Screen Location... Tenants main screen > Transactions > Add > Payment
This screen is used to return rent, or debt that has actually been overpaid, or money being Held in the tenant's account to a current or vacated tenant. Note that neither bond or letting fee can not be overpaid, see Bond Processing and .
In particular, do not use this screen to reimburse a tenant for work done or expenses the landlord may be reimbursing. See Reimbursing a Tenant
Also use this screen when bond has been returned from the bond authority and there is money left over to be returned to the tenant. See Bond Processing for discussion.
While the tenant has no vacate date
When returning overpaid money to the tenant it must come out of the account it went into.
This screen takes money from one or more specific accounts, creates a payment record in each of those accounts, assembles it into a single value and records a payment of the total amount in the tenant's account and the bank records.
Rent comes from the landlord's account. Any fees collected when the money was received is returned from the Management Fees and GST accounts. See the next section for fee recovery.
Debt too, comes from the landlord's account but in full because no fees were charged when that money was received. Also see the next section.
Letting Fee comes from the Letting Fee and GST control accounts
Bond comes from the Bond control account.
Held money comes from the tenant's account.
The left hand side of the screen shows where the money is coming from and the right hand side where it is going.
When the tenant does have a vacate date
Only Letting Fee, undisbursed Bond and Held money can be returned to the tenant with a Tenant Payment because any rent or debt overpaid is transferred back to the tenant Held account from the landlord account.
Management Fee and GST recovery
When over payment of Rent was receipted (say $200), the system deducted management fees and GST ($25) from the gross amount and the landlord received only the lesser net amount of ($175).
When the refund is made only the amount originally taken from the landlord's account ($175) is taken from the landlord's account and the management fees and GST ($25) is taken from the Management Fees and GST control accounts thus returning the full amount ($200) to the tenant.
If you wish to charge the landlord for the handling of this overpayment use the Landlords Transactions > Adjust Fees (in the current period) or a Landlords Transactions > Fees transaction if the Tenant payment was made in a previous period.
Note also that by default the system does not normally deduct fees from the Debt portion of any receipt. However, it is possible that when the initial Debt Receipt was entered fees may have been deducted using the [Adjust Fees] button. If this is the case the system will not return such amount and this must be done manually.
The Tenant Payments screen should only be used when the tenant has actually overpaid something with real money and that is being returned to the tenant. Do not use the Tenant Payments screen to make a reimbursement from a landlord to a tenant for work the tenant has done. Instead make a payment from the landlord's account with the tenant as payee.
Payments to tenants are made for a variety of reasons the most common possibly being:-
returning rent payments received after the tenant has vacated the property because the automatic payment has not been stopped.
refunding rent or debt over payments made by the tenant when they vacate as a result of them paying in advance of the rent or debt required at the time.
a refund of the portion of the bond returned from the bond authority after you have deducted unpaid rent and end of tenancy debts.
When any over payment has occurred you must first identify what it was for and how it was entered into the system and has it been distributed to the landlord. Next determine exactly what has to be returned. Is it rent, tenant debt, letting fee or a bond over payment or is it money being held in the tenant's account.
If it has been disbursed to the landlord work out how you are going to get it back before paying out. Can it be repaid from present rent flow? If you can not get it back from the landlord you may need to refund the money yourself by a transfer of funds from your trading account into your trust account. There is also the question of management fees and GST you may have taken. How you handle some of these questions depend upon your operational policies.
One of the reasons you need to know how it was received is that any refund must come from the same account it was received into. Rent and debt over payments must be returned from the landlord's account, bond from the Bond control account, letting fees from the Letting Fees and GST control accounts and any held amount from the tenant's Held balance. It is no good returning a bond overpayment from the landlord's account because that will leave the bond account with the wrong balance as well as short-changing the landlord who of course never received to bond.
If the sum of rent and debt being refunded exceeds the landlord balance a warning message will be given. This does not stop you making the payment but it will overdraw the landlord's account which will need to be corrected from other rents received, or reimbursed by the landlord, or from your own funds.
