Non refundable pet fee

[leedahlg]

Hi all
When selling, is the pet fee treated the same as the secruity deposit , and forwarded to the buyer?

 

[kfort]

What province? Here in SK if it says "fee" it is not returned ever. If it says "deposit" it is.

 

[leedahlg]

Thanks for your response
I was thinking the same , but the realtor has it written up that we have to forward it to the buyer. It is in Sask. It's not a huge amount, but why give it away if you don't have to!
Thanks again!

 

[kfort]

There was a recent star pheonix article on "pet rent" "pet fees" etc. few months back. Can google it if you like

Can be written up however you wish but fees are not returned to the tenant here. Deposits MAY be (depending on condition and what the deposit was for)

 

[Sherilynn]

Whose realtor wrote that? In the listing or in a purchase contract?

If the buyer's realtor wrote it in the contract, you don't have to accept the term. If your realtor is writing it, you should have a chat with him about it.

 

[leedahlg]

You may have misunderstood what I was asking.
The situation that we are in is that we are in the process of selling , and the pet fee tha

Whose realtor wrote that? In the listing or in a purchase contract?

If the buyer's realtor wrote it in the contract, you don't have to accept the term. If your realtor is writing it, you should have a chat with him about it.

 

[leedahlg]

Thanks Sherilynn, it was my realtor and I will have a talk with him!

 

[Sherilynn]

Good. Perhaps your realtor doesn't understand the point of a non-refundable pet fee.

The point is the pet may cause extra wear and tear to the property, which reduces the visual appeal and value of the property, but - of course - isn't chargeable when the tenant leaves (or when you sell the property). The pet fee is your compensation for the non-chargeable repairs you must do for extra wear and tear and/or the slightly reduced rent or sale price resulting from wear and tear.

 

[Matt Crowley]

^ Sherilynn, that is the argument I would make as the seller of the property. I may argue that the pet fee is part of the administration costs of screening the animal and is fully earned upon move in.

If I were the buyer of the property, I would say that the non-refundable pet fee is really collected because "the pet may cause extra wear and tear to the property" which is really a current liability which is offset by the non-refundable deposit. While the damage is accumulated and unremediated during the tenancy, it is never actually resolved until the tenant moves out. Although the deposit is non-refundable, it is still unearned. The whole purpose of the deposit is to offset the cost of remediating the potential damage, which is not actually repaired until move out. In effect, the pet deposit is a prepaid asset account that offsets a current liability being pet damage.

Both sides have merit I couldn't find a good court case to point you to but it's just negotiation anyway, not a court argument.

 

[Sherilynn]

While I see your point, Matt, I think it would be difficult for a buyer to argue there was no extra wear and tear already incurred, potentially causing a slightly lower sale price and therefore warranting the seller keeping the fee.

It is the buyer's choice whether he buys the property in its current condition and with the current tenants (and their pets). The buyer shouldn't receive compensation for that choice.

 

[leedahlg]

All good points.
It's nice to hear both sides !