A refundable deposit is one that the resident can get back after some predetermined period of time, such as the end of a tenant's lease. Common examples include:
- Last month's rent
- Key deposits
- Pet deposits
- Security deposits
- Storage deposits
To record a refundable deposit:
If necessary, adjust your chart of accounts by adding the account you need to track. see "Chart of accounts"
Refundable deposits are always classified as liabilities on your chart of accounts.
Charge the tenant or association owner as usual. see "Association owner charges"or see "Tenant charges"
Receive payment as usual.
Money applied to a liability will appear on the ledger's Deposits page.
Things to think about:
- Buildium's Move In process includes fields to add a charge for security deposit and pre- paid rent.
- If there's even a slight chance that the resident can get the money back, you'll want to record the money as a liability. Only take the money as income when it is forfeited by the resident.
- Your area might include laws on proper handling and accounting for deposits. Guidance from your local real estate commission or accountant should take precedence over the guidance presented in this topic.