Pets – REIA of Oakland

Though most of us have pets that we love more than our children, you may be hesitant to allow pets into your precious rental properties. It’s understandable—but do the benefits outweigh the risks?

Pet owners are everywhere, especially here in the US. According to the American Pet Products Association’s National Pet Owners Survey, there are approximately 65.1 million households that own at least one dog, while 46.5 million households own cats.

As a landlord, allowing pets in rental units can be difficult. On the one hand, there are pet-owners out there who will only rent properties that allow pets—they consider their furry friends a family member. But on the other hand, pets can cause property damage and create noise disturbances for other tenants (especially if it’s within an apartment building or multi-family complex).

In this article, we give you a low-down on the risks and benefits of allowing pets and include info on protecting your property while avoiding liability.

The Risks and Benefits of Allowing Renters with Pets

The majority of renters own pets, and businesses outside of real estate are capitalizing on the trend by catering to pets and their owners. For example, brands like Starbucks are offering pet-friendly products and experiences, promoting a positive attitude among pet owners.

Like any business, landlords pet owners are a lucrative market to tap into.If you consider allowing pets into your property you run into an equal amount of benefits and issues:

Be vigilant with your pet and tenant screening, and you’ll reap the benefits and mitigate risks. Here’s how.

Decide and Inform What You’ll Allow

It’s crucial to be clear about what is and isn’t allowed when it comes to pets in your rental property. That’s why it’s a good idea to include pet requirements in your lease agreement, as well as a pet addendum.

The pet addendum should outline specific rules and regulations related to pets. It should include:

The number of pets allowed
The types of animals permitted on the property

The addendum should also include clauses that protect you as a landlord:

Allowing you to remove aggressive or dangerous pets while allowing the tenant to remain
Revising pet rules with 30 days’ notice, and outlining penalties for violating pet-related rules

What to Pet Rules to Include

When creating your pet addendum, consider the following:

Common pets in your area
Potential damage each pet could cause

You can then include specific requirements in your lease agreement and pet addendum to address these concerns. For example, you may want to limit the number of pets each tenant can bring and exclude larger dogs or exotic pets.

To protect yourself as a landlord, include key clauses in the lease explaining the agreement for responding to problems concerning pets. These clauses should clearly outline the procedures for dealing with pet-related issues and any potential consequences for tenants who violate the rules.

By including a pet addendum in your lease agreement, you can ensure that both you and your tenants are on the same page regarding the expectations and guidelines surrounding pets in your rental property.

Get Insurance and Follow the Law

Before allowing tenants with pets, check your insurance policy for any limitations, exclusions, or coverage requirements. These regulations will vary from one state to another.

For instance, Michigan landlords must also comply with state pet laws, such as requiring pet vaccinations and enforcing proper pet waste disposal. Landlords should also ensure responsible adult supervision of pets in common areas. Visit the Michigan government website for a complete list of pet laws.

Follow Fair Housing Laws

Be mindful that a Fair Housing Law protects disabled people who need animals for their emotional well-being and physical safety. The term “disabled” now includes the blind, paralyzed, those with clinical depression, and those with post-traumatic stress.

You can request a note from their physician to verify their condition and animal assistance requirements to keep things documented.

Charge Higher Fees for Pet Owners

Landlords can charge pet-owning renters a premium in three ways due to the additional risks involved in allowing pets into the property. Here are the three:

The first is a pet deposit, which is refundable and ranges from $100-$300, collected at the beginning of the lease to protect the property from damages related to owning a pet.
The second is a nonrefundable pet fee, collected at the start of the lease, usually 25% of the first month’s rent, acting as compensation for the property damage risks resulting from allowing pets.
The third is a “Pet Rent,” a monthly fee for keeping a pet on top of the rental price that ranges from $25-$50/month.

Screen the Tenant and Pet

Conduct thorough screenings that include feedback from references and past landlords. During interviews, landlords should ask about the pet’s vaccinations, licensing, and past behavior.

Clear expectations for pet owners should be outlined in the lease agreement, including requirements for keeping shots, licenses, and tags up to date, registering the pet with the landlord, and taking responsibility for any harm caused by the pet.

Also observe physical and behavioral characteristics of the pet, such as aggression or friendliness, interaction with the owner, and whether the pet is spayed or neutered. By taking these factors into consideration, you can make informed decisions about whether to allow pets in their rental units.

