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Home Insider Blogs Bill Gray's Blog Non-Refundable Pet Deposits Can Actually Cost You Money
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Jan 31
2010

Non-Refundable Pet Deposits Can Actually Cost You Money

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Posted by: Bill Gray on Jan 31, 2010 09:24

Tagged in: Untagged 

The way in which you explain, or don’t explain pet deposits can cost you profit.  If landlords could spend just one day as a professional collector attempting to collect tenant debt, one of the top objections they would hear from previous tenants is about pets and pet deposits.

 

“The urine spots on the carpet are covered by my pet deposit” is one example of a tenant either intentionally or unintentionally misunderstanding the pet deposit.  Many pet deposits are non-refundable.  If this is not fully explained at lease signing, most likely the tenant will believe that the pet deposit is no different than the standard deposit he placed on the rental unit.

 

Most tenants understand that when they pay a rental deposit any damage they cause to the unit will be deducted at move out from their deposit.  If the non-refundable pet deposit is not fully explained, the tenant considers it the same as the rental deposit.

 

So when Fido has several accidents and soils the carpet, the tenant often will guesstimate that his pet deposit will cover the cost of cleaning it.  In reality the cleaning cost is deducted from his refundable deposit.  Imagine the difficulty a professional collector has on the telephone trying to explain the difference between a non-refundable pet deposit and refundable rental deposit.

 

This is not to say that a certain percentage of previous tenants have a convenient memory when it comes to the terms of the lease.  But I do believe that a good share of landlords do not take the time to fully explain the terms.  An initialed and signed pet addendum will go a long way in settling disputes after move out.

 

Use a clear, understandable pet addendum and explain it clearly before the new tenant initials and signs it.  Doing so will save you profit by reducing tenant debt when the tenant moves out.

 

Email me your tenant screening or tenant debt questions.

Bill Gray

Bill@thelandlorddoctor.com

www.thelandlorddoctor.com

Copywrite 2010


Comments (3)Add Comment
1681
written by Sara Morrill, February 01, 2010
This is the kind of thing that makes me glad that non-refundable deposits are illegal in California, pet or otherwise. Even refundable pet deposits confuse me, though, because while I understand the carpet cleaning example (assuming it's standard to have the carpets cleaned between tenants, of course that'd come out of the security deposit instead of the pet deposit), but it's never been clear to me which damages are taken out of which deposit. Thankfully I do live in CA and don't have to worry about the particulars (I'll get money back either way) smilies/smiley.gif
2910
written by Rick Koontz, February 02, 2010
Renaming this particular deposit to a "one-time pet fee" removes all doubt about its intention and explaining it is much easier. In many states, a deposit by definition is refundable. "Non-refundable deposit" is an oxymoron.
1935
written by Larry Boyer, February 02, 2010
I agree with Rick's comment. The keywith an issue like this is clarity. This includes the actual word choice too, not some legal language buried in the rental agreement.

If it is a "deposit" that commonly means that the money will be refunded if there are no damages. If there are damages then then the damages will be paid for by the deposit. If the damages exceed the deposit then either the apartment loses money or needs to sue the resident (depending on what's in the rental agreement).

I agree that if there is a non-refundable fee it should be called exactly that. For better marketing and relations with residents an being able to explain why there is a fee would be great too. It's reasonable to assume if you're being charged a fee there is either some benefit being received (a dog walking area) or some cost is being covered (maintaining the lawn).
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