Owner Held Security Deposits
Eugene Korsunsky
Hi All,
I’m back at it again with the Owner Held Security Deposit. We have a couple of clients that insist on holding the security deposit and unfortunately they are our largest two clients so we are forced to work with that to retain their business.
Currently what I have setup in PW is a separate security deposit bank account for these owners. Typically we have the deposit checks made out directly to the owners and we just track the amount that is held but do not have access to their actual accounts. Sometimes a check is written out to us, how would you guys handle that? Would you do a deposit then an owner draw for that check or just manually write a check and ignore the transaction through your bank?
Eugene Korsunsky
Daren Roberts
Eugene,
We set-up an income account called “Owner Held Deposit” which pays out to the owner. We create the charge on the tenant ledger and receipt the funds and the owner receives it in their next draw. This way the paid charge is on the tenant ledger for our records. Both owner and tenant are required to sign our Security Deposit Addendum that places the liability on the owner for the security deposit funds.
I know Pware suggested a different way of doing it, but this is very clean and easy.
J. Daren Roberts
Managing Broker
New Age Real Estate, LLC
P 303.800.1670
F 1.866.310.2578
www.NewAgeRE.com
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Michael Vinocur
But in that case, the tenant ledger doesn’t show their security balance, does it? We have a situation where one of our owners wants to still collect certain rents from retail tenants, so we track those in a dummy account called “Client Account – Outside Bank” (of course, we’re dependent on the owner telling us when they collect such checks). The only problem is that if you are enforcing default bank accounts, every time you want to post such a payment you have to turn that preference off since this outside account is not our default account.
I could see doing a similar thing for this security account requirement. I the case of checks made out to the management company for security, you could deposit them into a “security transfer account,” while crediting the tenant’s security account on their ledger. Then just write a check to the owner that credits “security transfer account” and debits “Security – Outside Account”. All other security received made out to the owner gets posted against the tenant’s security ledger account and the “outside account.” In theory, in the end, tenant security held and this outside account should reconcile.
Hope that make sense.
Regards,
Mike
_______________________
Michael Vinocur
Building Equity Management LLC
611 Broadway, Suite 817
New York, NY 10012
Phone: 212-489-5060
Cell: 212-380-7953
Fax: 212-504-8323
Eugene Korsunsky
Michael,
Would you write the check manually?
Let me just recap to see if I understand correctly.
1. You would deposit the Security deposit to a standard Security Account (1005)
2. From there you would manually write a check to owner
3. Do a journal entry to transfer funds to a dummy account such as “XXXX Owner Security Deposit”
Let me know if that’s not the best way…
Thanks for your guys’s input!
Eugene Korsunsky
Michael Vinocur
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From: propertyw...@googlegroups.com [mailto:propertyw...@googlegroups.com] On Behalf Of Daren Roberts
Sent: Thursday, January 31, 2013 1:41 PM
To: propertyw...@googlegroups.com
Subject: RE: Propertyware-Users: Owner Held Security Deposits
Eugene,
We set-up an income account called “Owner Held Deposit” which pays out to the owner. We create the charge on the tenant ledger and receipt the funds and the owner receives it in their next draw. This way the paid charge is on the tenant ledger for our records. Both owner and tenant are required to sign our Security Deposit Addendum that places the liability on the owner for the security deposit funds.
I know Pware suggested a different way of doing it, but this is very clean and easy.
J. Daren Roberts
Managing Broker
New Age Real Estate, LLC
P 303.800.1670
F 1.866.310.2578
www.NewAgeRE.com
<image002.jpg>
From: propertyw...@googlegroups.com [mailto:propertyw...@googlegroups.com] On Behalf Of Eugene Korsunsky
Sent: Thursday, January 31, 2013 11:11 AM
To: propertyw...@googlegroups.com
Subject: Propertyware-Users: Owner Held Security Deposits
Hi All,
I’m back at it again with the Owner Held Security Deposit. We have a couple of clients that insist on holding the security deposit and unfortunately they are our largest two clients so we are forced to work with that to retain their business.
Currently what I have setup in PW is a separate security deposit bank account for these owners. Typically we have the deposit checks made out directly to the owners and we just track the amount that is held but do not have access to their actual accounts. Sometimes a check is written out to us, how would you guys handle that? Would you do a deposit then an owner draw for that check or just manually write a check and ignore the transaction through your bank?
Eugene Korsunsky
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Eugene Korsunsky
Michael,
Thank you, I will call you tomorrow morning to make sure I don’t mess things up!
Thanks!
Theressa Riggs
Create a new account on your "chart of accounts"
(while still having your normal 2XXX - sec dep)
When creating the new account entitled "Sec Dep - Pd to Owner" you select "NO" for the escrow account. This will send the funds to the owner and show as you need it to on the tenants ledger. Any liability account checked off as an escrow account will hold funds. BE CAREFUL when making charges on those specific ledger. You always need to charge the sec dep as that new pd to owner liability instead of your normal account. Good luck remembering lol