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Some condo owners have found that their tenants have been in turn renting out the condo on websites such as Kijiji. (Fred Lum/The Globe and Mail)

Some condo owners have found that their tenants have been in turn renting out the condo on websites such as Kijiji.

(Fred Lum/The Globe and Mail)

Nightmare rental a cautionary tale for short-term stays Add to ...

A Toronto property manager had been using a popular website to rent out a unit in the King and Spadina area for $2,000 a week.

After a year using the HomeAway service, things had been going smoothly – until a woman recently made a week-long booking. Her stay was coming to an end, so the property manager had sent her e-mails, wondering when she’d be checking out. He needed to get the place cleaned for the next guest. The woman wasn’t responding. He didn’t think much of it until he finally called the apartment the day of her check out, and a male voice answered.

He said: “Who the hell is this?” And the voice said: “I’m the tenant. Who the hell is this?”

He said: “I’m the property manager.”

The man hung up. And that’s when he realized that he might have a problem on his hands.

“I raced down there and opened the door and there was a family from South America – 12 people, kids, baby stuff everywhere. They had just arrived in Canada. I was like: ‘What the hell is going on? You need to leave.’ They didn’t believe me.”

The woman who’d rented the unit through HomeAway was nowhere to be found.

As they realized they’d been scammed, one of the women started crying. Feeling badly for them, the property manager gave them 24 hours to vacate.

The unit normally rents for $4,000 a month, but the family had paid $2,000 cash for one month’s rent. They had responded to an ad on Kijiji that the woman had placed, complete with photos.

She knew what she was doing. Once she arrived and obtained the key from the property manager, she’d immediately set to work. She copied the key several times and put together a two-page welcoming binder filled with details, such as the Internet password.

“It was crazy. She gave them a laminated manual,” he says.

She seemed legitimate. But she wasn’t. She was a con artist.

The property manager didn’t want to give his name partly because being scammed is bad for business and partly because the condo owner has a public profile. So, we’ll call him John.

But John is also embarrassed because it didn’t end there.

The day the family from South America cleared out, he was at the apartment with a locksmith.

“He was changing the lock and people were showing up, saying, ‘I’m here to move in.’ I said, ‘What?’

“The concierge said: ‘What the hell is going on here?’ People were showing up with moving trucks. We realized she had rented it over and over. It was horrible.”

In all, the woman had conned 10 people out of at least $26,000 cash, for stays of varying lengths.

“We told them: ‘You have to go to the police.’ There was nothing we could do,” John says.

The woman, who’d told one victim she was from Nigeria, had booked the apartment with a stolen credit card. Initially, HomeAway paid the property manager upfront for the rental, but once the card was recognized as stolen a few days later, he says it clawed back the payment.

“They just kept saying, ‘You paid for us to advertise your property for rent. If you have problems with your tenants, it’s your fault.’”

HomeAway Chief Service Officer Jeff Mosler responded by email:

“Because the owner or manager controls the rental transactions, they are in the best position to screen guests and take other actions to protect themselves, such as obtaining appropriate rental agreements and taking additional legal actions as necessary. However, upon learning about such incidents, we do our best to keep bad actors such as this off our sites.”

Police confirmed they received at least one complaint about the incident, and are investigating.

Constable Victor Kwong, Toronto Police media relations officer, says property scams pop up now and then. Also this summer, a man posed as a doctor who was renting out one of his many rental properties. He was actually a former tenant who still had a key. He rented out the apartment to six different families, obtaining first and last months’ rent.

With online short-term renting, it can be even riskier because you might think you are more protected than you are.

“The problem with something like this is it’s pretty much an unregulated industry where you have no idea who you are renting your place to,” Constable Kwong says. “We will do an investigation, but there are no promises we will catch someone. We’ll try. The more that these are reported to us, the more it will help with the investigation.”

John had 10 more bookings with HomeAway for the summer. He cancelled all of them and switched over to Airbnb. Of the 10 guests, he rebooked eight of them through Airbnb, which he trusts.

However, as of Sept. 1, the unit will no longer be available for short-term rentals. “We’re done,” says John, who manages 40 properties.

He will only consider one-year leases, with tenants who pass the usual checks for previous landlord references, credit rating and work status.

“Because the police were involved and it caused a major commotion for the concierge for four or five days, they had an emergency meeting and changed the [building] policy within 30 days. The owner got a cease and desist letter.”

Through short-term rentals, the owner was making $7,000 after paying the property manager fees, including cleaning. With a regular leased tenant, he’s going to make around $4,000 a month.

Although the short-term rentals made the owner a lot more money for the year, John says it’s not worth the risk. “I get calls once a week saying, ‘I want to rent my place out for a week, because everyone does it. I see it on the news.’

“But people have no idea what they’re getting into. People don’t understand that if a one-week tenant overloads the washing machine and water spews out, the owner pays tens of thousands of dollars in damage. Your insurance would be null and void.”

If you’re a renter, go through a broker, Constable Kwong advises. At least get the contract checked over by an agent or a lawyer. It’s worth the expense.

And don’t pay your deposit in cash. Landlords should request certified cheques, John adds. “As soon as you surrender the keys to that person, if their cheques bounce, you’re screwed.”

Both tenant and landlord should ask for references that show the person is credible. Don’t trust referrals from previous landlords, he advises. They might just be desperate to get rid of a bad tenant. Landlords should make sure they’re properly insured. And they should get as much identification as possible.

Ask for a criminal background check, as well as a credit check, or any other check you require as a landlord, Kwong says. “There are tons of checks and balances.”

Editors note: HomeAway had not made a statement in time to make this story's print deadline. This online version includes the company's response.

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