Pet Fees Or Pet Deposits: What Should Your Rental Policy Be?

Pets are a contentious topic among property managers – what kinds of pets do you allow at your property, how many, and how do you charge for them? The majority of property owners require some type of financial commitment from renters who bring animals into the home, but whether that money is returned or not – whether it’s a deposit that applies to damage or a flat fee – is a different matter. Your decision may hinge on a number of conditions, ranging from local law to the type of pet.

If you’re considering developing a pet policy for your rental property or think it’s time for a revision, here are 4 factors that should play into your considerations.

The Legal Standing Of Pets

As a property owner, you have extensive leeway as to the restrictions you can put on pets. You’re permitted to restrict the type of pets you allow at your properties (such as only permitting cats), you may restrict breed types or sizes, you may limit the number of pets, or you may restrict pets entirely.

One important rule regarding pets, however, is that you may not legally refuse to rent to someone who has a service animal that is trained to perform tasks to assist disabled people. You also are required to permit emotional support animals – these animals need to be certified, but they may not be trained to perform a specific task. Emotional support animals don’t have the same rights as traditional service animals in public, but they do have the same standing in terms of housing rights.

Pet Fees Or Pet Deposits?

When determining what you’ll charge renters who bring pets into the property, it’s important to note that you can’t charge any fees for either service animals or emotional support animals. Because these animals are an access need for people with physical or emotional disabilities, their presence cannot be made an additional financial burden on the path to residency. Luckily, these animals are the least likely to cause damage to your property.

For other pets, however, there is the question of pet fees versus pet deposits. A pet deposit is like a security deposit – so long as the residence is undamaged when the person and their pet depart, the property owner returns the deposit.

There may also be other stipulations that come along with a pet deposit and are discussed in the pet agreement. For example, as an owner, you are within your rights to retain the pet deposit if the renter violates the restriction on the number or type of pets in the home, even if they do not cause damage.

You also should require that basic information about the pets on the premises be put on record such as the animal’s name, breed, and a veterinary contact. If pets other than those on file with your office are found in the home, not only can you keep the pet deposit, but depending on the rest of your rental agreement, you may also terminate the lease. This is of course left to your discretion, but many owners find this to be the only appropriate response to such violations.

A pet fee comes with many of the same requirements as a pet deposit. Renters pay you a fee for the privilege of having a pet on the property. Since you aren’t legally required to allow pets, it’s entirely reasonable to deem ownership of an animal a privilege that you pay for. This also allows you to screen pets and allow them only selectively – you might require letters from prior landlords or that the pet be brought to the rental office so you can personally observe its behavior. In this way, pet fees tend to increase your flexibility.

Crunching The Numbers: How Much Can You Charge?

Different states have different rules regarding how high various fees and deposits can be. If you are renting out a property in a state with an overall maximum and you charge that maximum as a security deposit, you may not legally require an additional pet deposit or fee.

If you don’t currently charge the legal maximum, but you require a fee or deposit per pet, you should also be sure that you don’t violate the maximum through this cumulative process. If your policies specifically say that you allow up to three pets, yet that would exceed the fee limits, you may only be able to collect fees on two of those pets.

Even if there’s no legal maximum to the fees you can collect, you may have an issue enforcing fees seen as excessively high. If your charge exceeds $200 or $300 a year for pets, it’s possible that a judge could refuse to enforce it. Being reasonable tends to yield greater cooperation and ultimately better relations with your tenants.

Is Pet Rent The New Normal?

Recently there seems to be a trend in which owners charge pet rent rather than a pet fee or pet deposit. This is a relatively new trend and illegal in some states, and many renters consider the practice exploitative, so it may drive some good tenants away.

On the other hand, if you opt to charge only pet rent – which should be no more than $20 or $30 extra per month – and do not charge other deposits or fees, you may find that tenants are amenable to the arrangement. Many find it more manageable to pay a small amount each month than to dig up an extra $200 when moving and money is tight. The new trend is controversial, but has the potential to become more widespread.

Your Role As Owner

Whether you’re renting an apartment in your home or own a complex of apartments, you can approach the issue of pet ownership in a variety of ways. Ultimately, the goals are to both foster good relations between you and your tenant and protect your property. You’ll have to find the right balance between fees and friendliness in order to make this happen.

If you’re a landlord struggling to create a comprehensive pet policy for your properties, contact Green Residential today. Our family business boasts over thirty years of service in the Houston area and we can help you craft a pet policy free of loopholes and in accordance with local law. Stop struggling with the ins and outs of a good pet policy, and let us bring our expertise to the task – you’ll be glad you did.