When entering into almost any lease, a tenant has to pay a security deposit upfront to the landlord. Simply put, it's a monetary deposit given to a landlord as proof of intent. Security deposits can be either refundable, nonrefundable, or partially refundable, depending on the terms of the lease. As the name implies, the deposit is intended to be a measure of security for the landlord in case anything were to happen to the property during the tenant's stay.
Landlords generally apply security deposits as rent from tenants who cannot otherwise pay or use them to repair damage caused by tenants.
Security deposits are not considered taxable income and cannot be deducted as such. Local laws often treat security deposits as trust funds. Security deposits that are used as final rent payments must be claimed as advance rent and are taxable when paid.
When you create a lease agreement on ManageCasa, you can specify the security deposit amount and when it is due.
You can now find how to specify the Security Deposits in step 3 of this Help Center article::
How to specify Security Deposits
1. Navigate to Lease Management on the left side menu.
2. Click the blue Add button on the new screen to create new lease.
3. Please refer here for the basic walkthrough for creating a lease.
4. Scroll down to the Security Deposits.
5. Specify the amount, Deposit Due Date, and to which account will it be credited to.
6. You can click Save and continue later to save your work and return to it later. You can see a summary view of the agreement and make edits.
7. Once all the terms are finalized, click Publish to notify your tenant(s) that the lease is ready to be viewed and signed. The tenant will be able to view the lease in the Leases tab on their profile.
Publishing the lease also generates automated transactions as you specified.
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