How to close a tenancy and refund a deposit

In this article we will look at the process of closing a tenancy and refunding the deposit for deposits held in both an insured and custodial scheme.

Step 1: Go to the close tenancy screen. 

Step 1 is the same for both insured and custodial scheme. Go within the tenancy -> click on ‘close tenancy’

Step 2: Allocate the deposit held

Step 2 is the same for both insured and custodial scheme. Allocate the full deposit back to the tenant: Add the tenancy end date and then click on allocate to tenants. You will be able to view the deposit held figure here. Always allocate the FULL deposit held amount regardless of whether there were deposit deductions. For example in this case we will allocate the FULL £500

Step 3 – Deductions: 

Step 3 is also the same for deposits held in an insured and custodial scheme If the tenant has any outstanding balances prior to closing down the tenancy, you can use the deposit to clear the arrears. Any outstanding charges e.g. rent will appear on this screen, see below £100 rent appearing, which can be allocated to the deposit held

To add deductions click on add deductions. You can then add in the deduction, for example sundry charge/disbursement charge (recharge), add in the description and amount then click save. Multiple deductions can be added this way. 

If you are a letting agent/property manager use disbursement charge (recharge) as the deduction. Once added, tick 'credit property owner'. This will create an amount payable to the landlord on the PO statement. If you are a landlord, add the deduction as a sundry charge and leave that box unticked. 

Step 3 – Tenant Remittance: 

Once everything has been allocated and any deductions have been added. Select the remittance bank account. This is the bank account where you will be refunding the tenant their deposit from. If you are using an insured scheme you would select your own bank account as you are holding the deposit and refunding the tenant. If you are using a custodial scheme to hold your deposits select your custodial control bank account as showed below as the tenant will be refunded directly from the custodial bank account. If you haven't added this control custodial bank account you can do this from financials > bank account. Lastly click on proceed to close the tenancy.

This creates a tenant remittance related to the amount refunded back to the tenant.