Property Management Education

Why You Should Never Charge a Pet Deposit

Rental property investors often come to us with questions regarding renting to tenants with pets. Landlords and even property managers can make the mistake of charging a separate pet deposit (in addition to the security deposit). However, separately defined pet-specific deposits are not in the best interest of the property owner or the tenant.

Let’s look at an example. 

You have decided to allow pets in your rental property and charge an additional $500 pet deposit in addition to the standard $1,000 security deposit. When it comes time for the tenant and their furry friend to move out, you discover significant damages. The tenant is late on rent, left a hole in the wall, and owe you for utilities. Conveniently, all of these charges come out to the exact amount of your $1,500 security deposit / pet deposit.

But, now you have a problem. If none of these charges were a direct result of the pet, you are obligated to refund the tenant a check for $500, returning the pet deposit you collected at move-in. You will then have to bill the ex-tenant for the additional $500 in damages you paid to get the property ready to rent again.

To avoid this problem, we encourage rental property investors to increase the overall security deposit amount for a pet, but don't specify andy part of it as a "pet deposit." That way, if there are damages at the end of the lease, pet-related or otherwise, you can correctly apply the security deposit to tenant-caused damages without being restricted to separating out the pet deposit from the overall security deposit.

Additional frequently asked questions:

  1. Can I charge a non-refundable pet deposit?
    No. The terms 'non-refundable' and 'deposit' are contradictory. Either you charge a deposit or a non-refundable fee. Deposit means refundable by nature. Deposits must always be refundable.

  2. Can I charge an additional security deposit for a service animal or emotional support animal?
    You absolutely can not. Under HUD guidelines, service animals and emotional support animals are not legally considered pets. Talk to a legal professional if you have a prospective tenant with a service animal to ensure you are compliant with the law.

For more information on these topics, check out: Should I Allow Pets? 5 Considerations for Landlords

As always, the Grace Property Management team is here to serve as a resource. If you have additional questions about how to handle pets in your rental property, or any other questions about operating an income property, give us a call. 303-255-1990

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