Consumer Alert: Governor Cuomo Targets Apartment Rental Scammers

Written by Long Island News & PR  |  21. August 2013

Albany, NY - August 21, 2013 - Governor Andrew M. Cuomo today warned New Yorkers about apartment rental scams throughout the State. Real estate scammers are taking advantage of vulnerable consumers – particularly immigrants and other first-time residents – with false promises of securing rental apartments and illegally charging upfront fees, commissions and deposits. Illegal activity should be reported to the New York State Division of Consumer Protection at 1-800-697-1220.

Real estate scammers who target vulnerable individuals will not be tolerated in New York and will be prosecuted to the fullest extent of the law,” said Governor Cuomo. “ I urge all renters to remain vigilant about their rights, and report any and all violations immediately so that we can put these predators out of business.”

The New York State Division of Consumer Protection has received numerous complaints regarding deceitful real estate agents and apartment information vendors. Since January, 211 complaints have been filed with the Department of State, 121 of which were in the New York City area. Cases are being monitored closely, especially in areas reported to have an increasingly high number of victims, such as locations popular with immigrants or younger residents who are new to New York. Licensing investigators will be dispatched to canvass these areas, crack down on unscrupulous individuals and report any and all acts of fraud by dishonest individuals and entities.

As an example, some scammers pose as real estate agents or “apartment hunters” who offer to work with a prospective tenant to locate an apartment. These individuals often demand that consumers pay money upfront in the form of a deposit, fee and/or first month’s rent before attempting to secure an apartment. They will often pressure the victim by appealing to their sense of urgency or special circumstances. Once the money is handed over, the scammer usually has no intention of following through or helping the tenant secure an apartment, and refuses to return the consumer’s deposit. Many consumers will simply accept the loss and move on for fear they will be singled out or because they are not familiar with the particulars of real estate transactions.

“If you feel you have been victimized, we urge you to contact the State’s Division of Consumer Protection to report any impropriety from an apartment broker,” said New York State Deputy Secretary of State for Business Services and Consumer Protection, Marcos Vigil.

To avoid becoming a victim of real estate and apartment scams, it is important that consumers become familiar with these important steps before dealing with any agent or business:

  • Check if the real estate agent or apartment information vendor is licensed in the State of New York. Visit https://appext20.dos.ny.gov/nydos/selSearchType.do and enter the name of the person or business, or call (518) 474-4429. In New York State, all real estate professionals must be licensed by the Department of State, and must renew their license(s) every two years. Do not rely solely on a person’s testimony, business cards or advertisement.
  • Under no circumstances should you be required to pay an upfront payment or fee before securing an apartment. Do not be persuaded by anyone pressuring you to pay money upfront.
  • Non-refundable commission deposits are not permissible. An agent earns a commission when he or she assists the landlord and tenant in reaching an agreement on all of the terms of the apartment rental.
  • Commission fees are negotiable. You have the right to negotiate the amount of the commission to be paid to a broker or salesperson. There is no such a thing as a mandatory commission rate.
  • Make sure the property you are interested in is legitimately for rent. Many scammers act as representatives of real estate that is not on the market or does not exist.
  • Remember to obtain a receipt for any deposit or payment you make. If an agent collects fees that you owe to the landlord, such as a deposit or the first month’s rent, the agent has an obligation to separate that money from his or her own. If the money is not immediately provided to the landlord, the agent must put the money into a separate escrow account until the transaction has been closed. If the transaction does not close, the agent cannot keep the money for him or herself and must return it to you.
  • Avoid making payments or deposits with cash, it is always better to leave a paper trail by using a credit card or a personal check. Make sure to save a copy of the payment for your own records.
  • Ask for copies of all documents: checks, money orders, the application, receipts, the lease and any other document related to your apartment rental and keep them in a secure location in case they are needed to dispute a charge.

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