Fraudsters have greeted the new year by launching a new scam that victimizes rental-property owners.
Q. I am a small-time landlord, and I am hoping that you will warn your readers about a scam that cost me more than $1,200. A young couple agreed to rent one of my apartments in early December, and wrote me a check for the first month's rent and security deposit with plans to move in on Jan. 1. A week before the scheduled move-in, they claimed that the man's employer was transferring him out-of-state, so I refunded the money because their check had apparently cleared the bank 48 hours earlier. Turns out that the check I had deposited was a counterfeit, and now I'm out $1,250 because the account was nonexistent. My bank's manager said that there's nothing she can do, but added that three other local landlords had filed similar complaints with the branch in the past few weeks!
A. I'm sorry for your financial loss, but I appreciate the opportunity to share your warning with other readers.
The type of rental scam you described is growing increasingly popular among professional fraudsters, according to the Federal Bureau of Investigation. One reason, the FBI said in a recent consumer alert, is that "Since the banks do not usually place a hold on the [proposed tenants'] funds, the victim has immediate access to them and believes the check has cleared. In the end, the check is found to be counterfeit and the victim is held responsible by the bank for all losses."
The easiest way for landlords to protect themselves against this fraud is to demand the rent and security deposit be paid in cash, an FBI spokesman said. After all, if a legitimate prospective tenant is willing to write a check, it shouldn't be much of an inconvenience for him or her to go to the bank and withdraw good, old-fashioned greenbacks instead.
Another alternative is to demand the tenant pay the rent and security deposit with a money order or bank-issued check. But that's not a fireproof way to avoid becoming a victim, in part because many professional con-men have become expert at counterfeiting or altering legitimate-looking documents.
Q. Is it true that golfer Tiger Woods' ex-wife, Elin Nordegren, razed her mansion in Florida recently just to make him teed-off?
A. No. Despite some early reports to the contrary, the Swedish-born former supermodel recently said she had to raze the 90-year-old, 9,000-square-foot mansion in swanky North Palm Beach because it didn't meet hurricane building codes and was infested with termites. The home, which she purchased last March after finalizing her $100-million divorce from Woods, was valued at about $12 million.
Nordegren plans to build a nearly identical but slightly larger colonial-style mansion on the lot, according to blueprints filed with the Palm Beach Department of Planning, Zoning and Building.
Q. I know I can deduct the $3,130 I paid for property taxes last year on my upcoming tax return. But can I also deduct the $800 special assessment that the county levied on me last fall to build a new sidewalk in front of my house?
A. Probably not. The Internal Revenue Service generally prohibits deductions for one-time assessments involving the construction of sidewalks, streets and other projects that tend to increase the value of a homeowner's property.
Check with an accountant or other tax professional for details. Even if you cannot deduct the assessment on your new tax return, you can probably add it to the "cost basis" of the home to reduce any taxes on your profits when you eventually sell.
Q. We would like to refinance our mortgage because interest rates are so low, but we're hesitant to do so because rates seem to keep going down every week and we don't want to refi until we are sure they have finally bottomed out. What do you think we should do?
A. No one, not even the members of the rate-setting Federal Reserve Board or other top economists from around the world, can pinpoint when U.S. mortgage rates finally will hit bottom and begin to rise. There are just too many variables involved, ranging from employment swings in the smallest of American towns to global trends in oil, gold prices and the overall international economy.
That said, I would go ahead and refinance now. It's true that rates on a typical 30-year, fixed-rate mortgage fell to a record-low 4.18 percent in mid-January, according to researchers at the authoritative Bankrate Inc. (www.bankrate.com). But that was a mere 0.2 percent from the previous week.
If you waited for that minuscule decline to refinance a $100,000 loan, you would have shaved your borrowing costs by a mere dollar per month. And because most experts agree that inflation will heat up in the coming months, you should refinance now to take advantage of today's low interest rates.
• For the booklet "Refinancing the Right Way," send $4 and a self-addressed, stamped envelope to David Myers/Trust, P.O. Box 2960, Culver City, CA 90231-2960.
© 2011, Cowles Syndicate Inc.