Costly Security Deposit Mistake

Non-refundable pet deposits can actually cost you money

by Bill Gray

The way in which you explain, or dont explain pet deposits can cost you profit.

If landlords could spend just one day as a professional collector attempting to collect tenant debt, one of the top objections they would hear from previous tenants is about pets and pet deposits.

The urine spots on the carpet are covered by my pet deposit is one example of a tenant either intentionally or unintentionally misunderstanding the pet deposit. Many pet deposits are non-refundable. (Please note: non-refundable deposits may be illegal in your state.) If this is not fully explained at lease signing, most likely the tenant will believe that the pet deposit is no different than the standard deposit he placed on the rental unit.

Most tenants understand that when they pay a rental deposit any damage they cause to the unit will be deducted at move out from their deposit. If the non-refundable pet deposit is not fully explained, the tenant considers it the same as the rental deposit.

So when Fido has several accidents and soils the carpet, the tenant often will guesstimate that his pet deposit will cover the cost of cleaning it. In reality the cleaning cost is deducted from his refundable deposit. Imagine the difficulty a professional collector has on the telephone trying to explain the difference between a non-refundable pet deposit and refundable rental deposit.

This is not to say that a certain percentage of previous tenants have a convenient memory when it comes to the terms of the lease. But I do believe that a good share of landlords do not take the time to fully explain the terms. An initialed and signed pet addendum will go a long way in settling disputes after move out.

Use a clear, understandable pet addendum and explain it clearly before the new tenant initials and signs it. Doing so will save you profit by reducing tenant debt when the tenant moves out.
Copyright 2010 Bill Gray

Bill Gray is a tenant debt collection specialist, which makes him a tenant screening specialist. For tenant debt concerns, email him at [email protected]. Visit Bill Grays blog at

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