Note: It is strongly recommended that landlords are not paid where properties have negative arrears balances. For further guidance on how to check for rent overpayments, please click here.
If a tenant has paid too much rent, and the landlord has been paid this and now needs to be recouped, there are two ways to resolve this.
1. Wait for the next rent payment
When the next rent payment is received, users can assign the bank line to the property with the subcategory Rent overpayment, so that it can be refunded to the tenant from the bank.
Once refunded to the tenant, the bank line associated with the payment should be assigned to the property with the subcategory Rent repayment.
If the full balance was not overpaid, the next rent payment can be split between the Rent in and Rent overpayment subcategories. For further guidance on how to split a bank line, please click here.
2. The funds will be deducted from the landlord's next payment or they have been returned directly
If the landlord intends to return the overpaid funds or wants this to be deducted from the next payment, the following steps should be completed.
If the landlord returns funds, assign these to the subcategory Landlord other income with a suitable description. Complete the steps below and include this property in the payment run.
Otherwise, only include the property in the payment run when the next rent payment is received.
2.1 Assign the funds to refund the tenant
To refund the tenant, funds should be taken from the Business float. These funds can then be recouped at a later stage.
To assign funds to refund the tenant:
Navigate to Financials > Double entry
Within the Money out section, please populate the fields as below:
Category = The property
Subcategory = Business float out
Adjustment value = The full amount of rent to refund
Within the Money in section, please populate the fields as below:
Category = The property
Subcategory = Rent overpayment
Adjustment value = The full amount of rent to refund
Include a suitable description and click Add Adjustment
2.2 Manually refund the tenant
The user can then manually transfer the overpaid rent to the tenant. Once the payment clears, the bank line associated with it should be assigned to the property as Rent repayment.
2.3 Return the management fee charged in error
The management fee charged on the erroneous rent payment should be returned to the landlord's balance.
Navigate to Financials > Double entry
Within the Money out section, please populate the fields as below:
Category = The property
Subcategory = Landlord fee refund
Adjustment value = The full amount of management fee taken in error
Within the Money in section, please populate the fields as below:
Category = The property
Subcategory = Landlord other income
Adjustment value = The full amount of management fee taken in error
Include a suitable description and click Add adjustment
2.4 Recoup the funds from the landlord
Navigate to Financials > Landlord deductions and click Business float (loan)
Within the pop-up, select the relevant property
Type a suitable description
Enter the amount to claim back (total overpaid rent amount)
Click Submit
When this owner's next rent payment is received, the deduction created here will be included in the landlord payment run, and the funds will be recouped to the business float. The landlord's next statement will show that the funds have been recouped.
2.5 Amend the Tenant ledger
The user should correct the running balance on the tenant's ledger, as otherwise, it will continue to show incorrect arrears.
Navigate to Lettings properties > Property balances
Locate the relevant property and click on the value within the Tenant arrears column to access the Tenant ledger
Click the dropdown arrow next to the Update due dates, then select Enter single due date and set this for the value of the overpaid rent, with the start and end date set to the day this was originally paid
Add a suitable description and click Submit