If a tenant moves from one unit to another, you can transfer the security deposit from the old lease to the new lease. If your company is currently holding the security deposits on this property, this does not require taking any steps in the real world, but instead involves initiating “dummy” transactions to represent the transfer from the old lease to the new lease.
For example:
Franklin Jones had a lease for unit 1. That lease is over and he's moving across the hall to unit 4 this weekend. His $800 security deposit needs to be transferred from his lease on unit 1 to his lease on unit 4. The $800 is currently held in the Security Deposit Bank account.
To transfer a deposit:
- Navigate to Rentals > Rent roll.
- Click on the original lease.
- From the lease summary page, click Financials, then More (...), and select Issue refund.
- Issue a refund out of the bank account where the funds are currently located, in the total amount of the deposits being transferred.
Add a memo that shows this is an adjusting transaction and that there is no real world equivalent. For example, Internal transfer: Moved to a new lease.
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Receive a payment on the new lease for that same amount.
Add a memo that shows this is an adjusting transaction and that there is no real world equivalent. For example, Internal transfer: Tim's security deposit from unit C to D.
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Deposit that payment into the bank account.
Add a memo that shows this is an adjusting transaction and that there is no real world equivalent. For example, Internal transfer.
When you're done, the bank account balance should be the same as when it began. Include the refund and bank deposit in your next bank reconciliation.
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