Rental fraud has been on the increase in Spain, but the same is true of other countries. Fraudsters have been targeting people looking for both Vacation Rentals as well as Long Term Rentals, so you need to be on your guard no matter what type of rental you are looking for.
In one case alone in Spain, over 100,000€ was scammed from unsuspecting victims in 6 months, so it is a very lucrative business for fraudsters.
What are the telltale signs of fraud?
There are lots of give away signs that you need to look out for, some of them are pretty obvious, but only with hindsight!
Most of the points below apply to both Vacation Rental and Long Term Rental, but there are some more checks you need to do for Long Term Rental, which we have set out separately in the next section.
- Agent Website – Reputable rental Agents have a live and functioning website that you can visit and browse through their properties. Their properties are all visible on their websites, with photos, descriptions, pricing, etc., and in most cases you can book instantly online. Agents do not work for the secret service, and do not have a “Secret” stock!! Always ask for the Agent’s website link and make sure the property they are offering you is on their website.
- Generic Emails – Genuine rental Agents do not use Gmail, Hotmail, Outlook, etc. email addresses. Reputable Agents use an email that is tied to their website domain. If an email does not match the website, then check if the domain they have sent you the email from gets redirected to a live and genuine website that meets the above.
- Payment – Reputable Agents never ask you to send money to the owner direct. If an Agent asks you to send the money to the owner, this should raise very loud alarm bells.
- Payment method – Agents do not like dealing with cash, as it is a security risk for them. Cash is also time consuming when they have to visit their bank in order to deposit it in their account. Most Agents shy away from cash, and they would rather you paid them by credit card. This is safer for them, and safer for you. If they ask you to transfer the money to their bank, make sure the bank account is in the name of their company, or the person that claims to be the Agent.
- Vacation Rental Licence – Properties that are let for Vacation Rental in Spain must be registered with their Regional Government, and their licence number must be shown in all advertisement, including listings on portals such as AirBnB, VRBO, etc. There are heavy fines if Agents, or portals, do not show this information on their advertisement.
- Operating Area – Agents are generally registered in the country and local area they operate in, and unlike portals, they work locally. It is logical given that Agents have to organise cleaning, emergency help, meet-and-greet (although some do not offer this), etc. So an Agent in Barcelona is unlikely to have properties in Malaga, unless they have an office there too. Ask for their nearest office address to the property, and check it on Google Map.
What about Long Term Rentals?
People looking for Long Term Rentals are not safe from fraudsters.
Long Term Rental contracts are almost always between the tenant and the owner, even when an Agent introduces them to each other. The only exception is sometimes owners contract the Agent to collect the rent, but even then, the contract is in the name of the owner.
This means in addition to the points above, tenants should make sure they check the following:
- Nota Simple (Proof of Ownership) – This is a document that every owner has, and by law they must make it available for inspection. This is a summary of the deeds, that proves they own the property. Walk away if they will not provide a copy. Agents must have a copy, so ask the Agent.
- Energy Certificate – This is a certificate that is valid for 10 years, and shows the energy efficiency of the property, but also certifies that the electrical wiring has passed the safety test. It is a legal requirement that every tenant is provided with a copy. The certificate must be in the name of the owner and show the address of the property.
- Bank Account – Payment should either be made to the bank account of the owner, or if the property is managed by the Agent, payment should be paid to the Agent’s bank on monthly basis. Either way, make sure the bank account is in the correct name.
- Security Deposit – This is between 1 to 2 months, and should either be paid into the Regional Government Scheme, or to whoever the contract is with. It should never be paid to a 3rd party unless it is paid into the Regional Government Scheme.
Are Portals safe?
Not always, as it depends on the portal. Some portals such as AirBnB, VRBO, etc. require proof of ID from the advertiser, and vacation rental licence.
Some such as booking.com do not require either of these, so there is no guarantee that the property even exists, nor that the listing person is genuine.
Many portals ask you to pay them direct, and they pay the listing Agent or owner. Some require you to pay the listing Agent or owner direct. The latter is more risky, especially when there is no checks in place for the property or validation of the listing Agent/owner.
Summary
Fraudsters have become incredibly sophisticated, and in recent years they have even started to advertise on portals.
Finding a property on some portals does not guarantee they exist, nor that the Agent is the real representative. So when going through portals, make sure the advertiser has a long history on the portal with plenty of reviews.
You can save money by going directly to the Agent’s website, as Agents do not generally charge a booking fee. As long as you take the right precautions, then you are safe to book with an Agent direct, and save yourself portal fees.
Take basic precautions, and check out the Agent, or whoever is claiming to be the owner. It is your legal right, so do not become a victim.