Examples of how to handle some over payments might be handled are discussed below. XXXX changed by Held system
Collapsed Tenancy Agreement
If a deposit is to be returned because the tenancy agreement collapses, or perhaps the tenant leaves in the first few days, you can use this screen to return all or only a portion of the initial payment(s). Make sure you correctly allocate what you are returning to the tenant. You may be returning all the rent and bond but none or only part of the letting fee.
Overpaid Rent - Not disbursed to the landlord
If the Vacate Date has been entered the tenant's account will show the amount overpaid. This is the actual amount to be repaid. Return this full amount to the tenant using the Tenant Payment screen. A payment transaction will be created in the landlord's account equal to the amount paid by the tenant less any Management Fees and GST on the Rent portion tenant. The Management Fees and GST will be deducted from the respective control accounts.
Overpaid Rent - Disbursed to the landlord
Assuming the rent can be recovered from the landlord by rents received from the new tenants, handle it the same way as above. If there is a shortfall or no rental income you will need to get the overpayment received by the landlord returned so their account contains the portion of the overpayment they received. Receive this money into the landlord's account using the Landlord Receipt screen. This applies whether the property is managed or a casual let.
If you can't get the money back from the landlord, you will need to transfer money from your trading account into your trust account and receipt it, with suitable text or memo notes, into the landlord's account so the payment to the tenant can be made. This has more steps but is tidier than paying the tenant directly from the trading account and having stray balances floating about in the trust account. If ,or when ,you do get the money from the landlord bank it in your trading account to replace the money you transferred.
Where you have to recover any money from the landlord put a hold on their account, using the [Payments] button, so you do not inadvertently pay them out again.
Overpaid Tenant Debt
Return any overpaid debt using the same procedures as for rent discussed above. In this case, however, the full debt overpayment is normally returned from the landlord account because fees are not usually deducted from tenant debt receipts. Fees are earned when the invoice which gave rise to the debt or a Fee transaction was entered.
Overpaid Letting Fees
In this case the money returned to the tenant comes out of the Letting Fee control account and the GST control account. The maximum that can be returned to the tenant is limited to tha actual amount the tenant has paid.
Most often any overpaid bond amount being returned to the tenant will be the balance of a bond refund after deducting unpaid rent and tenant debt. In this case use the same tenant payment procedure as discussed above.
Occasionally there may be a genuine over payment of money which resulted in more bond being "paid" than required, perhaps as a result of a Bond Transfer. Take Extreme Care here. You must not return any portion of bond entered as a Bond Transfer to the tenant. You do not have that money - it is held by the bond centre. You will need to work out exactly what is the situation. If there is an overpayment of money and it is still in your bank account it can be returned as above. If it has been disbursed to the bond centre then that is where it has to be returned from.
Tenant Held amount
Money shown as being Held in the tenant records is retained in the Tenant held control account and can be returned to the tenant without reference to any other accounts.
I hope it is blindingly obvious that you would normally combine any refund of rent, debt, letting fees, bond or held amount into one tenant payment transaction.
Reimbursing a tenant for work done on the property
Frequently a situation arises where a tenant has done some work on the property which is rightly the landlord's cost. Sometimes the reimbursement for this work may a real payment to the tenant and sometimes a rent holiday which you could achieve by entering Rent Change records to cover the reimbursement.
But you get no fees on a rent holiday do you?
When actual money is to be returned to the tenant make a CHQ or DC payment from the landlord's account with the tenant as payee.
When the tenant is to get a rent or debt credit make a DC payment from the landlord's account, change the bank account number to your trust account code and change the payee to the tenant. Then enter a receipt into the tenant's account. These two transactions cancel each other out on the Enter Bank Statement Details screen and no actual bank transactions are required so you don't increase the bank's profits. But this way you get your fees on any rent holiday given by the landlord. If you don't wish to charge fees use the Landlords Transactions > Adjust Fees button and zero the fees.
Now you get your fees, the tenant Paid To date is correct, and there is no need to enter (zero value) Rent Change records to cover the amount the tenant has received.
Rent Received and the Vacate Date
Overpaid Rent Reimbursement