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Give them options and let them pick the one they like most. For example.
1) they pay for carpet and get the same rent for 2 years.
2) split the cost of carpeting and you will get a pet deposit for one half the carpet costs. Define in writing what carpet damage will be normal or abnormal considering the dog.
3)you pay for carpet, you get a substantial pet deposit, they get a $75 rent increase per month.
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Who Dares, Wins!
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