Can I Charge A Nonrefundable Pet Fee? Or What About Charging a Higher Pet Rent for the First Month?

I recently received a question from a client asking whether she could legally charge a nonrefundable pet fee of $150 or a more significant pet rent of $150 for the first month (with all subsequent pet rent being $50). It was an interesting question. Below is the thought process I used to analyze and provide my client with an answer.

We already know that a landlord cannot charge a nonrefundable pet deposit. My previous blog post explains why.

No one can say with 100% certainty whether my client’s proposal would be acceptable because no Wisconsin Statute or Administrative Code Provision is directly on point. Further, as far as I know, no case law in Wisconsin addresses this issue. Finally, I am not aware that a trial judge has provided a ruling on this topic. Even if a circuit court had made such a ruling, while interesting, it would not be precedent nor binding on the State or even another circuit court.

Based on my experience and prior dealings with the State (DATCP and/or the Attorney General’s office), the State would view what my client proposed as not being allowed and could result in her being investigated and possibly fined. While I often disagree with the State’s views on things, in this situation, I would have no “law” to support my argument against the State’s probable view that you cannot charge a nonrefundable pet fee or a more significant first month’s pet rent.

A decent argument could be made that a one-time pet fee is nothing more than a nonrefundable pet deposit. In an earlier blog post, I explained that a “pet deposit” meets the definition of a “security deposit,” and by definition, a security deposit cannot be nonrefundable.

So I asked my client, if the State were to investigate your practices on this issue and ask what that first month's pet charge of $150 was used for, how would you respond? She replied that she would answer that she charged the up-front pet fee or made the first month’s pet rent larger than the subsequent months because pets can quickly cause damage to a rental property. Additionally, she indicated that if a tenant were agreeable to paying this amount, it would prove that the tenant was serious about keeping a pet.

Based on my client’s first response, I explained to her that the State would more than likely respond that the purpose of charging a pet deposit is to cover potential damage to the rental property caused by the pet. And because a pet deposit must be refundable if there is no pet damage to the rental property, then it would need to be returned to the tenant, and so by her charging a nonrefundable pet fee, it was no different than charging a nonrefundable pet deposit, she just referred to it by a different name.

I explained that since what she was proposing was uncertain at best and since most landlords want to avoid being investigated by the State, it would be much safer and perfectly legal for my client to take the pet fee of $150 instead and divide it by 12 (months), and add that amount to the monthly pet rent. This would increase the monthly pet rent by $12.50, which hopefully wouldn’t be so large as to cause a potential tenant not to rent from my client.

I further explained to her that if she did not want to increase the monthly pet rent, another option that would accomplish her goals of covering any pet damage and demonstrate that the tenant was serious about wanting a pet would be to make the $150 a refundable pet deposit (or perhaps my client should even consider raising that amount since pets can cause a lot more damage than $150 in a matter of minutes). But more importantly, I explained to her that by charging a refundable pet deposit, she would know with certainty that what she was doing would not run afoul of Wisconsin law and would keep the State out of her hair.

I also advised her that since a pet deposit can only be kept if a pet damages the rental property, some clients raise the security deposit amount for tenants with pets rather than charging a pet deposit. The reason for doing this is that a security deposit can legally be retained to repair or replace any damage, waste, or neglect, regardless of whether it was caused by a pet, and can also be kept to cover rent that was not paid. Nothing is more frustrating than having to return a pet deposit to a tenant because there was no pet damage when that same tenant owes you past due rent or caused damage himself/herself to the rental property, far exceeding the tenant’s security deposit.

I encouraged my client to consider charging an additional security deposit to tenants with pets rather than a pet deposit, as doing so would allow her to retain the deposit, if legally entitled, for non-pet damage, past-due rent, and other amounts allowed to be deducted from a tenant’s security deposit.

Safe Landlording.

T