The treatment of bond money paid by the tenant introduces a degree of complication not encountered by other money received because once it is disbursed to the bond centre the system has lost control over it. Generally losing that control is not too much of a problem, providing users are diligent in their treatment of it, but when things go bad, reports can provide erroneous data, especially the Tenancy Tribunal Report. The bond system now in place hopefully provides the flexibility wanted while at the same time stops inadvertent errors being made. It does not cure sloppiness.
The following applies to bond money:-
It can only be received using a tenant receipt and is held in the Bond control account. From there:-
It can then be either:-
4 disbursed in its entirety to the bond centre
4 or returned to the tenant by means of a tenant Payment transaction
4 or transferred (from bond being held but not yet disbursed) for another use by means of two receipts
- one with a minus bond value
- the other of an equal value usually to be allocated to rent or debt
4 Note The bond figure in a tenant payment or a minus value receipt can be any amount of the bond being held but not yet disbursed as opposed to a bond disbursement where the entire bond held is disbursed.
Bond can not be overpaid. The system will not allow more money to be allocated to bond than is recorded in the Rent Change records as due to be paid. This would normally be the amount on the tenancy agreement plus any additional bond required by a rent increase. There is an exception to this, see Recording Bond Transfers below.
Money returned from the bond centre should always use the [Bond Returned] button on the tenant transaction grid.
Establishing the Bond to be Paid
When a new tenant is created the bond offered in the Rent Inv record will be that in the Property > Desired Bond field.
If this in incorrect it should be over keyed with the total bond that applies for this tenancy.
Do not enter just any residual bond the tenant still has to pay nor take into account any bond amount to be transferred from another property.
If no bond is required on the property then the figure should be set to zero.
By entering the full amount of bond to be paid the system records what actually happens and the Tenant Arrears and Bonds Due reports will continue to show any bond shortfall as owing. If a portion is to be paid by a bond transfer that transfer should not be entered until you are notified it has taken place and the amount is what was anticipated.
Changing the Amount of Bond to be Paid
When the tenant is first set up the total bond to be paid (entered as above) is stored in the Rent Change records.
Subsequent adjustments to bond can only be made using the tenant main screen [Rent Changes] button.
If the original bond entered was incorrect press [Rent Changes] and edit the record as required.
If the bond is to increase when there is a rent increase add a new rent record for the new rent amount and with the extra bond to be paid.
If the bond is to increase without a rent increase add a new rent record for the same rent amount but with the extra bond to be paid.
Recording Bond Paid by the Tenant - Real Money
Bond money paid by the tenant is receipted into the system with any one of the three "standard" Tenant Receipts and may be all or part of the amount received.
The total bond to be paid may be received in one amount or may be paid in smaller amounts over several receipts.
Either way once the total bond required (as recorded in the Rent Change records) has been received, any allocation of bond over that amount is automatically transferred to Held.
Recording Bond Transfers
Enter a bond transfer from the Tenants > Transactions > [Add] menu > Bond Transfer screen.
A Bond Transfer is a "non-money" transaction which credits the tenant's account with a bond value held by the bond authority which has been paid by the tenant on some previous tenancy and is now transferred to this one.
Its effect is to reduce the amount of "real" money you need to receive from the tenant.
It will affect the Bonds Due and Tenant Arrears reports.
It will not effect the Bonds Held report or the Bond control account and does not appear on the Enter Bank Statement Details screen because no money has passed through the Aspect Property Manager bank nor your real bank account.
A bond transfer is unusual in that the transaction will appear in the period in which the transaction date falls which may not be the current period.
When the ownership of a property changes hands with a sitting tenant the bond disbursed to the bond centre should be recorded in the new tenant using a bond transfer. Undisbursed bonds should be transferred from the old tenant to the new tenant using two receipts, the first for a negative bond value in the "old" tenant and the second a positive bond value in the "new" tenant. Because the tenant is in the same property and you are still the bond holder there is no necessity to involve the bond authority (at least in new Zealand).
When a bond transfer is entered the transfer amount it is added to the bond already paid, disbursed or not.
4 If the total exceeds the bond required to be paid (as seen in the Rent Change records) the Rent Change records will have the bond amount in the first record increased by the excess.
