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Home Forums Trust Accounting Refunding Tenant Overpaid Rent

  • Linda

    8 March 2022 at 9:04 am

    I do one of two work arounds.

    First option- Receipt the overpayment as a tenant deposit and then do a once-off payment to the tenant, you will need bank details. This option is only viable when you know they have overpaid at the time of receipting.

    Second Option – When the overpayment occurs due to , say a tenant has moved out of a property a few weeks prior to the end of the fixed lease or their nominated vacate date and have paid their rent to the end of the lease/notice. In this instance where the tenants have paid up rent I do not disburse to the landlord until we either secure the new tenant, or the vacate date passes – this way IF we need to do a refund we have the funds available. If we secure a new tenancy before the vacate/notice date then the tenant is due a rent refund of the overpayment of rent.

    To do this I created a Creditor ledger which I call “Tenant Reimbursements”. If we have to do a refund to a tenant I raise a payment to the “Tenant Reimbursement” ledger which I update with the relevant tenant bank details.

    This can be problematic as you must remember to amend the bank details – I get around this by changing the payment type to cheque and removing the bank details after each payment.

  • Fiona

    18 March 2022 at 2:44 pm

    Hi Saffron,

    If we get overpaid rent then we put this to deposit in trust on the tenant account.

    We then ask the tenant to fill in a banking details form we created. Confirm bank details when we receive the form back and then use the one off payment to refund the rent back to the tenant – it will then create your ABA file to go to the bank.

    I hope this helps