Property Management Education Blog

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 sometimes make the mistake of charging a separate pet deposit (in addition to the security deposit), when the reality is a that a separately defined pet-specific deposit is not in the best interest of the property owner or the tenant.

Let’s look at an example. Pretend you have a prospective tenant and they have a pet. You allow pets in your rental property, but decide to 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. They’re 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.

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 turned and 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 charge 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 questions we often get on the topic are:

  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, therefore deposits must always be refundable.

  2. Can I charge an additional security deposit for a service animal or emotional support animal?
    NO!! You absolutely cannot. 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.

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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