Two winters ago Astoria, N.Y., resident Rachel Colley was freezing in her own apartment. Looking to squeeze a few pennies, her landlord refused to crank up the heat. Colley, a senior account executive at JS2 Communications in New York, called the city several times to complain. An inspector eventually came to the building where, in its warmest spots, the temperature remained below 60 degrees Fahrenheit.
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Cornered, Colley's landlord responded by cranking the heat up to a Lucifer-like 90 degrees, prompting Colley and her flat mates to open the windows. Scrooge, anticipating the move, was waiting. He snapped pictures of their apartment from the outside of the building and threatened to show the city the pictures as "proof" Colley had been lying about the lack of heat.
Not willing to go to war, Colley let the matter die — along with her heat. Bundled up, she gutted out the remainder of the lease and moved.
Greedy landlords will resort to a range of tactics to make you pay more than you should. The worst are downright thieves, a nasty fact to which Alicia Stetzer can attest. A consultant to nonprofits, Stetzer put down a $3,300 deposit on a Manhattan brownstone in October 2009. The day before Stetzer was due to move in, the landlord called with bad news: Her former tenant refused to move out, and the situation couldn't be resolved quickly. The landlord assured Stetzer that her deposit would be returned shortly.
A year and two court dates later, Stetzer still doesn't have her money. The case continues. "I'm not letting her get away with doing bad things to good people," spits Stetzer.
As more homeowners fall behind on their mortgages, the rent rolls will continue to swell. In the first half of 2010, 1.65 million U.S. homes entered foreclosure status, according to RealtyTrac. That pace is ahead of last year's record 2.8 million foreclosures. Likely result: more victims of unscrupulous landlords.
Chris Combs, an attorney at Combs Law Group in Phoenix, Ariz., says he's seen cases where scamsters have swooped in on foreclosed homes, changed the locks, posed as the owners and written up fake contracts — only to cut and run with the security deposits.
Sometimes faux landlords aren't looking to steal security deposits — they actually plan to stick around to collect rent. That's what Carl Heflin has allegedly been doing for almost two years in Florida. Heflin's strategy: secure possession of properties by invoking an obscure and ancient law that allows outsiders to claim ownership of abandoned and vacant parcels. Heflin was arrested in September for the second time on charges related to renting homes he doesn't own. (The case hasn't gone to trial yet.)
Avoid Heflin's ilk by consulting your local Registry of Deeds to confirm who exactly owns the property. Vetting your landlord-to-be with the local housing authority or department of consumer protection is a good idea, too.
Here are more shady landlord schemes with a dose of prevention for each. For a complete list of 15, click here.
Scheme: Making shoddy repairs in order to dodge the costs of fixing things right is the oldest scheme in the book. Worse, some landlords try to charge for fixing that leaky sink or recalcitrant space heater. It's a crock: Under most state laws, renters are entitled to reside in a safe, habitable dwelling on the landlord's dime.
Prevention: For starters, look the whole property over before signing a lease — it can be very apparent what kind of care an owner affords his tenants. Also, put all repair requests in writing, and refuse to pay next month's rent until the problem is fixed.
Scheme: In expensive cities like New York and San Francisco, taking on a roommate is a quick and crowded way to slash living expenses. Landlords know this and may try to charge you for the extra body.
Prevention: Know the law. Federal housing statutes prohibit landlords from raising rents on tenants who take on roommates or visitors — to a point. The typical rule: two individuals per bedroom, plus one. So, up to three people (including children) can reside in your one-bedroom apartment before the landlord can jack the rent or issue an eviction notice.
Scheme: Some landlords are excessively obsessive about their properties. They want to know what's happening at all times within the walls they own. Hence the hundreds of tenant horror stories chronicling landlords who drop in unannounced.
Prevention: Unless it's a true emergency (fire, flood, earthquake), a landlord is not entitled to enter rented apartments unannounced. The laws differ by state — in California, for instance, landlords must request and enter during normal business hours — but tenants are almost universally protected from curious and prying landlords. Once the lease is signed, the property becomes the sole province of the tenant unless permission is explicitly asked.
Dented security deposits
Scheme: Your apartment may not have taken a beating, but your security deposit might. Call them "creative deductions" — $100 for chipped paint, $200 for ripped carpeting and so on. The big problem: By the time you get your dented deposit back, you've already moved out, so what can you prove?
Prevention: Before you move in, do a walk-through with your landlord, checking off any imperfections and taking pictures. Put the findings in writing and make your landlord sign the document. A week before you move out, do the same thing again. If you end up in small-claims court, you'll be well-armed.
Dodgy lease-to-own options
Scheme: These often opaque agreements allow renters to pay a down payment and monthly premiums in exchange for the right to buy a home outright at a specific price at a set time in the future. Pay late or choose not to purchase, though, and the option goes up in smoke, along with those monthly payments; same thing if housing values plummet.
Prevention: For a little extra dough, structure the option to let you pay fair market value for the home when the time comes. Vet all intermediaries by checking with your state's Department of Consumer Affairs or the Office of the Attorney General.
Scheme: When rents aren't set by the laws of supply and demand, as is the case with rent-controlled or rent-stabilized apartments, black markets spring up. To skirt the rent cap, slimy landlords will accept extra fees — called "key money" — from prospective tenants looking for an edge over competing tenants.
Prevention: Beware excessive broker fees. (A typical fee equals a month's rent or roughly 15 percent of the annual rent.) Some of that charge may well end up in the landlord's pockets. If you do smell trouble, you could file a complaint with the local housing authority. Then again, that time might be better spent looking for another apartment.
Threat of eviction
Scheme: Landlords can find plenty of excuses to evict you, from lease technicalities to the occasional late payment.
Prevention: This one has a nasty ring to it, but in many cases, no teeth. If your landlord does file an eviction notice, hire a lawyer immediately. And don't worry about being suddenly stuck out in the cold: You can't get evicted until a court has heard your case.
© 2012 Forbes.com