Skip to main content

Transferring Security Deposits Between Tenants/Units (Accrual Accounting)

How to handle security deposit transfers between tenants or units in Property Matrix

Written by Jimmy Chowdhury

Changing the Primary Tenant

  1. Click Properties.

  2. Open the specific unit.

  3. Go to the Lease tab.

  4. Click the Details tab.

  5. Expand Lease Information.

  6. Edit the Primary Tenant field.

Transfer a Security Deposit Between Tenants

Original Tenant

  1. Click Tenants.

  2. Select the original tenant who initially paid the deposit.

  3. Go to the Transactions tab.

  4. Click New.

  5. Select Security Deposit Application.

  6. Save the application.

  7. Go back to the lease page and click New Invoice.

  8. Choose an appropriate account and item.

  9. Save the invoice.

  1. Return to the Transactions tab.

  2. Edit the Security Deposit Application.

  3. Apply it to the newly created invoice.

This removes the security deposit liability from the original tenant’s account and moves the amount into the selected pass-through account.

New Tenant

  1. Select the tenant receiving the deposit.

  2. Create a New Invoice.

  3. Set the item type to Security Deposit.

  4. Go to the Transactions tab.

  5. Click New.

  6. Select Credit Note.

  7. Use the same account item as the original tenant’s invoice.

  8. Apply the Credit Note to the Security Deposit invoice.

This creates a security deposit balance for the new tenant and brings the pass-through account back to zero.

Important Note

The bank account will still reflect the original security deposit payment from the initial tenant. Transferring the security deposit between tenants does not affect the bank account balance.
​
​Transferring a Tenant’s Security Deposit Between Units

When a tenant is transferred from one unit to another, their security deposit must be reassigned appropriately.

  1. Process a Refund for the Old Lease: Begin by refunding the security deposit associated with the tenant’s old lease. This ensures the deposit is completely disassociated from the old unit.

  2. Address the New Lease: Once the refund is processed, create a new deposit entry for the tenant’s new lease. This ensures the financial records reflect the deposit in alignment with the tenant’s new unit.

This method aligns deposit records with tenant location changes and helps reduce administrative confusion.


Correcting Errors in Security Deposit Invoices

Mistakes in security deposit invoices can be corrected with a step-by-step process.

  1. Understand the Issue: Applied security deposit payments cannot be directly modified.

  2. Create a New Invoice: Navigate to the invoice creation module. Insert a new line item marked as Security Deposit. Enter the corrected or additional amount as required.

  3. Verify Correct Totals: Since all security deposits are pooled together in Property Matrix, the system ensures that combining deposits maintains accurate records.

  4. By following this process, errors in financial documentation are minimized while preserving the integrity of tenant and deposit records.

Did this answer your question?