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User Guide: Security/Construction Deposits, Refunds, and Forfeitures

This guide explains how to manage refundable deposits within the system, including common use cases like architectural projects and amenity rentals. It covers the full deposit lifecycle—from recording and tracking funds to issuing refunds or applying forfeitures when necessary.

Purpose

Associations often need to collect refundable deposits in a variety of situations. Common examples include architectural projects—such as new home construction or pool installations—where heavy machinery may pose a risk of damage to community property like roads or common areas. Deposits may also be required for amenity or pavilion rentals to ensure proper use and coverage for any potential damages.

This guide walks through the full lifecycle of these deposits within the system, including how to properly record and track deposits, process refunds to homeowners or builders, and handle situations where deposits are forfeited to the association.

Security Deposit Settings

To set up your Security/Construction Deposit bank account and Income GL:

    1. Navigate to Accounting > Settings > Default GL Codes
    2. Select the Edit button
    3. Complete the following fields:
  • Security Deposit Bank Account: Select the GL for the bank account where all security deposits will be deposited
  • Security Deposit: Select the GL where the income will be recorded
  1. Select Save
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Adding a Security Deposit

    1. Navigate to Accounting > Receivables > Homeowners
    2. Search for the unit
    3. From the Options menu, select Receive Payments
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  • You can also access the Options menu from within the homeowner drawer
  • Deposits can also be added in bulk by navigating to Accounting > Receivables > Deposits & Payments

4. Select the Security Deposits tab

5. Complete the following fields:

  • Bank Account to Create a Deposit: Confirm this is the correct bank account
  • Deposit Date: Enter the date of the deposit
  • Single Check #: Select if one check will be applied to multiple units
  • Subledgers: Select the appropriate subledger, or leave as Assessments if not in use
  • Unit: Search for and select the unit
  • Cost Center: Confirm the cost center is correct
  • Amount: Enter the deposit amount
  • Check #: Enter the check number
  • Project: Select an architectural project if applicable; otherwise leave blank
  • Memo: Optional field (e.g., third-party payee name)
  • Select Save
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Reversing and Voiding Security Deposits

Navigate to Accounting > Receivables > Homeowners

Search for the unit and open the drawer

Select the Security Deposit tile to view all deposits for the unit

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From the Options menu:

  • Select Reverse to show the in/out of the deposit, or
  • Select Void to hide both the original transaction and the void
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Select the reversal/void date

Enter a reason

Select Reverse or Void

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Refunding Security Deposits

  1. Navigate to Accounting > Receivables > Deposits & Payments
  2. Select Security Deposit, then click Refund
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Complete the following fields:

    • Unit: Search for and select the unit
    • Security Deposit: Select the deposit being refunded
    • Cost Center: Auto-populates from the original deposit (not editable)
    • Refund Date: Enter the refund date
    • Type: Select how funds will be returned (Check or Cash)
    • Available Amount: Displays the deposit amount
    • Amount: Enter the refund amount (less any forfeited portion)
  • Example: If $200 is forfeited from a $1,000 deposit, enter $800
  • Description: Optional field
  • Select Submit
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Printing the Refund Check

  1. Navigate to Accounting > Payables > Checks
  2. Select the Bank GL Account tied to security deposits
  3. Select the check(s) to print
  4. Click Print Selected Checks
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  5. Confirm the check number and position, then select Print
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  6. Select Open
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  7. Review the check and print
  8. Return to the system and select Yes if the check printed correctly
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Once complete, the Security Deposit tile will update to reflect the remaining balance.

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Forfeiting All or Partial Security Deposits

  1. Navigate to Accounting > Receivables > Deposits & Payments
  2. Select Security Deposit, then click Forfeit
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Complete the following fields:

  • Unit: Search for and select the unit
  • Security Deposit: Select the applicable deposit
  • Cost Center: Auto-populates from the original deposit (not editable)
  • Forfeit Date: Enter the forfeiture date
  • Forfeit to GL Account: Select the Income GL
  • Transfer to Bank: Select the bank account where funds will be transferred
  • Available Amount: Displays the remaining deposit balance
  • Amount: Enter the forfeited amount
  • Description: Optional (e.g., reason for forfeiture)
  • Select Submit
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Journal Entries

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End of Guide