Get 12 Lease Protections When Allowing Tenants to Keep Pets at Your Property

Pet rules in a commercial lease? At first, I thought this was a terrible idea for an article. After all, the vast majority of commercial landlords in the U.S. don’t permit pets on the property—to the extent they even consider the issue at all. And it was for that very reason that I came to recognize why pets and commercial leasing is such a compelling idea, particularly in these times. Allowing pets might be just the unique amenity you need to compete successfully for tenants. So, it’s no surprise that increasing numbers of office buildings, retail, industrial, and other commercial properties are opting to go pet-friendly.

But while allowing pets can be a shrewd business strategy, it won’t work for everyone. You need to weigh the pros and cons carefully. And if you decide that the idea does make sense for you and your property, you need to create specific leasing rules to manage the liability, health, property, and other risks that come with allowing pets on the premises. This article will help you do both of these things—and give you a Model Lease Addendum: Spell Out Pet Rules in Lease Addendum that you can adapt and add to your standard lease template.

The Advantages of Allowing Pets

Accepting pets is a potentially powerful amenity that can give you a decisive edge in attracting and retaining tenants. Explanation: Like you, tenants have a business to run. In the current economy, one of a company’s toughest challenges is getting people to work for them, especially if the job requires employees to leave their homes and come to the office or facility each day.

Allowing pets on the property can make it significantly easier for your tenants to attract and retain employees. Studies show that employees who bring their dogs to work are significantly less stressed and more productive than those who have to leave their dogs at home. In addition to worries, employees who can bring their pets to work save money on sitters’ and walkers’ fees. Accordingly, tenants may strongly prefer to sign new leases and renew current leases from landlords that accept pets, especially since it’s still such a relatively rare amenity.

The Disadvantages of Allowing Pets

There are also disadvantages to allowing pets. For one thing, it may not be legal for your property or tenant’s proposed use—for example, if the tenant leases the premises for use as a restaurant, grocery store, or other establishment that sells food and beverages. Strategy: Check with an attorney about whether accepting pets, or particular types of pets, is allowed under building codes, zoning rules, and environmental and other applicable federal, state, and local laws. Also check for any prohibitions in the terms of your liability insurance policy.

In addition, while having pets on the property may be heaven for some people, it may be hell for others, such as individuals with dog allergies or phobias. Strategy: Canvass current tenants about where they stand on the issue. Even if there are no current objections, ensure that your pet rules provide protections for people who do have animal aversions—for example, by establishing certain common areas as pet-free zones.

ESTABLISH 12 PET RULES

You can’t accept pets if it would violate the law, and you probably shouldn’t accept pets if it would cause significant hardship to others in the building. But the other disadvantages of having animals on the property—health, liability, safety, nuisance, etc.—aren’t necessarily deal breakers to the extent they can be effectively controlled by including a comprehensive pet addendum in your lease. Specifically, the pets addendum should provide 12 protections.  

1. Exempt Bona Fide Service Animals

To start, specify that the pet addendum doesn’t apply to duly certified service, guide, and signal animals. Explanation: Exempting bona fide service animals from pet restrictions is considered a reasonable accommodation that landlords may have to make for persons with disabilities under the Americans with Disabilities Act (ADA) and other federal, state, and local civil rights laws. So, you want to carve service animals out of your standard pets addendum to avoid ADA complaints and, instead, follow the terms of your antidiscrimination, accessibility, and accommodations policies and processes in determining whether to allow tenants with disabilities to keep service animals [Addendum, sec. 1].  

2. Require Prior Approval of Each Pet

Providing blanket permission for tenant pets is a recipe for chaos. You need to maintain tight control by requiring tenants to get prior written permission for each pet they propose to keep at the premises. Specifically, there should be a pets permission process. You might even want to charge tenants a fee for processing pet permission requests [Addendum, secs. 2 and 3].  

3. Limit Number of Permissible Pets

Establish criteria for acceptance, starting with the number of pets permitted at any particular time. You might also want to impose size and weight limits [Addendum, sec. 2].

4. Ban Wild and Exotic Animals

Don’t let your building become a zoo or menagerie for wild and exotic animals. Exclude birds, snakes and other reptiles, chinchillas, ferrets, iguanas, monkeys, pot-bellied pigs, rabbits, raccoons, rodents, weasels, skunks, tarantulas, scorpions, spiders, and basically any other undomesticated animal other than a dog or cat [Addendum, sec. 4].

5. Ban Dangerous Dog Breeds

While dogs may be man’s best friend, certain breeds pose higher risks of violent, aggressive, and dangerous behavior, and may even be banned under local laws for your type of property. Breeds you should consider banning include Pit Bulls (a.k.a. American Staffordshire Terriers, Staffordshire Bull Terriers, or American Pit Bull Terriers), Bull Terriers, Bull Mastiffs, German Shepherds, Huskies, Malamutes, Doberman Pinschers, Rottweilers, Chow Chows, and Rhodesian Ridgebacks [Addendum, sec. 5].  

6. Require Evidence of Good Behavior

Require tenants that apply for permission to keep a pet to provide you with evidence that the animal is:

• Properly vaccinated against all diseases and conditions that can threaten human health;
• Potty trained;
• Spayed or neutered; and
• Not violent, aggressive, unduly noisy or smelly, and generally well behaved [Addendum, sec. 3].

7. Require Tenants to Register Accepted Pets

Specify that any and all accepted pets must be properly registered. Keep records listing the name, species, breed, and location of each pet you accept, along with a photograph and records of current vaccinations [Addendum, sec. 3].

8. Reserve Right to Charge Pet Deposits & Higher CAM Costs

Specify that tenants are responsible for any and all damage done by their pets and that pet damage isn’t ordinary wear and tear. Tenants whose pets you accept should also be prepared to pay additional deposits to cover pet damage, as well as an increase to their pro rata share of costs for common cleaning, maintenance, or security to cover the extra expenses you incur as a result of their having the animal on the property [Addendum, secs. 6 and 8].

9. Require Tenant to Ensure Pet Obeys House Rules

It’s critically important for tenants to accept responsibility for their pets’ behavior. Among other things, pets should be kept on a leash in the common areas at all times, have appropriate identification, and not engage in excessive barking or other conduct that might create a nuisance or disturb others. Tenants must also agree to: (1) not let their pets relieve themselves except in specifically designated areas; and (2) clean up after their pets and immediately and properly dispose of droppings [Addendum, sec. 7].

10. Establish Pet-Free Areas

You need to designate certain elevators and common areas no-pet zones where individuals with allergies, phobias, or dislikes of animals can find refuge. Require tenants to be aware of and keep their pets out of these no-pet zones [Addendum, sec. 7].  

11. Reserve Right to Revoke Permission to Keep Pets

Make it clear that house rules will be strictly enforced and that violations are grounds for revoking permission to keep a particular pet. In addition, reserve the right to revoke all permissions at any time and for any reason if you determine that your pet-friendly policy isn’t working and you want to go back to banning pets from the building [Addendum, secs. 2 and 10].  

12. Require Tenant to Indemnify You Against Liability

Don’t allow tenants to keep pets unless and until they accept strict liability for any resulting bodily injury and property damage their pets may inflict, along with a certificate of insurance demonstrating adequate coverage under their general liability policy. In addition, get tenants to indemnify you for all attorneys’ fees, litigation costs, and other losses and expenses you incur as a result of their pets [Addendum, sec. 9].