Do nothing. When the lease comes due, raise rent to a level that makes you happy to have the tenant and their cats.
If you approach the tenant about their pets, you will find that those pets become Emotional Support Animals instantly. You can't get rid of the animals by law and it's now more complicated to raise rent or get rid of the tenant.
Say nothing about the cats and just raise the rent on renewal.
If you call it pet rent or just a rent increase, it has to be under the rent control limit. In this case, raise the max and also increase the security deposit. California allows 2X monthly rent as a security deposit. Most people ask for 1X rent and not 2X for a deposit. Therefore, raising this from 1X to 1.5X can help with potential damage and raising it 2X can help get the tenant to leave if that is what you want.
Very interesting I was not aware of the 2x rent for security deposit.
He is a good tenant I don't want him to leave, but his rent is way under market and I just started to raise his rent last year 5% and I will raise it 5% on the next lease renewal.
Can I raise the deposit to what 2x his current rent? Or I just have a deposit from what he paid 4 years ago?
I mean can you increase the deposit as you increase the rent or is that the normal?
Very interesting I was not aware of the 2x rent for security deposit.
He is a good tenant I don't want him to leave, but his rent is way under market and I just started to raise his rent last year 5% and I will raise it 5% on the next lease renewal.
Can I raise the deposit to what 2x his current rent? Or I just have a deposit from what he paid 4 years ago?
I mean can you increase the deposit as you increase the rent or is that the normal?
@Maggie W is in CA, which allows for 2X rent security deposit. Assuming your unit is in AZ, it looks like the max allowed is 1.5X rent. Generally you are allowed to raise the security deposit to match the rent increase, but few people do it. AZ may have laws against it, but I doubt it.
It appears that AZ does not have rent control. Therefore, you can move the rent to market at any time (based on the lease). Depending on how much below market the tenant is, it may be best to just move it to market and if he leaves, find another tenant. Is he 10% under market or 35% under market? One you can move up slower at renewal, the other you just cut your losses and prepare for a new tenant.
Recently I charged a deposit of 2,500 for one cat. I love cats but a peeing cat can destroy everything. My thought is give the tenant a large incentive to make sure the cat does not damage anything. Assuming all goes well I refund the entire pet deposit. Also I require a note from the vet (cats on health, dogs on violence risk).