So I recently bought a property with existing tenants.

Closed earlier this month, for some reason the Security Deposits were not deducted from the cash-to-close, nor prorating the rent. So the previous owners are cutting a check for the security deposits, partial rents, and pet deposits.

Well I finally got the lease agreement documentation from the seller's agent after close and I noticed something. The tenants agreed to pay $600, pet deposit was $300 but there was a pet fee of $300 as well. They are only sending $300 per per-owning tenant (pet deposit). However, the language of the pet fee is to cover the additional wear and tear caused by the pet. This differs from a pet deposit whereas a deposit covers property damages.

According to Texas Code, "wear and tear" is different than damages because its expected normal usage by the resident (carpet wears when you walk, you put nail holes in the drywall, etc). Applying this logic to pet wear and tear means normal condition decline merely for having the pet, not necessarily damages (which is covered by the deposit).

Thus the fee tied specifically to the "wear and tear" of the pet should apply to the active leases. The fee is not a one-time, line your wallet fee. If it were an application fee, that would be a different story.

So Im thinking about demanding performance for these fees. Am I off base here?

I collect a pet fee so im kinda familiar with it. If it were me, id offer to prorate it with the new owner.

dallasiteinsa02 said:

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Didn't your contract stipulate that all current leases would be provided within period of time? Why would you close without having that well in advance with a right to terminate? It could have said anything and you would be held to it.

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This.

TheBonifaceOption said:

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So I recently bought a property with existing tenants.

Closed earlier this month, for some reason the Security Deposits were not deducted from the cash-to-close, nor prorating the rent. So the previous owners are cutting a check for the security deposits, partial rents, and pet deposits.

Well I finally got the lease agreement documentation from the seller's agent after close and I noticed something. The tenants agreed to pay $600, pet deposit was $300 but there was a pet fee of $300 as well. They are only sending $300 per per-owning tenant (pet deposit). However, the language of the pet fee is to cover the additional wear and tear caused by the pet. This differs from a pet deposit whereas a deposit covers property damages.

According to Texas Code, "wear and tear" is different than damages because its expected normal usage by the resident (carpet wears when you walk, you put nail holes in the drywall, etc). Applying this logic to pet wear and tear means normal condition decline merely for having the pet, not necessarily damages (which is covered by the deposit).

Thus the fee tied specifically to the "wear and tear" of the pet should apply to the active leases. The fee is not a one-time, line your wallet fee. If it were an application fee, that would be a different story.

So Im thinking about demanding performance for these fees. Am I off base here?

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So you are saying that who you purchased the property from is not turning over the $300 pet fee? And that's per pet - how many pets?

What we used to do is take a pet deposit and communicate that a certain number of that was a pet fee which is not refundable, like $600 pet deposit and $300 of it is the pet fee that we set aside to clean the carpets cause we knew that needed to be done no matter what. We would also collect monthly pet rent of $25 or so. But, you'd couldn't pay me enough to do property mgmt any more.

So, is the right thing to do to turn over the pet fee(s) to you since you are purchasing the property while the lease is still in effect for the period that fee was paid for? Probably, maybe, but it's murky water, but most likely not going to happen. A fee is a fee and is essentially miscellaneous income. For example, Seller you are purchasing from is not going to turn over whatever late fees they have received during the current lease term in effect.

Keep moving and make sure you don't have bigger problems then trying to collect $300 that is probably not actually "due" to you.
My 0.02

Its a fee not a deposit. It not your money.