This article explains how to track, refund, forfeit, and transfer security deposits in PropertyBoss. It also covers how to handle interest, escrow, and owner‑held deposits.


1. Understanding Deposit Transactions

PropertyBoss includes built‑in transaction types used to collect and manage deposits:

  • Security Deposit
  • Pet Deposit
  • Custom Deposit Types (your company may rename or add additional types)


To record a tenant’s deposit payment, use the Security Payment transaction.

Deposits recorded through this transaction will appear as amounts owed on the Lease Register.



2. Defining Deposits on Properties and Units

Default deposit requirements are set at the Property or Unit Notebook level.


These defaults will automatically populate when you create a new lease, ensuring consistency across all units in the portfolio.



3. Tracking Deposits in Reports

  • Use the A560 Security Deposits Held Report to:
    • View all unpaid deposits currently held
    • Track interest (where required by law)
    • Reconcile escrow accounts


This report is essential for auditing and maintaining compliance.



4. Refunding or Forfeiting a Deposit


Refunding a Deposit

A refund can be:

  • Full or partial
  • Automatically applied to outstanding charges
  • Issued by check when applicable


Forfeiting a Deposit

PropertyBoss allows two types of forfeiture:

  • Deposit Forfeit‑O — funds transferred to the owner
  • Deposit Forfeit‑PM — funds transferred to the management company



5. Transferring Deposits Between Leases


Best Practice:

  • Refund the deposit from the old lease
  • Charge the deposit on the new lease


This ensures:

  • Clean accounting records
  • Proper fund movement
  • Accurate reporting across both leases


Avoid transferring deposits directly from one lease to another unless explicitly instructed by accounting.


Example Scenario: Refund With Owner Reimbursement

  • Tenant paid a $500 security deposit
  • There is a $100 repair bill, paid by the owner


1. Property Register

  • Enter a $100 vendor bill for the repair
    • This reduces owner funds

2. Lease Register

  • Add a $100 charge (e.g., Credit Owner When Paid)
  • This allows the repair cost to be recovered from the tenant


3. Return Deposit

  • Use Credit SD to Lease to move the deposit from Escrow to the Lease Register

4. Refund Deposit

  • Use Deposit Refund to refund $500
    • $100 applies to the charge
    • $400 remains as refundable balance

5. Issue the Refund

  • Write a check to the tenant for $400

Frequently Asked Questions (FAQs)


How do I refund a deposit?

  1. Use Deposit Return or Credit SD to Lease to apply the deposit to lease charges
    1. Your company may use a custom transaction name—contact your administrator if unsure.
  2. Use Deposit Refund to return the remaining balance to the tenant
  3. Write a check if a physical refund is required

 

How do I process an owner‑held deposit?

  • Check Owner Held? when recording the deposit
  • Refunds will be charged to the owner and credited to the tenant


How do I split a refund between the tenant and owner?

  1. Add charges to the lease for owner‑covered expenses
  2. Apply Credit SD to Lease
  3. Refund the remaining deposit to the tenant


PropertyBoss automatically allocates the correct amounts to the owner based on charges in the register.

IMPORTANT NOTE

At every move‑out, you must Return the Deposit.


Returning a deposit does NOT mean refunding it to the tenant. It means:

  • Removing the deposit from company liability
  • Removing it from the A560 Security Deposits Held Report
  • Bringing the funds onto the Lease Register, where they can be:
    • Applied to charges
    • Refunded
    • Forfeited
    • Or split between those options


This step is required to close out the lease properly.