Once a landlord makes the decision to reach a larger pool of potential tenants by allowing pets, the next decision the landlord needs to make is how to manage the risk of damage to their rental property by the pets. Charging a "Pet Deposit" may seem like a good strategy; however, there are flaws with this strategy and better alternatives.
The problem with charging a "Pet Deposit" is illustrated in the following example: Let's say a landlord normally charges a $1,000 security deposit. If a tenant has a pet, let's say the landlord charges an additional "pet deposit" of $300. Now let's say that when the tenant moves out, the pet has done $800 worth of damage to the property. Since the "pet deposit" was only $300, the tenant will make the case that they are entitled to a full refund of their $1,000 security deposit and that only the "pet deposit" of $300 can be used for the damage caused by the pet. The leaves the landlord short by $500.
A better solution for the landlord in the above example would simply be to charge a larger security deposit to tenants with pets instead of a "pet deposit". If the landlord in the above example charged a $1,300 security deposit (instead of a $1,000 security deposit and a $300 "pet deposit"), the full security deposit of $1,300 could be applied to any damages cause by the pet or anyone else.
There is really no upside for a landlord to charge a "pet deposit". To get the extra security, without the limits of a "pet deposit", a landlord should simply charge a larger security deposit.
