FAQ: Can I Charge a Pet Deposit in California?

INVESTOR FAQ SERIES

Yes, But It Counts Against the One-Month Cap

The following is not intended as legal advice. It is provided only for informational and entertainment purposes. Consult with an attorney for guidance on your specific situation.

By BRIAN BEAN
Rental Home Advocate | Property Manager | Real Estate Broker

Some owners of California rental properties charge pet deposits to tenants with animals. The real question is, does it make sense to do so?

Assembly Bill 12, enacted July 1, 2024, limits security deposits in many circumstances to the equivalent of one month’s rent. Some landlords and property managers can charge up to two month’s rent. But ALL deposit funds, regardless of their label, count toward the same cap, according to AB12.

What Counts as a Deposit

Under Civil Code Section 1950.5, security means any payment, fee, deposit or charge you collect at the start of a tenancy to cover unpaid rent, damage or cleaning. California counts pet deposits, key deposits and even last month’s rent as deposit funds held in security.

The label on the money does not change the math. Three separate charges that add up to more than one month’s rent are still more than one month’s rent.

Pet Rent Is Different

Monthly pet rent is charged as rent rather than held as security, so it is not calculated against the total deposit. Deposit funds are refundable and must be accounted for within 21 days of move-out. Rent is neither.

Assistance Animals Are Not Pets

Service animals and emotional support animals are not considered pets under federal and state fair housing laws. Landlords and property managers are not allowed to charge pet deposit or pet rent for ESAs or service animals, and pet policies do not apply.

Why We Skip Pet Deposits

When applicable, does a pet deposit make financial sense?

If you’re not able to collect additional funds for a specific protection, then labeling a deposit narrows the options for which those funds might be used. At Dream Big Property Management, we do not collect deposits for any purpose other than as a general “security deposit,” so that all of the funds can be delegated to any allowable resident-caused issue after moveout.

But check with your legal counsel for guidance on your property.

For more information about local trends in your rental market, contact us directly at Dream Big Property Management, 951-314-5402, brian@dreambigpm.com. You can also find valuable information on our website: dreambigpm.com.

Related Reading

Full Transcript

Transcript of the video above — Brian Bean, Broker/Owner and Rental Home Advocate, Dream Big Property Management. CA DRE #01346382. Lightly edited for readability.

Hey, Brian Bean here with Dream Big Property Management in Riverside, California. We help people just like you become intentional rental property investors.

One of the most common questions we get is, “Can I charge a pet deposit if my resident has a dog or a cat?” The short answer is yes, but the real question is, should you?

Yes, in California you can charge a pet deposit, but deposits of any kind are all considered the same and limited in total by Assembly Bill 12, which caps security deposits in many situations at the equivalent of just one month’s rent.

Before we go on, remember, we are not attorneys. This information is not intended as legal advice. We’re just here to give attention to important topics. Consult with an attorney for guidance on your specific situation.

Now, for many rental owners, AB 12 limits the amount you can collect for a deposit at one month’s rent, but it can increase up to two months’ rent in some situations. Prior to July 1, 2024, the caps ranged from two months’ rent for unfurnished to three months’ rent for furnished units.

California considers pet deposits, key deposits, even last month’s rent as deposit funds held in security. Siloing off deposit funds for narrow use cases might keep you from being able to fund repairs, because they aren’t related to pet damage or they aren’t related to replacing community facility keys. A plain old security deposit is broad-based and available for any allowable deduction. That’s why we stick to general security deposits and avoid pet deposits.

If you have questions about security deposits, or anything related to the right and profitable way to run your rental property, call me today, 951-314-5402. I’m happy to share. You can also find valuable information on our website, dreambigpm.com.

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