How to read Owner Statements & Rent Receipts
Reading an Owner Statement or in a tenant’s case, a Rent Receipt, can sometimes be confusing.
In a perfect world rent payments are made for the full week or fortnight in advance for the timeframe agreed upon (i.e. weekly, fortnightly, monthly etc). However, there are some circumstances that could result in “Part Payments” and “Deposits”. These are explained below.
Multiple Tenants – Part Payments
If there are multiple tenants within one property who pay individually, each payment will sit as a part payment until the full rent is received.
An example scenario is outlined below
Weekly Rent: $400
No of Tenants: 2
Tenancy Start Date: 01/03/2023
Paid to Date: 28/02/2023
Rent Receipt
If Tenant 1 pays their share of $260 on 26/02/23, the Tenancy Receipt will record –
Rent paid to 28/02/2023 with part payment of $260
In this instance, the paid to date has not changed as the full rental payment has not yet been received.
When Tenant 2 pays their share of $140 on 27/02/23, the Tenancy Receipt will then record –
Rent paid to 07/03/2023 Amount $140
Having now paid the full amount of the agreed rent, the paid to date moves forward.
Owner Statements
Owners receive a monthly statement reflecting the incoming and outgoings of rent. In the example above, an Owner Statement will record both rental payments separately as noted on the Rent Receipt.
Amount: $260
Notation: Rent paid to 28/02/2023 with part payment of $260.00 (previously paid to 28/02/2023
Amount: $140
Notation: Rent paid to 07/03/2023 previously paid to 28/02/2023 +$260
Rent Increases – Part Payments
Another example of when rent may be receipted as a part payment, can be due to a rent increase. As rent is due to be paid in advance, there is sometimes confusion as to when the new rent should start from. If for instance the tenant starts paying their new rent amount earlier than required, the extra funds will be shown as a part payment.
Weekly Rent: $400
Current Rental Period: 01/03/2023 – 07/03/2023
Rent Increase: $450
Rent Increase Date: 08/03/2023
Rent Receipt
If the tenant pays the new rental amount of $450 for the current rental period before it becomes due, the rent receipt will note –
Rent paid to 07/03/2023 with part payment of $50
Owner Statements
In this scenario, the Owner Statements will show –
Rent paid to 07/03/2023 with part payment of $50 (previously paid to 28/02/2023)
The tenant is therefore in credit and may pay a reduced amount the following week. If they continue to pay the increased amount, the statements will always reflect a part payment.
It is important to note the owner receives all funds paid during that monthly cycle. Dates will not roll over until a full weekly amount is received. Part payment refers to the amount towards the new period.
Deposit Payments
Deposits can also be referred to as “tenancy funds”. This is how we receipt payments from tenants that may relate to overpaid rent when they are due to vacate the property or if they have rounded up an invoice. Receipting the funds to Deposits prevents these funds being paid out to Owners and potentially having to be repaid to the Tenant. These funds are recorded on the tenancy ledger and not recorded on the Owner Statement.
For example, if a tenant has not ended their direct debit for rent payments and they pay past their vacate date, the additional funds will be receipted to Deposits and will be reimbursed back to the Tenant.
If you would like further information or explanation regarding part payments or deposits, please do not hesitate to contact our Trust Accountant, Pippin Blinco, as we understand the statements and receipts can be confusing.