The article has been updated successfully.Propertyware assumes that security deposits are held as "Escrow" funds within the Portfolio. The default Security Deposit Account in the Chart of Accounts is marked as an Escrow Account. These funds then appear in the Held in Escrow field in the Portfolio Summary under Management>Summary. If your owners hold their tenants’ security deposits and you want to allow these funds to pass through the Portfolio Balance, you can do the following:
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Locate the SECDEP account in the Chart of Accounts and unflag it as an Escrow Account. If only some Owners follow this practice, create a second Security Deposit Account on your Chart of Accounts for this purpose, flag it as a Security Deposit Account and unflag it as an Escrow Account.
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Record the security deposit charge into the applicable account and its corresponding payment on the lease’s Tenant Ledger.
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Pay out an owner draw in the amount of the security deposit. The draw will be paid out from Portfolio Income (as opposed to the security deposit liability account). This will result in a lower or negative balance in your Portfolio Income. That said, this may be a suitable solution to remind you that your owner owes you money (in the security deposit amount).
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Print the check to the owner from Propertyware using the Print Checks module.
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Make a note on the Tenant Ledger to remind you that the owner is holding the deposit. You can use the Sticky function on the Tenant Ledger for the reminder, create a note on the lease, or create a custom field for your leases (such as a checkbox field titled “SecDep held by Owner”).
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When the tenant moves out, you will need to get the money back from your owner, and record it as an Owner Contribution. You may then use the Move Out Calculation tool to allocate, refund or forfeit the security deposit.
Alternatively, you may refrain from recording the deposit in Propertyware. If you choose this option, you should make a note on the tenant ledger to remind you that the owner is holding the deposit, and list the amount of the deposit. You can use the Sticky function on the Tenant Ledger for the reminder, create a note on the lease, or create a custom field for your leases (such as a checkbox field titled “SecDep held by Owner”). If you use this option, you cannot use the Move Out Calculation tool to allocate, refund or forfeit the security deposit.
