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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.

We have always been a nation that loves its furry friends. There are more than 29 million pets in Australia and we have one of the highest pet ownership rates in the world with around 61 per cent of households having a fur baby, according to the RSPCA.

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

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.

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

Northern Territory
From 18 February, 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.

Queensland
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.

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.

Tasmania
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.

Landlords who decide to go pet-friendly can be presented with a number of benefits, including:

  • High demand
    With many tenants wanting to have pets, pet-friendly rentals can often receive up to twice as many enquiries (providing a bigger prospective tenant pool), lease faster (reducing the time and costs associated with letting advertising) and experience shorter vacancy periods (limiting pauses in cash-flow).
  • Reliable income
    Research shows tenants with pets are often willing to pay up to 14 per cent more rent and stay longer. International research reveals that tenants with pets stay an average of 23-46 months, compared to 15-18 months for tenants without pets. Tenants staying put equates to steady rental income for the landlord and time savings for agents in having to find new tenants.
  • Excellent tenants
    Responsible pet owners are often found to be 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 safety and security
    The presence of a dog at a property can increase the occupant’s sense of security and reduce the chance of it being burgled. In fact, a study conducted on offenders found having a dog on the premises was the number one deterrent.
  • Improved tenant well-being
    There are many international studies that show pet owners are physically and mentally healthier, which can equate to less chance of rent default and other issues for landlords and agents.
  • Fewer ‘hidden’ pets
    Aussie research showed 11 per cent of pet-owning tenants (mainly cat owners) don’t tell their landlords or body corporate that they have a pet. Knowing there is a pet means agreements can be made about how the pet will be managed and the property maintained.
  • Reduced animal surrender
    As many as 30 per cent of dogs and cats are surrendered to animal welfare agencies because their owners can’t find pet-friendly accommodation.

For most landlords, the ‘cons’ of allowing pets concern the potential impact on the property. Many fear that allowing pets will result in damage, odours, allergens and complaints from neighbours. Some landlords may also 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.

Issues around damage, odors and noise can be mitigated through good management. Pet resumes can be sought prior to allowing a pet (pet application) and in most jurisdictions the tenancy agreement can include conditions for keeping the pet and requirements for reinstating the premises on vacating (pet agreement).

Experience shows, most responsible pet owners are also responsible tenants and will make good on any damage repairs or cleaning required. At EBM RentCover we receive lots of claims relating to damage caused by humans, and extremely few caused by pets.

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