Newly acquired property, do i charge a new pet deposit?

Question

I recently closed on a duplex and one of the current tenants has a dog.  They paid the previous owner a non refundable pet fee.  I am wondering if I should charge another pet fee for myself as well!

Also they have previously been on a week to week lease agreement but they have been paying bi-weekly with permission from the previous owner.  They'll be signing into my 12 month lease term this week and I want to make sure that all of my bases are covered.

Brooks Rembert · Answer

The security deposit and pet deposit should have been transferred to you from the previous owner. I'd hit him up for it if he/she didn't pass it on to you.

Randy Johnston · Answer

Check your state's laws about what additional charges you can place on tenants that were not already in place when you purchased the property. I'm pretty sure that in most states you cannot require a tenant to pay additional deposits or fees after the fact, unless the previous landlord returned the security deposits to them. As you stated, you knew what you were getting into during escrow.

The tenants are not dictating anything to you, they signed their rental agreement in good faith with the previous landlord and even though the property has changed hands, they are still protected under the previous agreement, which cannot be changed.

You can always ask the tenants to sign a new agreement, but they're not required to do so. And, I'd be very careful about trying to pressure them to sign it (such as threatening to evict them) as that will get you in trouble in a heartbeat and will cost you more the you can possibly receive in from the deposits.

Again, check your state's laws to see what you can do legally.

Ivan Burley · Answer

Hey guys been a little busy with work So I'm just getting around to responding.  Firstly thanks for all of the input.  Secondly I think there may have been some misunderstanding as to what I was asking.  Seems like some think I hadn't done my research and was suprised by the lack of deposits.  That's not the case.  I was fully aware that there were no deposits taken by the previous owner.

my concern was wether or not it was customary during a take over to charge a fee for a current pet.  Regardless if they have paid a fee to the previous owner the hypothetical damage caused is mine problem to deal with.  I agree it's not there fault that the property changed hands as it is not my fault that the previous owner did not charge a rental deposit.  A deposit that I will be charging with my new lease.

I believe I know how to handle this situation I appreciate everyone who took the time to comment.  Everyone operates differently and I think there is no one size fits all answer.  I'll try it my way and if it doesn't work I'll adapt.

Jeremy Tillotson · Answer

I was going to post but @Randy Johnston already did, I echo him. Put yourself in the tenants shoes and asked how you would feel, and what impression that would give them of you. Of course with a empty building you can make new policies, providing they dont request there deposits back, if they proofed they paid them, you could really be forking over some monies. Just my .02

Joey Wharton · Answer

Personally I think the best coverage is a Renter's policy. It covers not only damage their pet does to the property, it covers dog bites too, and a slew of other things tenants wouldn't be covered for. I used to charge pet deposits, but now I offer to waive it in lieu of renters insurance as long as pet / tenant damages are included the policy. Its a great incentive to get them to buy and honestly a great thing for tenants to have for their own sakes. Once they're aware of everything it covers, and the fact that my insurance doesn't cover their stuff in case of fire, etc., they WANT to get it. Win / Win.

Michaela G. · Answer

In addition, I would think that a 'non refundable pet deposit' is for things that have to be done upon move-out of the tenant with pet: Flea-treatment, deodorizing, carpet shampooing etc - things that will have to be done, above and beyond normal move out, due to the tenant having a pet.

Subsequently, just like a deposit, this should have been turned over to you at closing, for those tenants, who have not moved out.

I would do some research on that and then go back to the closing attorney, who should have known.

Just like the deposit, it's only supposed to be utilized upon move-out. The different being that the non-refundable fee will never be returned, but the deposit might be, depending on move-out condition.

Michaela G. · Answer

And sometimes it's better to look at the big picture than to be a stickler with the little things. Good luck!

Ivan Burley · Answer

@Michaela G.  I understand your personal feeling on the matter, but I keep my feeling out or my business decisions.  I was aware that there were no deposits taken as was evident in escrow.  I believe it wouldn't be wise for anyone to allow tenants to stay in their property without a rental deposit.

My main concern is a pet deposit.  To you point on changing terms, if a previous owner made many errors in their management practices it is my responsibility to correct these errors.  The tenant can get as upset as they'd like.  They have the option to move or stay.  I'd much rather have a tenant that agrees with my terms, which are very fair by the way, then to risk serious financial strain in order to keep a flawed program in place for a tenants comfort level.

Maybe it's because I am new to things but I can't see myself ever letting a tenant dictate terms to me through the fear of vacancy.  I believe my market is stron enough that I'll find another renter fairly quickly.  I wouldn't deliberately push a good tenant away but my terms are my terms.  The terms the tenant has were with the last owner.  When the home was sold I have the right to change them.  Their lease was on a week to week basis.  It is renewed each consecutive week as long as both parties agree.

Michaela G. · Answer

Also consider how easy or hard it will be to find new tenants, if your tenants leave.

I personally would be pretty ticked off, if my landlord sold the property and the new owner would want to change my terms. I would probably move just out of principal.

Yes, I'm stubborn, but I once moved, when an owner tried to charge an extra $ 25/month, because I got a slightly larger dog, after my original dog had passed away. There was no pet fee before. I'm sure the empty apartment and turnover cost her more than the extra $ 25 would brought in for her.

When you bought the building, if you had done your due diligence, you knew that you were taking over tenants without deposits (unless the seller lied about that), so, that should have been part of your consideration and you should have weighted the pros and cons and worked it into your purchase price.

Personally, if these have been good and stable tenants, I would not want to rock the boat, because the vacancy and turn-over work can easily cost more than the extra deposit.

Ivan Burley · Answer

@Andrey Y.  Those were my exact thoughts.  That's why I was saying I really don't want to allow another pet, but that would be a way of getting a pet fee.

Newly acquired property, do i charge a new pet deposit?

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