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$200 Non Refundable Pet Fee  Problems in California

Okay, first, my tenant paid a $850 security deposit as well as a $ 200 non-refundable pet "fee."  The non refundable fee has no "specfic" terms  in the lease however the Pet Addendum in the lease specifically holds the Tenant responsible for any damage cause by the pet.  Second, a year has passed and she and I will renew the lease, no problem, she's a wonderful tenant; very responsible and pays on time. Her dog has damaged the wooden fence that divides my house from the neighbor's home. That is the only damage to date that I have been made aware of.   What should I do?  I know it's her responsible to fix the fence however, should I refund the Pet Fee as well? This is my first year as a landlord and now, I'm reading and research the law; and it's illegal to charge a non-refundable deposit, fee or payment or any kind?   Your advise and suggestions are sincerely appreciated.
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The pet fee should be put toward damages done by the pet.In technicality it is part of the security deposit.  If the damages are more then the pet fee then the security deposit may be also withdrawn from to pay for the repairs.  Take reference photos and at the end of the lease provide them to explain what the deductions can cost of the repairs were.
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