Elite AgentOPINION

Off the leash and on the lease – the pros and cons of pets in rentals

COVID-19 has sparked unprecedented demand for furry house mates. In fact, since 2012, more than 50,000 pets were adopted through animal shelters that work with Petbarn, with many of the adoptions happening during the COVID-19 lockdown. This surge has occurred at the same time state and territory governments have been reforming tenancy legislation to make it easier for renters to have pets. EBM RentCover Managing Director Sharon Fox-Slater discusses the pros and cons of allowing pets in rentals and the role landlord insurance plays.

Did you know Australia has one of the highest rates of pet ownership in the world? And did you know we have more pets (29 million) across the country than there are people (just shy of 26 million)? 

Social distancing, iso and #stayathome restrictions imposed to curb the spread of COVID-19 have also led to a huge spike in the number of people looking for a furry housemate for companionship.

The RSPCA has reported that 61 per cent of Australian households (or 5.9 million) had a pet in 2019, before a global pandemic swept across the globe bringing stay-at-home orders, self-isolation and social-distancing restrictions. 

COVID-19 led to a huge spike in the number of people choosing to share their lives with a pet – animal shelters and pet shops have seen unprecedented demand for furry companions – to bring comfort and joy to those who experience loneliness and isolation. 

The positives of having a pet far outweigh the negatives. According to Animal Medicines Australia (AMA), almost 90 per cent of pet owners say their pets have a very positive impact on their lives. 

The key benefits cited are love, affection and companionship – and more than 60 per cent of dog and cat owners refer to their pet as a member of the family.

AMA notes, about two-thirds of households without a pet would like one but are unable to do so due to barriers imposed by landlords, strata or body corporate rules. 

As many as 30 per cent of dogs and cats are surrendered to animal welfare agencies because their owners cannot find pet-friendly accommodation – and it has been estimated that just 10 per cent of rentals allow tenants to keep pets.

That means there is a huge demand for pet-friendly rentals.

Why should landlords consider going pet-friendly? Here are my top reasons… 

  • High demand – pet-friendly rentals often receive up to twice as many inquiries, providing a bigger prospective tenant pool
  • Lease faster – scarcity means properties are snapped up, reducing the time and costs associated with letting advertising
  • Less vacancy – rentals allowing pets experience shorter vacancy periods, limiting pauses in cash-flow for landlords, and providing time savings for agents in having to find new tenants
  • Higher rent – tenants with pets are often willing to pay up to 14 per cent more rent (according to Australian Companion Animals Association) and stay longer, providing steady rental income for the landlord
  • Excellent tenants – many landlords and agents will attest that responsible pet owners are often excellent tenants who abide by house rules, look after the property and may even be willing to improve the home at their own expense 
  • Increased security – the presence of a dog at a property can reduce the chance of it being burgled 
  • Improved tenant well-being – studies show pet owners are physically and mentally healthier, which could mean less chance of rent default and other issues for landlords and agents
  • Fewer ‘hidden’ pets – knowing there is a pet at the rental means agreements can be made about how the pet will be managed and the property maintained
  • Reduced animal surrender

Even before the surge in demand for pets brought about by COVID-19, governments across Australia were looking to reform residential rental legislation to make it easier for renters to keep a fur baby.  

Some landlords may be concerned about the cultural and religious implications for tenants at properties where animals have been allowed, insofar as some beliefs prohibit habitation in such places.

All state and territory legislation has the provision for pets to be refused on reasonable grounds. Cultural and religious considerations and health issues posed by allowing pets are likely to be permitted grounds for refusal.

However, for landlords and agents it’s probably more a question of how much is that pet going to cost in repairs to the rental.

The legislation
Traditionally, whether to allow a pet to live in a rental property had been totally at the discretion of the property owner (and the body corporate in strata properties). Landlords were free to decide if they would let their tenants have pets and, with the exception of assistance dogs or companion animals, there was little recourse if they said ‘no’. As a result, only around 10 per cent of rentals allowed tenants to keep pets. This is now changing, with many state and territory governments putting freedom of pet ownership on the rental reform agenda.

New legislation (March 20, 2020) gives tenants the right to have a pet. Tenants must still seek permission, but the landlord cannot unreasonably refuse.

Northern Territory
Since February 18, 2020, a tenant who wants to keep a pet must provide written notice to the landlord, who then has 14 days to object – and must have ‘just cause’ if they are to stop the pet being permitted at the premises.

Australia Capital Territory
Excluding pets in the tenancy agreement has been prohibited since 1 November 2019. If the landlord wants to refuse a pet, they must have reasonable grounds.

Western Australia
Giving tenants the right to have a pet is also being considered in the current legislative review. If and until amended legislation passes, tenants need landlord permission to have a pet. Note: WA is the only jurisdiction where a pet bond is legal.

Reforms under consideration include ways to make renting with pets easier for tenants, with refusal only permitted on reasonable grounds. Currently, tenants need landlord permission to have a pet.

New South Wales
Tenants do not need permission to have a pet but landlords can have ‘no pets’ clauses in the rental agreement.

FYI: The ability of NSW strata buildings to ban owners from keeping pets was challenged in October 2020 (with implications for renting), with the court ruling that the ban should be lifted.

The by-law against pet ownership was deemed oppressive because “it prohibits an ordinary incident of the ownership of real property, namely, keeping a pet animal, and provides no material benefit to other occupiers”. 

South Australia
Tenants need permission to have a pet at the premises. While no pet bond can be collected, landlords can ask for an agreement to be signed enforcing certain rules, and highlighting property management and maintenance conditions.

Renters need landlord permission to keep a pet and, if the landlord agrees, the tenant must arrange fumigation for the premises once they vacate. A separate bond for this cannot be collected, but it can be written into the lease agreement.

The pros and cons
Debate about the right of a property owner to decide how their premises is used aside, there are both pros and cons associated with allowing pets in rentals.

Fear of damage, odours and allergens is the leading reason landlords are reluctant to allow pets in rentals. Four-legged housemates might dig up the garden, scratch the doors and tear flyscreens and window coverings, have ‘little accidents’ on carpets, moult or get fleas that invade the premises.

There is also a chance the two-legged occupants (namely, humans) will damage the property too and, in our experience at EBM RentCover, that is far more likely. When it comes to claims for damage at investment properties, far and away the culprits have been human, not canine or feline. 

While WA is the only jurisdiction where a pet bond is legal, most tenancy agreements can include provisions for the premises to be professionally cleaned and/or fumigated when pets and their owners vacate.

Bond monies may be able to be used to cover the costs of cleaning if the landlord or agent finds the standard of exit cleaning inadequate.

Just like damage to the rental caused by tenants and their guests, any damage caused by their pets is the responsibility of the tenant.

If the tenant fails to make good, landlords can make a claim if they have a policy that includes cover for pet damage.

The bottom line: with some planning and the security of a landlord insurance policy with pet damage cover, landlords can look to take advantage of the many benefits of going pet-friendly.

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Sharon Fox-Slater

Sharon Fox-Slater is the Managing Director of EBM RentCover, which protects more than 165,000 rental properties across Australia. For more info, visit RentCover.com.au.