Refunds can be issued to applicants via the application ledger or to tenants via the tenancy ledger, allowing you to send available funds on the ledger balance back to the applicants/tenants.

Examples of where this may happen are if an application falls through and you agree to pay back the holding deposit, or if a tenant has overpaid their rent.

To get started, head to the relevant ledger and click Actions > Issue Refund.

Enter the date and amount to refund, add a description and choose which tenant to pay. You will be able to select from any tenants on the tenancy, and if a tenant has multiple bank accounts set up, you can select which account. When ready to proceed, click 'confirm refund'.

For more information on managing client bank details, see this help article.

This refund will now appear on the ledger as a pending payment.

Once a refund has been confirmed and is pending on the ledger, head to Payments to Make and go to the 'tenants' tab. Here you will see the pending refund, which you can select, choose the bank to pay from and then click 'Pay Tenants' to process that refund payment.

This will create a payment file as normal that you can use to make the physical payment.

Sometimes a tenant has to be refunded after their money has been allocated to the rent charge and paid out to the owner. For example, they overpaid, moved out early or paid a month in advance.

To refund a tenant, the money must be available on the tenancy ledger. Here, that money is now with the owner, so it has to be moved back onto the tenancy ledger first. Which route you take depends on where the money will come from.

First, you will need to work out where the full refund amount needs to come from.

For example, if the tenant pays £1,000 per month, and you charge a 10% management fee, then the owner received £900, and the agency is paid £100.

To refund the full amount, the owner would need to pay you back £900, and the agency would need to issue a refund to the owner via a credit note to refund them the £100 deducted as management fees.

However, in a case where the tenant vacated early and is only due a partial refund of the rent, for example £500, then the owner would need to pay back £450, and the agency would refund the owner £50 for the management fee, making up the £500 total.

When you receive the owner's payment for the money they were paid from the overpayment, receipt and reconcile it to the owner's ledger.

Then, from the owner's ledger, click Actions > Add Credit Note, and issue a credit note for the amount due as a refund from the agency for the management fee charged on the rent amount that is due to be paid back to the tenant.

You now have all the funds due back to the tenant on the owner's ledger; you can transfer them to the tenancy ledger. To do this, from the owner's ledger, click Actions > Transfer Funds. Choose 'Tenancy' as the recipient and search for the property address. Ended tenancies are listed too, so pick the tenancy that is owed the refund.

Now that the funds are back on the tenancy ledger, you can process the refund to the tenant. From the tenancy ledger, click Actions -> Issue Refund, then pay it from the Payments To Make > Tenants tab, as normal.

If the owner has a balance on their ledger that hasn’t been paid out yet, or money held in their float, you can use it directly.

On the owner's ledger, click Actions > Add Credit Note and issue a credit note for the amount due as a refund from the agency for the management fee charged on the rent amount that is due to be paid back to the tenant.

You now have all the funds due back to the tenant on the owner's ledger; you can transfer them to the tenancy ledger. To do this, from the owner's ledger, click Actions > Transfer Funds. Choose 'Tenancy' as the recipient and search for the property address. Ended tenancies are listed too, so pick the tenancy that is owed the refund.

Now that the funds are back on the tenancy ledger, you can process the refund to the tenant. From the tenancy ledger, click Actions -> Issue Refund, then pay it from the Payments To Make > Tenants tab, as normal.

If the owner is not sending money back separately, you can take it from their next income.

From the owner's ledger, click Actions > Add Charge and make it payable to the tenancy that is owed the refund, for the full refund amount.

If you are refunding your share of the management fee, from the owner's ledger click Actions > Add Credit Note for that apportionment.

When the owner next has income available, allocate funds for this owner from the Allocate Funds page to this charge, and the money then becomes available on the tenancy ledger.

Now that the funds are back on the tenancy ledger, you can process the refund to the tenant. From the tenancy ledger, click Actions -> Issue Refund, then pay it from the Payments To Make > Tenants tab, as normal.

Use this if the tenant needs refunding straight away, before the owner has paid anything back, and they have no funds available on their ledger or float.

On the tenancy ledger, click Actions > Add Credit Note, and issue the credit note for the full refund amount due to the tenant. Then, click Actions > Issue Refund and pay it from the Payments To Make > Tenants tab, as normal.

Next, on the owner's ledger, add a one off charge payable to the agency via Actions > Add Charge, for the owner's share of the refund amount. This is the refund due from the owner minus any management fee apportionment you are refunding. It lets you recover the money the agency has paid out.

If the tenant is staying in the property, you may not need to make a refund at all. Instead, use the three-dot menu > Credit Charge on an upcoming rent charge to reduce what the tenant owes, and add a description explaining why this credit is given.