Create a lease
Leases can be found in the Tenant section of the software in the Tenant’s screen, under the Leases SubPanel as shown above. You can find more details on how to access the Tenants section of the software by clicking here. Leases are used to help you manage your rentals, can be used to automatically create recurring entries for you through the use of Scheduled Accounting Entries, Invoices, and Receipts, as well as generate the Expiring Lease and Rent Roll reports and so on.
Enter recurrent rent payment and lease information
Each time you create a lease, a Scheduled Accounting Entry, as well as a Scheduled Invoice and Receipt by default are automatically created for you based on the Lease information at the Frequency you specified in the lease (monthly for monthly rents, and so on).
**IMPORTANT: Please note that the Scheduled Entries are ONLY created when you first save the Leases. If you later edit the Lease the Scheduled Entries will not be edited, this has to be done manually for safety reasons. This is intentionally done as doing so can lead to all kinds of complications and unexpected results (including possible overlapping, duplicating, or missing rents and so on). Therefore if you need to edit a Lease you should also then edit the associated Scheduled Entries. If you are editing the scheduling portion of the Lease then please note that you will have to delete the associated Scheduled Entries and manually re-create them, for the same reasons. You can also find more details about this in the Scheduled Accounting Entries section of the user manual.
Getting back to Leases and Scheduled Entries, the Scheduled Entries will in turn will create Suggested Entries at the appropriate times with pre-defined Advance Notice for you to process and approve to the main accounting table (see creating a scheduled entry in accounting for more details).
**IMPORTANT: When a Tenant moves out or their status changes from Current to a non-Current status, you will also have to delete the Scheduled Entries. Although creating a Lease automatically creates Scheduled Entries, again for you they are not linked because of several reasons. For example the rent can be paid late, rents can be paid after a lease is completed, etc. As well some Tenants will transition to a month to month rent without a Lease, and therefore some people prefer to just keep the Scheduled Entries around rather than having to re-enter a new one manually. Similarly for the Status a Tenant may not have moved in yet but you want their first rent to be automatically generated ahead of time (the Advance Notice), or they may have left but still have time left on their lease (for example a tenant that is no longer living there but still has some time left on the lease, or a parent leasing a unit for their college kid during the summer).
Renewing a lease
There are two steps to renewing a lease:
First you need to close the existing lease (Lease End Date) in the lease by adjusting the Lease End Date and Move Out Date. These dates are often the same but this may not always be true such as students moving out before a Lease is terminated. In any case it is strongly advised to create a new Lease entry (through the Renew option) rather than editing an existing lease when a lease is being renewed. Editing a Lease with new dates will mean you are overwriting the old Lease information and so will lose that data. If you create a new Lease then you will have the Tenant’s full Lease history. This can be very important in the unfortunate case that you have to go to court and need your tenant’s past lease history.
Secondly, because the Lease isn’t connected to the Scheduled Entries, you will most likely want to delete the Scheduled Entry created from the previous Lease. And as you’re creating a new lease, new Scheduled Entries will be automatically generated for you for the new Lease.
**TIP: If the Tenant is transitioning to a month to month Lease, then the most common method to record this is to create a new Lease with a Lease Start Date but no Lease End Date. This means the lease is ongoing, or month to month.
You may also simply press the “Renew” button on the right side in the Lease view (or in the popup menu if you right click on the Lease in the Leases table) to automatically renew the lease using the Rent Increase values already entered in the Lease.
You should then see the renewed Lease below current one under the “Leases” tab for the selected Tenant.
Increasing the rent
There are several ways to increase the rent of a lease.
In most cases, rental increases occur when leases are renewed, which means you can just create a new Lease through the Renew feature of the software as described in the section above. If this is not the case and the rent is increase midway through a lease, then the recommend solution is to break the Lease up into two separate Leases, one for each part of the rental amount.
If the tenant is renting on a month to month basis, it is likewise recommended that you end the previous month to month Lease and create a new Lease with the new rental amount. The biggest advantage of doing this is that you retain an accurate record of exactly what rental amount was paid when, should you ever need this information.
Additionally, you may also go under the “Leases” edit Rent Increase values at any time. You can choose between a percentage increase or flat amount.
Pro-rated rent
If you select the Pro Rated option for the Lease the software will then automatically adjust the Scheduled Entries for you (Scheduled Accounting Entries, Invoices, and Receipts) based on the Lease information so that everything is Pro Rated for the first rent. This includes creating the first Pro Rated rent as Suggested Entries and all other rents being created through the normal Scheduled Entries process. The calculations are all based on the rent amount and the number of days the rent is Pro Rated for. Should you have a different calculation you can manually override the entries the software created for you.
So for example if you create a monthly Lease starting on the 11th and Pro Rated it then the first month would be the 11th to the end of the month and all rents after would be scheduled for the 1st of the month. If however you created the Lease and didn’t select Pro Rated then that means the rents are all due on the 11th. If you meant to create set the Lease as Pro Rated then you will just need to edit the Scheduled Entry(s) and manually re-create them for the 1st (and vice versa if you accidentally selected Pro Rated when you meant for the Lease not to be Pro Rated).
Late fees
The software offers the ability to set a fixed Late Fee for automatic late fee calculations in the Accounting system (see Creating a Scheduled Entry in the Accounting chapter for more details). In essence when you click on the Late Fee option in the Accounting section the software is smart enough to find the appropriate Lease entry and use the Late Fee you set in the Lease to automatically create a new Late Fee based Accounting Entry for you.