How to Record an Owner-Held Security Deposit That is Already Being Held by the Owner or if The Tenant Sent It Directly to the Owner
Are you managing a new property where there is an existing tenant and the security deposit is already being held by the owner? Or is this a new lease and the tenant sent the security deposit direct to the owner? The article shows how to record this
Step 1 - Be sure to have a Chart of Account that is specific for Owner-Held Security Deposits.
Before following the rest of this article, you will need to create or check that you have a liability chart of account called "Owner Held Security Deposit" (ensure that the option "is Tracked as Held" is toggled OFF and "is Tracked as Security Deposit" is toggled ON). If you need to create this account, follow this article on How to Create a Chart of Account
Step 2 - Create an owner-held security deposit lease charge on the lease
Search for the lease
In the lease view page, click on the green Actions button
Select Add Charge from the drop-down
In the New Lease Charge screen, complete the fields
Account - Select your Owner Held Security Deposit chart of account.
Amount - Enter the amount of the deposit
Date Posted - Enter the appropriate date.
The Description will pre-fill with the name of the account, but you can change this if needed
Click the green Save button
Step 3 - Record a credit on the lease and apply it to the owner-held security deposit lease charge
In the lease, click on the green Actions button
Select Add Credit from the drop-down
In the Add Tenant Credit page, complete the fields to record the credit
Top Section - Details
Account - Choose your Owner Distribution chart of account
Amount - Enter the amount to be credited. Should be the same amount of the Owner Held Security Deposit charge
Date Posted - will pre-fill, but you can adjust this if needed
Description - Enter text to describe the transaction
Bottom Section - Charges
Apply the credit to the owner held security deposit charge that was recently created
Click the green Save button
