FORBES — Maureen Farrell, 10.30.09, 07:20 PM EDT — Renters in the U.S. have caught some breaks in the aftermath of the housing crisis. In May the federal government passed a law allowing tenants of foreclosed homes to stay for the remainder of their leases, or up to 90 days, whichever is longer.
With 1.5 million homes having fallen into foreclosure in the first half of 2009, banks are having trouble keeping up with all their new assets. More than a few unscrupulous landlords have jumped into the breach, collecting cash for a few months from unwitting renters.
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.
Here are some potentially harmful maneuvers, whether you are renting a home or leasing commercial space, and ways to minimize the damage.
Dented Security Deposits
Tactic: 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.
Roommate Charges
Tactic: In expensive cities like New York and San Francisco, taking on a roommate is a quick and dirty way to slash living expenses. Your landlord knows this and may try to charge you for the extra body.
Recourse: Federal housing statutes prohibit landlords from raising rents on tenants who take on roommates or visitors–to a point. What’s typical: 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.
Usurious Late Fees
Tactic: Landlords can make a pretty penny on late payments. State laws are squishy on what constitutes a “reasonable” fee, and there are plenty of property owners who will charge stiff penalties. Reasonable fees start at $5 a day and head up to 6% of a month’s rent. Worst-case scenario: an eviction notice.
Recourse: Not much. Landlords aren’t required to offer a grace period on late payments, and state laws vary on when exactly rent is considered late. Your best bet: Pay on time.
Illegal Spaces
Tactic: Converting garages, basements or recreation rooms into apartments is a no-no without proper zoning approval. So is living there. If the authorities find out, you’ll soon be looking for new digs.
Recourse: City housing authorities or local title insurance companies can confirm that a residence meets zoning requirements. If you’re already living in an illegally converted space, you’ll probably have to leave. You could sue for back rent, though it’s a long shot.
Threat Of Eviction
Tactic: Landlords can find plenty of excuses to evict you, from lease technicalities to the occasional late payment.
Recourse: 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.
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