people don’t advertise the fact that they’re not the owner, and instead pose as a property manager–not always convincingly!

Subleases carry a range of added risks, including problems getting maintenance done as the legal tenant can’t send the landlord to check out issues without being found out—and the risk of eviction if that happens. For that reason concealing those risks from a renter should also be treated as fraud: you’re being asked for money under false pretenses, after all.

8: Landlords who won’t sign

Surprisingly many landlords think it’s in their interests to delay putting their signature on a lease until the tenant moves in (and they’ve taken their rent and deposit), and then “never get around” to signing afterwards. They think the lease isn’t really valid without their signature, giving them the right to kick the tenant out whenever they want.

They’re wrong. Once the landlord gives you the keys and takes your money, they’ve created a tenancy. However, refusal to sign is an indicator that you’re dealing with a landlord who doesn’t respect your rights—be careful!

9: Missing details for the landlord

There are numerous ways landlords, particularly in New York City, conceal who they are. Leases with only an LLC name and mailbox address, and an illegible signature, are all too common. There’s no good reason for landlords to conceal their identity or address—that’s why Augrented makes that information public! Outside NYC and SF, it can be harder to find: although a few cities, like Boston, have public “rental registries,” in many places it’s perfectly legal for landlords to provide little or no information on who they really are. If a lease is missing the landlord’s name and address, that’s a red flag; if it’s there, check it against records on Augrented or the local county recorder’s website.

10: Nonsense clauses

There’s a certain kind of landlord who thinks the way to show a tenant who’s boss is to throw together a bunch of important, legal-sounding words and add them to a lease.