Rents > How to issue a refund for an overpayment

Rents > How to issue a refund for an overpayment

This guide is based on a tenant paying more rent than they should have and you need to issue a refund. This works with the XERO integration, but is NOT intended as a way to handle deposit deductions and refunds. It is intended as a way to handle payments the tenant made in error.

Example

The rent book (rent collection) below shows the tenant paid £1,200 on the 10th of December. He did this as he was going away on a nice holiday. Suddenly a family emergency happened and we agreed to release him from his tenancy ending it on the 15th of January, we also agree a re-letting fee of £150.





STEP 1 - Unreconcile the payment(s) and correct the rent book to what you would have had it should they not have overpaid.

So, we first unreconcile the £1,200 in its totality. Then we use our End Tenancy button to terminate the tenancy on the 15th of January.
  • Dissociate the payment from both charges
  • Then edit the tenancy and set the end-date, updating the tenancy rent schedule



STEP 2 - Create the overpayment record

Your rent book will now look like the one below, with some money unassigned. This unassigned £759.68 is what you will be refunding to the tenant.

  • Create a new “Money Due” item for the full amount you will refund, choose ‘Other Tenant Costs’
  • Assign the full remaining money to that item






STEP 3 - Now assign the remaining money against that charge and refund it

You now have a charge to assign the remaining money against, do that and the rent book should now indicate that all monies have been assigned. The follwing step you want to do immediately so that you don’t create any settlements and disburse this money to a property owner.

  • View the new rent due item (the overpayment - Paid back to tenant, that was just created) and click the REFUND button.



STEP 4 - Observe your good work

As shown below you now have a rent book that balances out, the refund of £759.68 indicates it is coming from that payment of 10 December, and the charge item/line of £759.68 indicates it is fully refunded.

Please note:

  • You can only refund rent due items what are fully “paid”, what that means is the item doesn’t have any amount outstanding.
  • If you have a rent due item of £500 but want to refund only £300 then you should split the rent due item out into two separate charges of £300 and £200. This will allow you to refund the £300.
  • XERO, if you use the XERO integration a refund will create a new ‘Bill-to-Pay’ within XERO to send over the £759.68 to the tenant. You will need to manually make the bank transfer but then have a bill-to-pay that you can reconcile it against.



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