Rentec Direct helps you keep track of deposits for your tenants via a separate deposit ledger to ensure these deposit funds do not get mixed in with regular rent payments and monthly transactions. Most states, as well as general accounting principles for landlords, require this.
First, click on the Tenants tab, then click on the balance of the tenant.
Now at the top of the screen you will find the deposit balance. A red balance will indicate the deposit is not yet fully funded. A green balance will show that it is fully funded. Click the amount to enter the deposit ledger.
Here you will be presented with the tenant deposit ledger and actions. The most common actions will be receiving deposit when the tenant pays their full or partial deposit, and returning deposit when the tenant moves out. You can edit any existing ledger line by clicking the edit icon to the right of it.
If you wish to modify the amount of deposit due from this tenant, edit the line labelled 'Tenant Deposit Due', and change the amount to the desired amount. If you wish to remove an entry, edit the line and follow the blue "Delete" option. To print the deposit ledger for you or your tenant's records, enter the deposit ledger and click the printer icon in the upper-right corner.
You can also perform various options such as:
- receiving deposit
- returning deposit
- add an additional amount due
- transfer deposit
- apply deposit as a credit on the tenant's account
When you receive a payment from a tenant to cover their deposit due, select the Receiving Deposit action, specify the payment type, amount and the bank account you'll be using to hold the funds. You may also want to add a note to the memo field such as "pet deposit received".
If you place the security deposit into your Undeposited Funds account, it will show up within your deposit summary preceded by a (D) followed by the associated property name, signifying this is a tenant security deposit.
Add Additional Amount Due
To charge another deposit to a tenant, such as a pet deposit, select the Increase Deposit Due action, specify the amount and add a Memo describing what the deposit is for.
The deposits due and amounts received will then show up on the security deposit ledger as follows...
If you release the tenant's security deposit to the owner once you have received and posted it to the tenant's security deposit ledger, you will first want to create a new Income Category under Settings/Setup Categories, such as Deposit Released to Owner. (If you do not believe this transaction should be considered as income, create an "other" category verses an "income" category.)
Next, use the action Transfer Deposit in the tenant's deposit ledger. Complete fields appropriately.
Once the funds have been transferred, you will be able to post an owner disbursement transaction through the property tab by clicking on the red $. Be sure to add in a memo note referencing the release of the tenant's deposit.
When you are ready to return a deposit to a tenant, if you are returning the entire deposit, select the Returning Deposit action, specify the payment type, amount and the bank account you'll be removing the funds from. f you are printing checks from the program, be sure to select "Print Check." To provide your tenant a deposit reconciliation statement, click on the printer icon in the upper right corner of the Deposit Ledger. **For those who prefer the look of the standard tenant statement to issue out to tenant's after move-out, follow the directions in Apply Deposit as Tenant Credit instead .
If you are returning a portion of the deposit (because the tenant has charges against their deposit, we recommend you follow the instructions listed below for Apply Deposit As Tenant Credit, followed by Charging Against Deposit.
Charging Against Deposit
To charge expenses against a tenant's security deposit, first follow the Apply Deposit as Tenant Credit action (see below.)
When you have moved all deposit credits to the tenant's regular ledger from their security ledger, you can post any necessary 'tenant only' charges to the tenant's ledger through the the tenant tab. If you have tenant expenses that are paid out at the property level (carpet cleaning, repairs...), post this expense to the property in the property tab. Be sure to select the bank you're paying funds out of, the tenant (if they are responsible for the expense), and the appropriate expense category, such as 6200 Repairs. You'll also want to be sure to select a Payee to link in the vendor for the expense. This will post the expenses to all of the ledgers and deduct the amounts from the credit.
Once all charges have been assessed to the tenant's regular ledger, if there is a credit balance remaining that you wish to refund, head to the Property tab and post an expense for the deposit refund. Be sure to indicate the bank account the funds are to be paid out of and link in the tenant to this transaction as well as adding in any necessary memo notes.
One you have reconciled all charges and refunds for the tenant and you wish to print a deposit reconciliation statement, go to the Tenant tab, right-click on the tenant's name and select Print Statement.
Apply Deposit as Tenant Credit
To credit a tenant the amount of their security deposit, select the Apply Deposit as Tenant Credit action, specify the amount that you are crediting back to the tenant and the category you wish to apply the funds to. If you are transferring funds from one bank account to another, select the bank account you're holding the funds in and this transaction will transfer funds out of the holding bank account and into the Property's default income account. Because this transaction is associated with the property's default income account, the tenant will need to be placed into a property in order for credit to be applied to their ledger, if the tenant is "inactive" the credit will not post correctly, but will be debited from the holding bank account.
Once you have applied the deposit as a credit to the tenant's standard ledger, you can then reconcile the tenant's account by posting any necessary charges to the tenant's regular ledger and printing a tenant statement (Tenant tab/right-click on tenant/Print Statement.). See Charging Against Deposit above.
Special Note: If you need to delete a Apply Deposit as Tenant Credit or a Transfer Deposit transaction, you will need to follow-up and also delete the transaction out of the tenant, property or any bank account you linked into those transaction.
Keywords: Security,deposits,Pet Deposits,release deposit to owner,last month's rent,trust accounting