How to Avoid Rental Scams in the Philippines

How to Avoid Rental Scams in the Philippines

Dormy Team

March 7, 2024

Renting in the Philippines significantly differs from its neighbors, it’s admittedly stuck in the 90s with how rentals operate in the country. The use of paper-based post-dated cheques is the norm, and there’s no centralized credit scoring system to screen tenants adequately.

It starts with rental search — rooms for rent are mostly posted on Facebook and plastered on street tarpaulins and paper flyers. There’s no central authority that dominates the rental marketplace, and so it’s a free for all; it’s why we’re trying to build the online platform for modern-day renting at Dormy PH.

But fret not, because here’s our tips on how to avoid rental scams in the Philippines.

Never transfer money without an on-site viewing

There’s a rising trend of agents asking clients for “reservation fees” — claiming that they’ll hold the rental unit on your behalf for a specified amount of time, creating a false sense of scarcity in the rentals market.

It usually works if the condo unit or bedspace slot is really pretty, and so tenants want to secure it fast. But more often than not, the people posing as “owners” of these condos are not really the owners, they just stole the photo from a random Facebook group and called it their own.

Always verify documents before transacting

For condo rentals being marketed by freelance agents. As much as possible, counter-check with the condo administrator on whether or not the person you’re talking to is duly authorized to lease out the unit. You can request for documents like a Special Power of Attorney authorizing an agent to lease out a unit, or a Property Management Agreement contract signed by both the owner and the third-party agent.

For bedspaces and dormitories. Operating a rental business is a regulated sector in the Philippines; lessors have to update their TIN status in the Bureau of Internal Revenue to a “Lessor TIN” and adequate registration of businesses are required.

Professionally-operated dormitories with proper business registration documents will always have this notice of receipt and invoice issuance on full view of the reception area, because all businesses are legally bound to ensure that the notice is placed in an area conspicuous or easily seen in public view.

While the market is filled with non-professional rental operators, it’s always best to transact with bedspace providers that are following business registration processes with the government. Having a legal entity in place will save you all the headaches of dealing with ghost lessors, as professionally-operated rental spaces are held to a higher, legally-protected standard.

Don’t fill-up any application forms before viewing

Agents and third-party leasing managers sometimes request for Personal Data Sheets and copies of your government IDs before entertaining a viewing, but note that this is bad practice and must be avoided at all cost. This puts you at risk of identity theft, and so you must only provide your personal information if you’re 100% sure that you’ll be renting the property.

Here’s the typical process of renting a property:

  1. Inquiry and Early Discussions
  2. Scheduling an on-site viewing
  3. On-site viewing proper
  4. Drafting and review of lease contract
  5. Down payment, signing, and transfer of cheques

Anything that swaps that order out might raise a few flags, but there are always exceptions to the rule. At the end of the day, you’ll have to be vigilant in every rental transaction that you’ll be performing.

If it’s too good to be true, it likely is

Would you believe me if I told you that this 1BR apartment for rent is priced at PHP 8,000.00 per month? If you did, then you’re at a high risk for scams.

There are some great deals, but there will be a few rental listings that are indeed too good to be true. The best way to know if you’re getting the right deal is by scouting other properties in the area.

Location is usually the number 1 determinant of rental prices, and so looking at the rental prices near the unit you’re interested in is a quick and easy way to screen whether or not you’re getting a bad deal, or if you’re at the verge of getting scammed with a “too good to be true” deal.

Work with licensed leasing professionals

While it’s not always the norm, real estate brokers tend to have inventories for leasing properties. If you’re working with individuals and not a professionally-operated rental like dorms and co-living spaces, it’s best to work with licensed professionals.

A simple way to verify licenses is by using the Professional Regulation Commission (PRC) Licensure Examinations & Registration Information System, also known as PRC-LERIS, which you can access using this link. Search for their name or license number, and ensure that you’re dealing with a licensed Real Estate professional — this could be a Real Estate Salesperson, or a fully-fledged Real Estate Broker.

Double-check the authenticity of the property

When you find a property online, whether that’s via Facebook or any random property listing site, make it a habit to run a quick reverse image search on the images used by the property. It’s a common theme in the Philippines for scammers to use property images of other people, and a quick reverse image search can tell you more about the likelihood that it’s being used for scams.

Again, there’s no central source of truth for rentals in the Philippines, and that’s why at Dormy, we employ different verification levels to try and kickstart rental verification in the country.

Shown below are our verification levels. We recommend reading through our Safety Guidelines to stay safe on rental transactions within the Dormy platform.

In Conclusion

Dealing with a fragmented, poorly digitized rental market is indeed a headache. That’s literally why we’re building Dormy, to be the first to solve this hot mess.

But overall, the key takeaway here is to be level-headed, and double-check everything. What makes renting different is that it’s usually a long-term commitment, with greater expenditure involved. It’s not as easy as ordering your favorite Jollibee combo meal, and it needs thorough assessment and a little bit of brain power to run your common sense gears into action.

Stay safe out there, and we hope you have a great renting life ahead.

P.S., We have a bunch of available rental properties at Dormy PH, feel free to look around! Just make sure that they’re carrying our “Verified” tag, wink wink.

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