Refund a deposit less deductions for a custodial deposit scheme

If you need to add deductions to a tenancy whose deposit is held in the custodial deposit scheme, you can do so. Any deductions from the deposit are added as charges to the tenancy. When the deposit monies are claimed, the deductions can then be paid to either the landlord, and/or against any outstanding supplier invoices.

If your agency uses the custodial deposit scheme, the deposit refund is processed on the schemes website. Once all parties agree to the deductions, the agency claims for the total deductions and the remaining balance due to the tenant is paid directly to the tenant by the scheme. 

There are two types of deposit schemes:

• Custodial deposit scheme - The deposit scheme holds deposit money during the tenancy  
• Insured deposit scheme - The agency holds deposit money during the tenancy
  For more information on Refunding a deposit less deductions for an insured scheme, click here

This article includes: 

• Processing the deposit
• Add Refund Item to make the deposit available
• Add tenancy deductions
• Balance refunded directly to the tenant by the custodial deposit scheme

Processing the deposit

The steps below should only be carried out when the claim for deductions has been received in your client account.

1. Click Tenancies on the main toolbar
2. Select the relevant tenancy from Recent & Favourite Tenancies
   1.  Alternatively, find the tenancy using the Search Tenancies bar in the top right
3. Click Tenancy on the side menu
4. Click Actions
5. In the dropdown menu, click Deposit Bank Transfer 
6. The Transfer Deposit window opens
   1. Tenancy Deposit Held - This is the amount the tenants paid when they started the tenancy 
   2. Transfer Date - This is the date which you received the claimed funds from the deposit scheme, into your client account
   3. Transfer Amount - The total agreed amount of deductions claimed from the deposit
   4. Transfer out Bank Account - The virtual deposit account referring to the deposit scheme
   5. Transfer in Bank Account - The client account into which the deposit has been received
   6. Bank References - References can be entered if required
7. Click Update

Add Refund Item to make the deposit available

Even though we have transferred the deposit into the client account, you now need to make the deposit available to process the deductions, before you can offset deductions against it. 

1. Click Actions
2. In the dropdown menu, click Refund 
3. The Refunds For This Tenancy window opens. Click Add Refund Item
   1. Charge Item - Click Deposit, and then tick Deposit from the list, to make the deposit available to use
   2. Net Amount - Enter the amount you have received from the deposit scheme (as noted in the previous section)
4. Click OK

Add tenancy deductions

In these steps, you can add all the deposit deductions during the refund process. If there are any outstanding charges already added to the tenancy, these appear on the Refunds For This Tenancy screen.

1. Click Actions
2. In the dropdown menu, click Refund
3. Click Add Additional Charge
4. The Add Additional Charge window opens
   1. Charge Item - Click Expenses, and then tick an expense option from the list 
   2. Description - Edit this to suit the description of the expense
   3. Net Amount - Enter the amount payable to the supplier
   4. Supplier - Search for and select the supplier to whom the expense is payable
   5. Supplier Reference - Add the supplier's invoice number (if available)
   6. Link PDF - If a scanned copy of the invoice is available, click + to upload it into Alto
   7. Works Order - Link the expense to an existing works order, if one for this work is already in Alto
5. Click OK

If you need to post an expense to reimburse the landlord for any sundry item:

1. Click Actions
2. In the dropdown menu, click Refund
3. Click Add Additional Charge
4. The Add Additional Charge window opens
   1. Charge Item - Click Landlord Income, and then tick Sundry
   2. Description - Edit the text as you want it to appear on the landlords statement
   3. Net Amount - Enter the amount agreed with the landlord
5. Click OK

The Refunds For This Tenancy screen displays the deposit received from the scheme, less the amount of deductions.

1. If there is a portion of the deposit to be returned to the tenant, click Edit to amend the deposit so that it equates to the total number of deductions
   (The Total To Refund should show zero)
2. Click the Refund Type dropdown menu and click Internet
3. Untick Send Refund 
4. Click Update

For more information on Refunding monies held on a tenancy, click here

Balance refunded directly to the tenant by the custodial deposit scheme

You will need to clear the remaining balance of the deposit from the tenancy, which is refunded directly to the tenant by the deposit scheme.

1. Click Actions
2. In the dropdown menu, click Refund
3. Click Add Refund Item
4. The Add Refund Item window opens
   1. Charge Item - Click Deposit, and then tick Deposit from the list, to make the deposit available to use
   2. Net Amount - Enter the balance which has been transferred directly to the tenant by the deposit scheme 
5. Click OK
6. On the Refunds For This Tenancy screen
   1. Click the Refund Type dropdown menu and click Internet
   2. Untick Send Refund 
   3. Click the Refund from Client Account dropdown menu and click the Deposit Account
   4. The Total to Refund is the amount returned directly to the tenant by the deposit scheme
7. Click Update