More than 2,600 people have signed a petition calling for residents of housing association flats to be allowed to keep their pets.
Tenants in Penparcau, near Aberystwyth, say they have been told they must get their animals re-homed.
Some claim they have been living with their pets for years - and say their housing association knows about this.
But Tai Ceredigion says the tenancy agreements shows that tenants are not allowed to keep animals.
A group representing the affected residents said the situation had been handled badly.
Spokeswoman Dinah Mulholland told BBC Radio Wales: "From what the tenants tell us, the housing officers who signed off their tenancies were aware that they had dogs. Residents have also told me that they put that information on their housing register form.
"To receive notice that you have to re-home your dog is a very distressing thing for them."
Earlier this year, Tai Ceredigion sent letters to residents in shared access flats saying that pets were not allowed and they had four weeks to re-home them.
A spokesman said: "The 'pet policy' clearly states that residents living in flats with shared access will not be allowed to keep dogs, with the exception of assistance dogs.
"If they wish to keep any other type of domestic pet they must first get written permission from Tai Ceredigion.
"The policy forms part of the tenancy agreement which is thoroughly researched, written and approved in consultation with the Tenant Monitoring Group. These tenancy agreements and all the policies as detailed in our handbook are in place to offer security to all our tenants."
The firm also denied claims it had threatened to evict pet owners and added people may have signed the petition under an "incorrect assumption".