Transferring Pet Fee?

Question

I am selling one of my rental properties. The current tenant paid a $600 pet fee (2 pets @ $300 each). The lease calls this a pet fee, not a pet deposit, and states it is non-refundable.

The buyer has rightly requested that the tenant's security deposits be transferred. Of course, no problem there. But they also asked that the pet fee be transferred. I have two questions related to that:

1. I believe I am correct in denying that request to transfer the pet fee. It's not a deposit. It's non-refundable. It's a one-time fee for the privilege of having a pet. What do you think?

2. I will be assigning the current lease to the buyer, which goes through the end of next April. Can the new owner charge the tenant a new pet fee when they take it over? I don't think they can as long as the current lease is in effect. If they sign a new lease with the tenant after the current lease expires, can they charge a new pet fee then?

Chris Eaker · Answer

Thank you @Tracy Streich and @Josh July.

William Robison · Answer

We charge a non-refundable pet deposit....at sale or transfer, that passes to the new owner.  Its to cover damages potentially at move out caused by that pet.  It wasnt necessarily income at the onset.  We keep the non-refundable peet deposit in an account for the owner, and only distribute that fund at turnover.

Josh July · Answer

I would just transfer it since it's not that much money and it would save time and money arguing about it. FASTER CLOSE=the faster you get your money to invest somewhere else

Tracy Streich · Answer

You are correct.   It is a fee paid up front.   However, you are doing it to protect yourself from pet damage.   You call it a fee to make it non-refundable.   That is fine we do that as well.   However, I can see how the new owner might see this a unfair to them because they now have not financial protection from the pet.   You keep the money and they get the potential problem.  If they are agreeable with you keeping in fine.   However, does this problem create a deal killer for them?   Maybe if you offer to prorate the fee it would help.  With that in mind it really is yours to keep but just be fair with your buyer to keep the deal moving if you really want to sell it.

They cannot charge a new fee unless the lease states the owner can add fees with a certain notice.