Refunding Bonds/Deposits Held by the Property Owner

For our users in different regions, the terminology used for bonds or deposits may vary. In North America, these are commonly referred to as "Security Deposits". To ensure clarity, we will use "Bond" throughout this article. For more information on regional terminology, please visit our Glossary of Regional Terminology.

This article serves as a step-by-step guide on how to process the refund of bonds held by a property owner. It’s important to verify the correct ledger setup before initiating a refund to ensure accurate financial tracking. We’ll take you through this process to make sure you handle the refund efficiently and in compliance with your financial records.

Setting up a Tenancy Ledger

Before initiating the refund process, it's important to ensure that a Tenancy Ledger is established and linked to the tenant in question. If the Tenancy Ledger isn't present, here's how to set it up:

1. Navigate to the Client/Trust Accounts main page.
2. Select Tenancy Ledger Balance.
3. Use the dropdown menu next to New Owners Ledger and select New Tenancy Ledger and search for the Tenancy Name.
4. Click Save to create the ledger.

Refunding Bonds/Deposits Held by the Owner

To refund a bond held by the property owner, please follow these steps:

1. Select the relevant Tenancy and navigate to Bonds tab.
2. Choose Prepare to Refund by clicking on Contextual Menu [...].
3. Assess all outstanding invoices for the tenancy.
4. Confirm the Amount to refund to the tenant directly from the Owner’s holdings.
5. Specify the Amount to Transfer to Tenancy Ledger to settle outstanding invoices or to refund the tenant later.
6. Approve the income invoice that is generated, which signifies the receipt of funds into the Client/Trust Account. 
7. Save and approve the invoice to move forward with the refund. 
   
   

Note: Ensure that the Owner's Ledger has sufficient funds available to cover the refund or the transferred amount to the Tenancy Ledger. If there are no funds, the above process cannot be completed. 

Handling Owner Contributions

If the owner contributes additional funds to enable the refund, record it as follows:

1. Create an income invoice using an Equity account code, such as Owner Contribution and assign the owner's ledger to the invoice. 
2. Reconcile the funds to this invoice to move them to the owner's ledger. 

Finalizing the Refund 

Once the refund has been reconciled to the invoice:

1. Update the Tenancy Invoice Contact with payment details.
2. Process a disbursement using a profile that includes bonds. For tenant refunds, these will appear where bonds to be lodged are listed, highlighted in orange for clear differentiation.
3. Funds for the owner will be transferred to the property ledger from the bonds ledger and displayed in the Transfers section of the owner statement.
4. Amounts for the tenancy ledger will shift from the bonds ledger to the tenancy ledger, from where you can apply the funds to invoices or process a refund to the tenant.