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Alice wants to rent a residence. She finds a house advertised and contacts the listing agent, Bob. Bob shows her the residence, and then offers her a lease agreement that requires her to pay him 3 months rent up-front (not atypical: first and last months, plus security deposit). How can she ensure that Bob has authority to lease the house? Or how can she make payment on the lease in such a way that she is protected against loss if it turns out that Bob does not have authority?

There is a notion in contract law of "apparent authority," which presumably would be satisfied if Bob can show Alice the house. But who is left with the loss if it turns out that Bob did not have authority? Just because someone has keys to a house doesn't mean they actually have authority to lease it. A fraudster who gains access to an unoccupied house could conceivably lease it to numerous parties simultaneously and then disappear with all their money. (So imagine the house is actually owned by out-of-town Zed, and Bob collects lease payments from Alice, Charlie, and Doug before disappearing.)

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  • This is a real scam.
    – User65535
    Nov 3, 2022 at 8:26
  • @User65535 It's also a real crime in the US. Years ago I was looking for rental properties on Craigslist (long story), but I encountered several postings for places where the "owner" was in a different state, and I just had to send him the money to secure the listing (so in effect exactly what your link says)
    – Peter M
    Nov 3, 2022 at 12:54

2 Answers 2

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Real estate ownership is a matter of public record throughout the United States, unless there are exceptional jurisdictions I don't know about, usually at the city or county level. So Alice could go to the county clerk's office (or, these days, probably their website), whose records would show that the property is rightfully owned by Zed, and might also include a home address or other contact information for Zed. Alice could then contact Zed and verify that Bob is Zed's authorized agent. Alice may have to iterate through several layers of delegation, e.g. if Zed hired property manager Yolanda, who subcontracted to Xavier, etc, etc, until she reaches the person who actually hired Bob.

Of course, if Zed hired a property manager specifically to avoid being bothered by tenants, they may not be too pleased about all this, which could hurt Alice's chances of being approved to rent the property.

It is also possible that the property is owned by some shell corporation (e.g. Zedcorp LLC) which Zed set up to insulate their rental business from their other assets. In this case Alice may have to chase more links, e.g. through some lawyer who is the corporation's registered agent.

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The person stolen from is left with the loss. Are you asking who is hurt by crime?

The key would be to verify that Bob is who he says he is. Giving thousands of dollars to some dude just because he had house keys is an unwise move.

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    So your answer to the question "How do I verify that Bob has the authority?" is "You have to verify that Bob has the authority."
    – pipe
    Nov 3, 2022 at 11:10
  • @pipe I answered one of the many questions
    – Tiger Guy
    Nov 4, 2022 at 13:26

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