This topic covers how to record a security deposit or other deposit, like last month's rent, when you've gained a new client and their old management company will be sending along the security deposit money. This topic will cover the following scenario:
You've gained a new rental owner, Bailey Jill, and her property, 100 Main Street! Congratulations! Bailey's old property management company, Boston Proper Management, will be sending along the $1000 that belongs to her tenants, Tim and Tara. In the meantime, you need to set up the lease and will eventually need to receive the $1000 when the money comes through.
To set up the lease at 100 Main Street
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Set up the Tim and Tara as you would any new tenant when you began using Buildium. Since they've already paid their security deposits to the old property manager, you'll want to give them credit for having paid. See "Entering beginning tenant and association owner balances"
By completing the steps in that linked "beginning balances" topic, the available cash will be temporarily reduced until the check from Boston Proper is received. This happens because Bailey will need to cover the deposit even if the check never arrives.
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When the check does arrive in the mail, add it to a bank deposit using an "other deposit item" within a bank deposit. Select 100 Main Street as the property and "opening balance equity" as the offsetting account. See "Bank deposits"
By making the bank deposit and using that equity account, the available cash will be restored to the expected level. The credit from step 1 and bank deposit from this step are like left and right shoe of a set. You can choose to only wear one shoe, but things will be a bit wobbly until the other shoe arrives.
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