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The trend of earning money by renting out properties is growing rapidly. Renting out homes in cities has become a lucrative source of income due to the high rental yields available. However, landlords need to exercise caution; succumbing to greed or making a mistake could lead to receiving a notice from the tax department. Conducting due diligence before renting out a property is crucial, as fraud can occur even when a formal rent agreement is in place.

Cunning fraudsters employ various tactics to deceive people. They often gain the landlord's trust before committing fraud. After renting the property, they might use the address to register fake firms or obtain GST registrations. Consequently, the landlord could receive a notice from the tax department.

**The Fraudsters' Modus Operandi**
Fraudsters typically rent a property, sign a rent agreement, provide the necessary documents, and even pay the rent in advance. This builds the landlord's trust. However, the actual scam begins only after that trust is established. They may stay in the rented property for a month and then suddenly vacate it, leaving the landlord with no reason to be suspicious.

**GST, Firm, and Company Registration**
Fraudsters can use your address to register fake firms or companies, or even obtain a fake GST number. Essentially, they utilize the address of the rented house or shop to register these entities. In some cases, they even secure loans against that address. When they evade taxes through these fake firms or GST registrations, the tax department sends notices to that specific address—meaning the landlord receives them.

**Essential Steps for Landlords**
Before renting out a property, landlords must ensure police verification of the tenant is conducted and that all necessary documents are thoroughly verified. Additionally, the rent agreement should explicitly state that the property's address cannot be used for any purpose without prior permission.