The biggest renters are millennials and senior citizens, and research on both these demographics have shown they also have a high likelihood of owning pets. If you're a landlord who wants to take advantage of this growth, here are 5 tips for making a move towards a pet-friendly property.
Despite the growing number of renters with pets, many landlords adhere to a no-pet policy, and that's okay! Owners who have added a pet amendment to their lease agreement believe that a broader tenant pool, reduced tenant turnover rate, and increased income are encouraging reasons to make a change.
- Broader tenant pool. Many people own pets. When other properties have a strict no-pet policy, you get this valuable market of qualified tenants.
- Reduced tenant turnover rate. Tenants stay longer which helps provide stable income and remove the hassle of finding tenants.
- Increased income. Depending on state laws, landlords can charge higher rent, pet deposits, or pet rent.
5 Steps Towards Making a Pet-Friendly Property
Landlords who do manage pet-friendly properties can benefit from a detailed pet agreement or addendum to a lease. This serves to reduce their risk and make tenants responsible for their pet. Furthermore, with pet agreements, tenants must agree to indemnify the landlord for pet-related damage to the property. A pet agreement as part of a lease can also be signed by non-pet owners in the event they adopt a pet in the future.
68% of U.S. households are pet owners according to National Pet Owners Survey conducted by the American Pet Products Association (APPA).
1. Determine the Types of Pets Allowed
Though many common household pets should be fine on property, you must specify in your pet agreement which types and breeds you will allow because not all breeds are covered by insurance companies. For example, some policies refuse to cover specific breeds that are labeled as “dangerous", such as pit bulls, while others may charge a higher premium. Because your lease is your protection against pet-related issues, clearly define the species, breeds, and weight limits that are allowed and not allowed on property.
In addition to clearly stating your rules on the lease agreement, it is also a good idea to meet a prospective tenant's pet before signing a lease to observe the pet’s temperament, health, and behavior.
Shelters like the SPCA require written landlord approval before tenants can adopt a pet.
2. Charge a Pet Fee or Deposit
Allowing pets on property can mean higher profits, but before implementing a policy of charging pet fees, pet rent, or pet deposits, know your state laws. In some states, such as California, the total of the deposits—security deposit, pet deposit, or pet fees—cannot exceed the state limit. In some cases, pet deposits may not be the best choice because they are limited by how they can be used.
Nolo states that if a dog is well-behaved, but the tenant is the source of property damage, a landlord cannot use the deposit marked for pets. Because of this, many landlords choose to charge higher rent if they are not prohibited by regulation or rent control.
Read More: What Should a Landlord Charge for Pets?
Service and assistance animals are not considered pets. Landlords cannot deny a tenant a lived-in service and assistance animal, nor can they charge pet fees for them. According to The Fair Housing Act (FHA), landlords can charge a security deposit and seek money from the tenant if there is any damage to the property caused by the animal.
3. Define the Pet Owner's Responsibilities
Before signing a lease, clearly state in the pet agreement that tenants are responsible for their pets and are liable for any pet-related damage, loss, or injury. Some states and municipalities require pet owners to vaccinate and obtain a license for their pets, so inform your tenants that their pets, especially dogs, must wear identification tags. To ensure a safe and clean property, you should require tenants to clean up after their pets, maintain full control of their pet, and to not leave pets unattended without a leash.
4. State Your Right to Change the Pet Agreement
It is your right to amend the pet agreement at any time with reasonable notice (typically 30 days) but include this language in the lease. However, you should be mindful about the pet ownership rate in your area. Make an analysis of the local market to determine if a no-pet policy will affect your bottom line. Do many renters own pets? How many competing properties allow pets on property? If you decide to adopt a no-pet policy, you may run into problems with current tenants who already own pets. If this is the case, consider adding a grandfather clause to retain existing tenants.
5. Elements to Include in Your Pet Agreement
What exactly is included in a pet agreement? Below are the common provisions you may find in one:
- Names of parties involved, such as the landlord and tenant
- Address of the premises where the pet will live
- Description of the pet, such as the name, breed, gender, age, and weight
- Pet deposit, pet fee, or pet rent, if any
- Date of original rental agreement
- Pet owner’s responsibilities
- Types of pets allowed
- Max number of pets
- Pet license number
In addition to your own insurance and tenants’ renters insurance, adding a pet agreement to a lease provides an extra layer of protection to you. Look for well-written pet agreement templates or consult a legal professional about drafting one for you. Allowing pets on property can be a wonderful addition for both the landlord and tenant, but ensure your tenants understand their continued tenancy depends on honoring your pet rules.