Who keeps Pet fees? PM or owner?

Question

For a one time non-refundable pet fee charge, who should keep that fee? Property Manager or owner?

Nathan Grabau · Answer

Hi Sophia,

My property manager charges a monthly pet rent, that I keep(minus PM's 10%) as the owner. I think this makes a lot of sense because pets cause accelerated wear and tear to the property that may not be justifiable as a one time charge to a deposit. One example of this could be carpet wearing out faster. The pet rent just covers wear and tear though and if the pet ate the trim or left a permanent stain the tenant would be charged. The "pet rent" also then increases the security deposit because the security deposit is one months rent. The property manager then takes their 10% out of the pet rent as if it were normal rent, paying them for providing the service. Hope this helps!

Account Closed · Answer

Who owns the property? Who suffers the damage?

Iman Miley · Answer

Hi Sophia,

Our company collects the pet fees, which typically total $300 for the year, and in turn owners are provided a pet warranty that allows them to access up to $2000 of funds for damage deemed by pets. They don't have to worry about going into their security deposit or own pockets to cover the damage.

If your PM offers something along these lines, I would understand for the pet fees to be collected by them. I would ask further into their reasoning for keeping the pet fees and how that benefits and protects your property in the long run.

Nathan Gesner · Answer

If the PM Agreement does not specifically state who keeps it, then it should go to the one carrying the risk. In this case, the owner carries the risk of damage so the owner should have the final say on accepting animals, how much to charge, and who keeps the money. If you charge $50 a month, the PM would keep a percentage of that as their management fee but nothing else.

When a PM keeps the animal fee or rent, it's usually in exchange for some protection to the Landlord. For example, I could keep the $50 monthly pet rent and in exchange for that I would offer to cover up to $2,500 in pet damage to the Landlord. I can do this because I have 150 pets at $50 per month or $90,000 annually and I can use that pooled money to cover torn up carpet or cat odors.

The fee is for protection. He who carries the risk keeps the fee.

Vanessa Regalado · Answer

@Sophia Bahena every property management company runs operations differently. Some pass the pet fee to the owner and some others keep it. In our case, we pass it to the owner. There is no right or wrong about this. Like some mentioned here look at the pros and cons being offered by your PM. @Iman Miley makes a good point. They keep the fees but the owner gets a warranty fund of up to $2000 in potential damages.

Nathan Gesner · Answer

Sophia, this should be spelled out in your property management agreement. I pass all pet fees to the owner. I know some property managers that retain all the pet fees for themselves. There is no standard so you will have to read your contract.

Joe Norman · Answer

As many have stated, there is no standard when it comes to Property Management Fees. That said, my thought is that if it isn't spelled out in the property management agreement as a fee that gets passed on to the owner then by default it is kept by the PM.

Matthew Crivelli · Answer

Depends on the small print. If you're asking this question I have a feeling the PM is going to end up keeping the fee. Look through your contract for the answer.

Brian Briscoe · Answer

Pet fees are in place at our properties to offset the costs associated with having pets in the units - pets do a lot of damage to properties and we do maintain certain amenities at the property specifically for pets. In a few of our properties, we've added pet-friendly amenities and the increase in rents/fees (whatever you want to call them) is our part of our ROI on amenitizing.

It does need to be spelled out in your agreement who gets these fees.

Greg Weik · Answer

We keep pet fees.  One time, non-refundable $250 per pet.

It is very important to spell out in the management agreement, who can keep what fees.  Front-end communication usually can solve for problems like this.  I would say if it's not in your agreement, then pass the fee to the owner as the cost of your education.

Security deposits are designed to cover damage, whether from people or pets. Pet fees are fees - I disagree that they are designed to cover damage from pets.  What is $250-$300 really going to cover anyway?  Pet damage, if present, is typically considerably more expensive to address.

Who has to coordinate all the turnover work?  I think it's the property manager.  The landlord only decides to allow pets for 1 reason and 1 reason only:  reduced vacancy time.  So if the landlord is benefitting from reduced vacancy time, and the PMC ends up left with potentially more work at turnover, it makes sense to me that the PM can keep a pet fee.

Ultimately, excellent tenants are also excellent pet owners.  We don't see move-out pet issues from tenants with high credit scores.  It just doesn't happen (at least not in my 15 years and thousands of turnovers.)

The PMC keeping pet fees should allow the PMC to keep their management fees lower also (in theory, anyway).  If the PMC has a revenue stream from tenant's pets (and the tenants expect to pay a pet fee), those funds do not come out of the client's pocket.

Another reason to have the PMC keep the pet fee is that increasingly - at least in Colorado - ESAs have taken the place of pets.  No fees can be charged, no restrictions placed on breed, size, etc. For any PMC that is dealing with ESA turnover, having them keep pet fees offsets some of that additional work for which they are not compensated (namely, ESA tenancy turnovers, where there may be animal-damage-related work that needs to be coordinated.)

Who keeps Pet fees? PM or owner?

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