But why should there be a need to reverse a rent payment?   YES perhaps a wrong allocation occurs – so it is reversed and then receipted again straightaway – but why would a reversal occur to cause a deficit.   Sorry – perhaps I’m losing the point of the question

I have had to deal with this a long time ago when we were accepting uncleared funds into our account. The easiest way we found was to no longer accept uncleared funds. Also, we do not accept any personal cheques at all. We only accept business cheques.

Kath it has happened to us a couple of times where rent is credited to the wrong tenant and it is not picked up right away. It may be a week or even a few months later. It is picked up when a tenant vacates and they feel they are further in advance than what is shown or if a tenant starts showing up on the arrears list but they are sure they have paid rent. With Console it will not allow you to reverse the rent amount if there is enough money in the owners account. If there is not enough money we have to wait until the tenant that has the wrong entry pays rent again then we can do the reversal.

If a tenant feels that they are further in advance than what the computer system states we print off the tenant ledger and ask them to check it against what payments they think they have made. If they find an extra payment that is not on the ledger we then check it against the bank statement to try to find the missing transaction. It doesn’t take too long to find any error as long as the tenant has their receipts.

This is all ok as long as both tenants are still at the property. We just had an incident where the tenant that had too much money credited to them had already left. We were lucky to have been able to recoup the money from this tenant that had left almost 6 months prior to the error being picked up. If she refused to pay we would have had to pay it from our general account

How does this happen?  Its just data entry errors. Our tenants are given a tenant number. We have found that the errors occur when the tenant numbers are similar. eg rent is credited to tenant 329 rather than tenant 529.

Margaret www.dmrealty.com.au

Ahh  now I get you!    ;-)    yes a yucky messy error thats for sure.   Our system would let us do a journal from our Comm or Let Fees to the tenant to help correct it. 

A common one is with Rent Pay Cards. Depending on what provider your use & what option you take.

We are currently with ReConnect One Card, every now and then a tenant will deposit money through ReConnect or their direct debit will go through ReConnect however they will not have enough money in their bank account to cover the transaction.

The money is covered by ReConnect & sent through to our trust & automatically receipted. The money will then be reversed out of the trust by ReConnect when the funds bounce. This usually isn’t a problem as the paid to dates are adjusted when the reversal comes out. It does become a problem when the tenants funds bounce the day after EOM or Mid Month has been run and “funds” have been transffered to the owner.

Margreta That is not good. The payment provider should not be depositing uncleared funds into your trust account and then taking it out as they see fit. Your trust account can be overdrawn if you have already disbursed the funds to the owner. It is not legal to overdraw a trust account and if picked up by an auditor they are meant to report this to the OFT.

IPayRent is the payment system we use. They only deposit cleared funds into our trust account.

I would be contacting your provider to only have cleared funds deposited or change providers.

Your Principal Licencee could be fined for overdrawing the trust account

Margaret www.dmrealty.com.au

Margreta I too was going to “red flag” your comments about  ReConnect but Margaret bet me too it!      It would be in everyones best interest to speak to them and have their system changed.   Good luck!

Overdarwing the trust account is a serious matter. Another reason that I am phasing out over the counter at the bank deposits from our tenants. If they deposit a cheque over the counter and the cheque bounces the trust account can be overdrawn if a disbursement has already been made.

IPayRent only deposits cleared funds so that is our preferred payment option now. In QLD we have to have two other options so we use Direct Deposits, Netbank Transfer, Money Order or Bank Cheque.

Each of these methods ensure that only cleared funds are deposited in the trust account.

Margaret www.dmrealty.com.au

Margaret, you make a good point about IPayRent not transferring funds until they are actually cleared. I have also found the ability to see what funds for tenants and properties are waiting to be cleared also makes this process easier, as I know which tenants have at least commenced a transaction. Another feature in my opinion of the iPayRent system.