Pets Caught in Foreclosure -- Landlords Can Help

Landlords can help foreclosed-upon families by accepting tenants with pets -- it's good for business if you follow some simple steps to protect yourself.

The foreclosure crisis has affected not only homeowners, but their pets, too. Suddenly faced with the need to find a rental, many ex-homeowners are turned away when prospective landlords say, "No pets." The result? Shelters are flooded with family pets that can't find homes.

If you're a landlord, maybe it's time for you to rethink your policies. Accepting tenants with pets is good for business if you follow a few simple steps to protect yourself.

The Foreclosure Crisis: Pets Are Victims, Too

Many families hit with foreclosure must rejoin the ranks of renters, looking for housing that meets their households' needs. It's hard enough finding the right neighborhood close to schools, transportation, and work, not to mention a rental with enough room for the possessions that once filled a single-family home. Add a pet or two to the mix and the number of possible rentals suddenly goes way down.

The problem is that many landlords, fearful of damage, noise, or liability, automatically say "no pets" when advertising their rental. When the rental market is tight -- as is true in areas hard hit with foreclosures -- landlords can be picky and still fill their vacancies.

Faced with the prospect of nowhere to live, many ex-homeowners must give up their pets. Shelters in many parts of the country have reported a surge in drop-offs, with some dogs and cats arriving while the moving van idles in the parking lot. These are generally well-cared-for, socialized animals, who would be snoozing on the living room couch or romping in the yard with the kids but for their owners' financial mishaps.

Does it make sense for landlords to categorically turn these families away? From a business perspective, let alone a humanitarian one, it just might not.

Allowing Pets in Rentals: It's the Right Thing to Do

Even if you don't normally rent to pet-owning tenants -- after all, it's a potential hassle, right? -- you might want to consider changing your policy, at least for a while. The current foreclosure crisis, which is forcing homeowners back into the rental market, is unprecedented. Many experts estimate that three million U.S. households could find themselves in foreclosure within the next year or two. It's a staggering number.

Losing a house is more than a financial loss. It's emotionally wrenching to lose the home you've worked for and invested in. Children may be uprooted from their neighborhood and their schools, often in the middle of the school term. In stressful times, pets often cushion the emotional upsets, especially for children. Surrendering the family pet to a rapidly filling shelter, with no guarantee that it will ever find a home, can be a huge blow.

Rent to People With Pets -- And Get Better Tenants

Landlords who accept pets often discover that they end up with more responsible, rule-abiding tenants than those without pets. It's not hard to understand why: Knowing that the number of rentals open to them is limited, many grateful pet owners take pains to make sure they stay in their landlord's good graces.

Five Tips for Landlords Who Accept Pets

Rental property owners should always do some simple investigation into the pet and the pet ownership habits of the owner before saying yes to the tenant. No matter how heart-rending the story, you don't want irresponsible owners or a pet that turns out to be dangerous or destructive.

Here are five suggestions to help protect yourself and keep maximum flexibility, so that if you later change your mind, you can end the rental relationship as quickly and easily as possible.

Screen the pet. You should apply the same scrutiny to a prospect's pet as you would to the prospect. Get information from veterinarians, neighbors, trainers, and others who are familiar with the animal. A responsible pet owner will be happy to provide pet references. Use the San Francisco Humane Society's "Guide for Landlords" (available at for forms, interview questions, and checklists of questions to ask prospective tenants.

Establish reasonable pet policies. Just as you have house rules covering the use of the common facilities, parking, and the like, you should also have a pet policy that outlines your expectations when pets live on your property. (For suggestions on good pet policies, read Nolo's article Smart Landlord Policies for Pet-Friendly Rentals.)

The San Francisco Humane Society's Guide, mentioned above, gives suggested pet policies that are fair to everyone: the tenant, other tenants living on the property, and the pet itself. Refer to your policy in your lease or rental agreement, attach the policy to the document, and specify that repeated and serious violations of the policy will be grounds for eviction.

Collect an adequate deposit. If the pet causes damage and the tenant does not voluntarily pay for it, you'll need to cover it with the security deposit. In most states, the size of the deposit is limited by law, usually to two months' rent, and any pet deposit must fall within this limit. Other states allow landlords to collect an additional pet deposit, and still others don't regulate the size of the deposit at all.

Find out how much you can legally collect, and ask for the highest amount that is reasonable. You may want to offer to return some of it in a few months if your new tenants and their pet prove themselves to be law-abiding and careful with your property. (To find out the maximum deposit you can collect in your state, read Nolo's article Chart: Security Deposit Limits: State by State.)

Consider requiring renter's insurance. Renter's insurance will cover the claims if the tenant's pet causes damage or injury. For example, if you have to refinish a hardwood floor because of pet damage, you could submit a claim against the tenant's policy if the tenant can't or won't pay, or if the deposit isn't sufficient. If a pet injures someone, the policy will normally cover the cost of a claim. Not all states allow landlords to require renter's insurance, however, and not all policies extend coverage to pet-inflicted injuries. Check with your insurance broker and read the policy yourself to make sure.

Offer a month-to-month rental agreement, not a lease. If you're still wary, make it as easy as possible to end the tenancy if things don't work out. With a month-to-month rental agreement, you can end the tenancy with notice -- 30 days in most states -- and you don't have to have a reason. With a lease, you have to wait until the term, typically a year, is over. (To learn more about the difference between the two, read Nolo's article Whether to Use a Lease or a Rental Agreement.)

Of course, in both situations you can always terminate "for cause," and serious pet rule violations certainly qualify as just cause to terminate. But if your tenant won't leave and you've terminated for cause, you'll have to produce evidence of the misbehavior in an eviction lawsuit and convince the judge. With a 30-day notice delivered to a month-to-month tenant, as long as you've delivered the termination notice correctly, you don't have to prove any tenant (or pet) misbehavior. Of course, you may not terminate for a retaliatory or discriminatory reason.

For more information on finding great tenants, understanding the security deposit rules in your state, drafting month-to-month agreements, and everything else you need to know as a landlord, get Every Landlord's Legal Guide, by Marcia Stewart, Ralph Warner, and Janet Portman (Nolo).

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