More Tenants and Extra Income: Consider Allowing Pets

With nearly 90 million households owning a pet, it’s safe to say American love their fuzzy friends. So, ignoring that fact might lead to lost profits if you’re a property owner. As long as you follow our tips above and be careful with your contracts, allowing pets into your properties only has upsides.

Learn more about your rights as a landlord over tenants’ pets, reach out to us today to connect with our team of experts. Join REIA and subscribe to our newsletter to get the latest news in real estate.

Decide What You’ll Allow

Pets come in all shapes and sizes: dogs, cats, birds, fish, rabbits, gerbils, small-scale reptiles, etc., and some have a much higher potential for causing damage than others. So decide which types of animals you’re willing to allow, as well as the number of each and the total number of pets permitted. Will you allow more than one dog? How many cats? Would ten guinea pigs be too much? Put all of this in your lease agreement, as well as:

A statement that allows you to forcibly remove any pet that becomes aggressive or dangerous.

A clause that gives you the power to change your rules on pets, if it’s done with a proper notice period (in case you decide not to allow pets in your properties anymore).

The consequences for violation of these rules, like additional fees or eviction.

Lastly, you should have a “pet addendum” attached to the lease. This includes specific details about the pet that you are allowing in the rental, and states that any other animal that isn’t registered in the lease is considered an illegal occupant and a breach of contract. If they get an additional dog or replace a previous pet that passed away, they need to have their new pet cleared and registered again.

And make sure it’s clear what you expect from the pet owner in terms of responsibility for taking care of their animal. So also consider adding these provisions to the lease or pet addendum:

They must keep up with the required shots, licenses, and tags for the pet.

They must register any pet with you, the landlord, prior to taking them in.

They must resolve and pay for any harm done to anybody or anything by the pet.

They must take care for and clean up after the pet on a daily basis.

When outside, they must keep the pets on a leash or in a cage (depending on the animal).

They must acquire insurance with liability coverage for their animal.

Check Your Insurance and Liability

Check the coverage of your insurance policy before considering tenants with pets. What is the amount of liability coverage in the policy? Are there any limitations, exclusions, or requirements for this coverage? Will they use the list of “dangerous breeds” as a basis for breeds that aren’t included in the insurance?

Charge Additional Fees

Since there is more risk involved when renting to pet owners, you can either add a pet fee on top of the monthly rent, or simply increase the monthly rental fee. Some landlords charge anywhere from $25-$100 per month, per pet, on top of the rent, and they also sometimes charge a pet processing fee (up to $500) when screening applicants with furry friends. Just be careful not to charge anything for emotional support animals.

Some states also allow you to collect a separate security deposit, called a “pet deposit.” In some states, there is the option to make the pet deposit non-refundable. However, there are states, like Michigan, where the maximum security deposit is only two months’ rent. You need to know the maximum allowable amount of your state and evaluate if this will be enough to cover for pet-related damages which could occur in your property.

Decide Case-by-Case

Just like any other tenant, make sure you screen the tenant’s background thoroughly. Apart from their financial and credit history, also check their references and ask about their experience with how the tenant managed their pet. Not all pet owners are equally well-trained and equipped to look after their pets!

When interviewing them, make sure you ask:

Does the pet have the proper vaccinations and licenses? Is it neutered or spayed?

What breed and how old is the pet?

Has the pet ever caused damage to items or bitten anyone?

Who will be responsible for caring for the pet?

How do they plan to take care of the pet on a daily basis?

What is their occupation? (A doctor would have to leave their pets unattended for longer hours than a stay-at-home mom would)

Who will care for the pet when they’re not home?

You should also request a recent photo of the animal to keep for your records, and can even ask to meet the pet in person prior to approving their application.

So, now that the risks, benefits, and processes for allowing tenants with pets have been laid out, it’s your time to make the decision. Will you open your doors to the pet-loving community?

As a final thought, be mindful that a Fair Housing Law protects disabled people who need an animal for their emotional wellbeing and/or physical safety. The term “disabled” now includes not only the blind or paralyzed, but also those with clinical depression and post-traumatic stress. You can request a note from their physician to verify their condition and need for animal assistance to keep things documented.

Do you allow pets in your rentals? Why or why not?