4 The system has forced the bond required to equal what has actually been paid by the tenant as demonstrated in this example:-
Bond due in Rent Change records = $400
Bond paid = $300
Bond Xfer = $375
Bond due in Rent Change records = $675
This is not always what you want of course but it means the total bond in the Rent Change records is made to equal the real money paid plus the bond transfer amount. What to do in these circumstances is covered in the section "Putting it all together" below.
Disbursing Bonds to the Bond Centre
See the Bond Disbursement topic.
Bond Returned from the Bond Centre
When money is returned from the bond centre use the Tenant > Transactions > [Bond Returned] button which opens what looks like a normal receipt but money can not be allocated to Bond, only to Rent, Debt, Letting Fee or Held.
It also reduces the money held at the bond centre whereas a normal receipt does not.
When importing receipts the transaction details of any bond being returned will not match a tenant so the receipt will not be created and will need to be entered manually. Even if you know who the tenant is the receipt should not be matched, otherwise the system will not reduce value of bond at the bond centre and will most likely allocate it to Held in any case.
When bond is returned from the bond centre the system will now calculate the tenant still has to pay the amount returned. This works fine if the bond was returned to catch up on rent arrears and the tenant was to pay an extra "$20" a week to build the bond up again. However, more commonly the bond being returned will be to clear a vacated tenant's account. So, where is no requirement for the tenant to repay the returned bond the bond should be written off with a Tenant > Transactions > [Add] > Write Off transaction. XXXX New T+ Issue Also below
Bond Returned to the Tenant
Where a tenancy did not proceed and money has been receipted as bond but not disbursed to the bond centre and is to be returned to the tenant, it must be returned to the tenant using a Tenant > Transactions > [Add] > Payment to keep the system records correct.
It must not be returned using Bond Disbursements because, as you have seen above, that records the money as being at the bond centre.
Putting it all together
The bond the tenant is required to pay
4 should be the total bond required for the property
4 is stored in the Rent Change records.
There may be one Rent Change record containing an initial bond and subsequent records containing further bond increases.
The bond may be paid
4 with real money in one amount or in multiple receipts
4 or in full or part with a bond transfer.
Real money bond is "stored" in the Bond control account until it is
4 disbursed to the bond centre
4 or transferred to another allocation
4 or returned to the tenant
The bond "rules" prohibit receipting more bond than is required.
4 If the receipt allocation of bond exceeds the required bond, the excess is moved to Held where you can re-allocate it as required.
4 A warning is issued if this happens whether the receipting is manual or by importing receipts.
Bond money receipted before the tenancy starts can not be disbursed until or after the start of tenancy date.
The system will always disburse the total bond being held.
When a bond transfer is entered the transfer amount is added to the bond already paid by the tenant, whether it has been disbursed or not. If the total exceeds the bond required to be paid (as seen in the Rent Change records) the Rent Change records will have the bond amount increased by the excess. The system has forced the bond required to equal what has actually been paid by the tenant. This is not always what you want of course and adjustments may take the form of one of the following:-
4 If the bond was fully disbursed the situation is recorded correctly. However, if the excess bond is to be used to pay rent etc:-
- it must be physically returned from the bond centre first
- then entered using Tenant > Transactions > [Bond Returned] so the system records the money at the bond centre correctly
- it can be allocated to rent, debt, letting fee or Held or returned to the tenant using Tenant > Transactions > [Add] > Payment
- the bond in the Rent Change records can then be reduced to the amount at the bond centre.
4 Any undisbursed bond can be transferred from Bond to another allocation with a minus value bond receipt then the bond in the Rent Change records can be adjusted.
Whenever bond is returned from the bond centre use Tenant > Transactions > [Bond Returned] which adjusts the system record of the bond held at the bond centre.
4 The system now will say the tenant has not fully paid the bond
4 This is OK if the tenant is not vacated and is going to re-pay the returned bond.
4 When the tenant has vacated the bond is obviously no longer required so the bond portion of the account at least should be cleared using Tenant > Transactions > [Add] > Write Off. XXXX New T+ Issue
If a change of property ownership occurs and the tenancy continues under your management you must set up a completely new landlord, property, tenant relationship and the bond transferred from the old tenancy to the new one, see Recording Bond Transfers above.