There are 2 ways to receive owner-held security deposits:
Option 1: Tenant pays the rental owner
This will show the money as going from the tenant directly to the rental owner. It will skip your operating bank account, and increase the Owner-Held Bank Account that represents the property owner’s bank account.
- Select Rentals.
- From the drop-down, choose Rent roll.
- Select the tenant’s lease.
- Select Receive payment.
- Complete the form. Choose Security Deposit Liability as the account.
- Select Save payment.
- Select Accounting.
- From the drop-down, choose Banking.
- Select this property’s default operating bank account. (To verify the default operating bank account, review the property summary page.)
- Select Record deposit.
- Change the bank account on the deposit to the Owner-Held Security Deposits account.
- Go to the Undeposited payments section on the page. Select the checkbox next to the tenant’s security deposit payment.
- Select Save deposit.
Option 2: Tenant pays your company and you pay the rental owner.
First, you’ll need to show that the tenant has paid their security deposit.
- Select Rentals.
- From the drop-down, choose Rent roll.
- Select the tenant’s lease.
- Select Receive payment.
- Complete the form. Choose Security Deposit Liability as the account.
- Select Save payment.
Next, you’ll need to show that you received and deposited the security deposit into the bank account you manage for this property. This may be a trust account for multiple properties or your company bank account. Wherever you deposited the funds in the real world should match how you record your deposit in Buildium.
- Select Accounting.
- From the drop-down, choose Banking.
- Select the property’s operating bank account to locate the undeposited funds.
- Select Record deposit.
- Select the security deposit payment under Undeposited payments.
Note: If the bank account you deposited the money into in the real world is different than the property’s default operating account, be sure to update that in the Bank account drop-down at the top of the page.
- Select Save. Stay on this page and continue to the next steps.
To show the transfer of the funds from you to the rental owner that happened outside of Buildium:
- Select Record check within the bank account where the deposit was recorded.
- Select Rental owner. From the drop-down, choose the rental owner who’s holding the deposit.
- Choose the property.
- Use the Deposit Transfer account as the offsetting account.
- Match all transaction information (amount, date, etc.) to the real-world information.
Note: To record additional funds sent to the owner, like the owner draw, add a second row allocation. The total of the additional funds and the deposit transfer should equal the total check you have paid the owner.
- Select Save.
To show the owner now has the deposit, record it under the Owner-Held Security Deposits bank account.
- Select Accounting.
- From the drop-down, choose Banking.
- Select the Owner-Held Security Deposits bank account.
- Select Record deposit.
- Select Add another under Other deposit items.
- Choose the property associated with the owner-held security deposit.
- Select Deposit Transfer account under the Account column.
- Match all transaction information (amount, date, etc.) to the rental owner check.
- Select Save.
To make sure your transactions were properly recorded, review your balance sheet report. The amount of the security deposit liability should match the amount of money held by the owner in the Owner-Held Security Deposit asset account.
Looking for more information?
- Check out Move-ins and Move-outs for Rentals in Buildium Academy.
- How to set up owner-held security deposits.
- Learn how to refund security deposits.