Frequently Asked Question

How to Deal with Tenant Deposits
Last Updated 3 months ago

Tenant Deposits must be protected under a government authorised tenancy deposit scheme within the prescribed number of days. There are two approved types of schemes and they are dealt with differently within PropPack.

  1. Insurance
    This service is used when the managing agent receives the deposit from the tenant and keeps it. He must then use a government approved scheme to insure the deposit.

    In such a case two transactions need to be recorded in the tenant's rent ledger:
    i) Type D: Deposit due. A positive value.
    ii) Type E: Deposit paid. A negative value that reconciles with the bank.

    You should also, on the Tenants Maintenance screen, on the top right hand side, record the insurance certificate number in the Deposit Certif. field. (The Exter. Deposit value should be left empty)

    When the tenant leaves, and you have entered a leave date, you can then use the Refunds button on the Tenants Maintenance screen to automatically process the refund calculation and rent ledger postings.

  2. Custodial
    This service is used when the managing agent receives the deposit from the tenant and then forwards it to the custodial service provider.

    This type of deposit is not recorded in the tenants rent ledger as the managing agent does not actually hold the funds. It is not correct to enter type D and E ledger postings.

    It should be recorded in the Expense Ledger as follows:

    i) Create an Analysis Code like TDR - Tenant Deposits Received.
    ii) Create s Supplier called something like Tenant Deposits Received. with default analysis code TDR.
    iii) On receipt of the deposit enter it as a negative value against Supplier Tenant Deposits Received. with analysis code TDR.
    iv) When sending the deposit to the custodial service provider, process it as a regular Expense transaction.

    On the Tenants Maintenance screen, on the top right hand side, record the insurance certificate number in the Deposit Certif. field and the deposit amount in the Exter. Deposit field.

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