Stay safe | 8 essential tips to avoid falling victim to property scams

Scams are a serious concern for any person. With the costs of living increasing, and the unemployment rate high, fraudsters are rife, trying to make a quick buck. Prospective buyers and renters should be aware of the various tactics employed by scammers, as these scams can result in financial losses, legal disputes, and identity theft.

Forewarned is forearmed. Be aware of these property scams:

Rental fraud. Here scammers pose as landlords or agents and advertise non-existent or uncontrolled rental properties, sometimes through legitimate property portals but more frequently through Facebook property groups, Marketplace, and platforms like Gumtree. They use enticing imagery (often stolen from legitimate agents' ads) and may request upfront payments or deposits before granting access to the property, only to disappear with the money.

In a flip of the above scam, Thomson Wilks has encountered cases where a tenant stays in a rental property for a few months, then tells the landlord that they are going away and a friend or relative will be staying in the property to look after it. "The tenant has, in fact, sublet (illegally) to the person who is now in occupation. No more money is paid to the landlord and the tenant cannot be found. The occupier is often also a victim of the scam."

Title deed fraud is another form of property fraud in which scammers attempt to forge or fraudulently transfer property ownership documents to sell properties they do not own. They may target vacant properties or those belonging to absentee owners, utilising false identification and documents.

In June 2023, James Vos, acting City of Cape Town Mayoral Committee member, issued the following warning: "We recently became aware of a case in which an applicant received an email advising that she would receive a title deed for a house in Watergate, Mitchells Plain if she paid a sum of money ... If the opportunity is advertised as an 'RDP house', you are being scammed. If the correspondence does not have a city letterhead, you are being scammed."

Double sales. Fake estate agents, sometimes operating with other rogue "professionals" during the transfer process, sell a property to multiple buyers without their knowledge. These scammers may utilise fake title deeds or fraudulent documentation to deceive unsuspecting buyers. This can lead to legal complications and significant financial losses, especially if deposits have been paid.

Government housing assistance scams. Similar to title deed fraud, this involves con artists posing as government officials and offering to assist victims with housing applications. They may request personal information, such as bank account details, under the guise of processing the application.

In January this year, the Western Cape Department of Human Settlements warned residents about WhatsApp messages offering to fast-track housing applications for a fee. As soon as the money is paid, the perpetrator disappears. The department confirmed that no payment is required for any government housing service.

Timeshare scams involve pressuring individuals to purchase unwanted or unnecessary timeshare units. While this is more unscrupulous than fraudulent, the perpetrators know exactly what they're doing and employ high-pressure sales tactics or make vague (sometimes untrue) promises to convince victims to make a purchase.

Phishing scams occur through online platforms and listings. Scammers advertise properties at attractive prices but aim to steal personal information, such as names, addresses, and ID numbers. They may use this information to open bank accounts, apply for loans, or commit identity theft. It is important to be cautious when sharing personal information online and to use secure platforms for transactions. Beware of emails or text messages that appear to be from legitimate sources but redirect to fake websites designed to capture personal information.

Tips to avoid falling victim to property scams in South Africa:

1. Always use a reputable estate agent registered with the Property Practitioners Regulatory Authority. Using the PPRA's website, you can search for an agent's name to see if they are registered.

2. Conduct thorough research to verify the legitimacy of the property and the seller or landlord. Does the property exist on Google Maps? Is the landlord/seller willing to provide identification documentation to you for verification?

3. Insist on meeting with the agent at their office or the landlord/seller in person before viewing the property to ensure they are who they say they are.

4. Be cautious when providing personal or financial information online and use secure platforms for transactions.

5. Be wary of deals that seem too good to be true, as they are often signs of a scam. Is the rental incredibly low for the value you'd be receiving? Is the sales price far cheaper than the average for the area?

6. Never pay money upfront - legitimate agents and property developers will not require upfront payments other than to draw up your lease and complete your credit checks. If a landlord wants you to pay a deposit before seeing the property, walk away.

7. Consult legal professionals and bonafide property experts to ensure all documentation is legitimate and accurate. They have experience checking these kinds of documentation and have an eye for picking up any discrepancies.

8. Trust your instincts and walk away if something feels suspicious.

If you're a buyer, you can check the credentials of your agent by asking for their Fidelity Fund Certificate number and checking this with the Property  Practitioners Regulatory Authority, Then contact the Head Office of the property company they work for to confirm the agent and their branch is listed with them. Ideally, complete all paperwork in person at their office. Double-check with the relevant bank to ensure that your deposit is being paid into a trust account.

It is just as important for landlords and tenants to take similar care. Managing property agencies offer protection to tenants by placing rental deposits in trust accounts and partnering with regulated providers such as PayProp. "We also utilise expert verification tools to verify tenants and landlords, adding an extra layer of security to their services.

While conducting research through online portals is valuable for assessing market value and property availability, working through verified agents makes so much more sense. By following these precautions and consulting professionals, buyers, tenants, and landlords can reduce the risk of falling victim to residential property scams.