Real Estate Matters | Real Estate Scams & How To Avoid Them – Part 1
Juliet Risdon
When it comes to petty crime, Macau is one of the safest places on earth.
However, the property boom has created new opportunities for scammers, some are simple and others are more complex.
Either way you stand less chance of being scammed if you recognize a potential set up, so we have listed some of the scams that you might encounter.
We must stress that these scams are still relatively rare in Macau, and it is not a widespread problem yet. But they are increasing in the frequency and complexity, and it pays to know the details of these scams.
It could never happen to me
Recently we dealt with a case where someone had impersonated an owner to collect rental income. The tenant was pre-occupied in a high paying job and had paid rent in good faith.
Scams are happening in Macau right now, and it’s a big mistake to think that you are immune to this phenomenon. It does happen to other people, and it may also happen to you if you are not cautious and vigilant.
Scam: Not the real landlord
Renting an apartment should be straightforward, but beware; There are people out there posing as owners who are not the real owners !
This scam starts with identity theft as the scammer uses false documents to identify himself or herself as the property owner.
Once the identity is established, the scammer poses as the owner and instructs the tenant to pay rent to a new bank account, and may often ask for advanced rental payments (three or six months in advance is not uncommon).
The tenant pays rent to the new account, only to be contacted by the real owner in due course when they discover rent has not been paid. Confusion ensues, both parties blame each other and meanwhile the missing funds are not recoverable.
What about the bank account, isn’t it easily traced ? In some countries it is easier to open accounts with false names and documents, and its rare that the fraudsters are caught.
How to avoid the “not the real landlord” scam
Obtain a copy of the official property document or Busca from the Public Notary, and then cross check the name against the owners ID document.
Ensure that the bank account into which you are paying the funds is either in the same name as the owner, or belongs to the real estate company who represents the owner. In both cases, ask for a receipt for each payment.
Scam: Get rich quick
The get rich quick investment scams come in two main varieties.
The first is a ‘Ponzi’ scheme, in which the scammer entices you to invest in a real estate deal. Rather than use your money toward the purchase, he or she uses it to pay earlier investors.
The second is real estate investment seminars that promise to teach you the ins and outs of real estate investing, but do so through expensive materials and programs. Strictly speaking, whilst these are not scams, clients end up out of pocket by very large sums of money, so worth mentioning here.
How to avoid the “get rich quick” scam
Make sure that when you make a property investment, the details are handled through a lawyers office and registered by a Notary.
Going to real estate seminars and learning more about investment is a good thing, just be aware that you will be pressured to invest more money and usually the request is urgent.
Give yourself a week to think things through before making a commitment to any further programs or costs. We guarantee that the ‘time sensitive’ deal will still be available in a week, and in some cases the deal may have gotten better.
Juliet Risdon is a Director of JML Property and a property investor.
Having been established in 1994, JML Property offers investment property & homes. It specializes in managing properties for owners and investors, and providing attractive and comfortable homes for tenants.
info@JMLProperty.com
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