PeopleSoft Real Estate Management 9.1 PeopleBook

Setting Up Security Deposits

This chapter provides an overview of security deposits and discusses how to:

Set up security deposits.
Refund security deposits.

Understanding Security Deposits

During the life cycle of a lease, property damage that exceeds normal use may occur. Landlords collect a deposit from tenants to cover such damages. Such deposits are considered security deposits.

Security deposits form part of the general information of a lease. You can enter the security deposit information during the general lease entry process. Enter each deposit as a separate row in the grid.

You can define types of security deposits during the implementation of PeopleSoft Real Estate Management. Security deposit types enable the system to track whether the security deposit is a charge (cash), guarantee, or prepaid. If the deposit type is a cash deposit, then the deposit amount can generate a bill or payment depending on whether the lease is of payables or receivables type. If the deposit type is a bank guarantee or letter of credit, no processing is done as no cash is collected. Guarantor is a required field for a bank guarantee type of deposit. If the deposit type is prepaid, no processing is done when it is established, as the security deposit transaction has already been taken care of ahead of time. During the refund process, however, the system treats a prepaid deposit as a cash deposit, and includes it in refund processing.

If you want to increase or decrease the security deposit or change the payee or payor while the lease is active, you must create an amendment. You should handle security deposit values adjustments in a transactional sense. To increase the security deposit, add another row with the incremental additional amount. To reduce the security deposit, add another row with the amount to be reduced as a negative value. If you change the payee or payor for the security deposit on an amendment, the system uses the new payee or payor to process the refund.

As the landlord, you can refund the security deposit to the tenant if the damages to be collected do not exceed the amount of the deposit and a cash deposit from the tenant is outstanding when a lease is terminated. During the refund process, you can also add interest to the deposit amount or deduct for additional damages.

This table provides an example of how the system processes increases and decreases to security deposits:

Date	Deposit Type	Guarantor	Amount (USD)	Status
January 1, 2000	Cash		1000.00	Processed
March 1, 2000	Cash		(500.00)	Processed
May 1, 2000	Guarantee	Bank of America	5000.00
May 15, 2000	Cash		250.00	Processed
May 29, 2000	Guarantee	Bank of America	(1000.00)
Total Cash Deposits			750.00
Total Guarantee Deposits			4000.00

Setting Up Security Deposits

This section discusses how to add security deposits to a lease and override accounting distributions.

Pages Used to Set Up Security Deposits

Page Name	Definition Name	Navigation	Usage
Financial Terms - Security Deposit	RE_DEPOSIT_SEC	Real Estate Management, Lease Administration, Receivables Leases, Create New Lease, Financial Terms Click the Security Deposit Details link on the Financials Terms page. Real Estate Management, Lease Administration, Receivables Leases, Maintain Lease, Financial Terms Click the Security Deposit Details link on the Financials Terms page. Real Estate Management, Lease Administration, Payables Leases, Create New Lease, Financial Terms Click the Security Deposit Details link on the Financials Terms page. Real Estate Management, Lease Administration, Payables Leases, Maintain Lease, Financial Terms Click the Security Deposit Details link on the Financials Terms page.	Enter security deposit information.
Accounting Distributions	RE_LS_SEC_DST_SEC	Click the Accounting Distributions link on the Security Deposit Details page.	Override the business unit accounting rules for the security deposit.

Adding Security Deposits

Access the Financial Terms - Security Deposit page (click the Security Deposit Details link on the Financials Terms page).

Payee

Enter the entity to whom the security deposit is paid. The system uses the landlord as the default value. This field appears only for payables leases.

Payor

Enter the entity responsible to pay the security deposit. The system uses the tenant as the default value. This field appears only for receivables leases.

Ship To

Enter the vendor ship to location. This location will be used for VAT and SUT calculations by PeopleSoft Payables Voucher Build application. Only applicable only for payables leases. This is not a required field and if this is left blank Voucher Build will populate the default Ship To Location for the Vendor.

Add Security Deposit

Click to add a new security deposit. To add a new security deposit to an active lease, you must first create an amendment.

Accounting Distribution

Click this link to override the accounting distributions set up at the business unit level.

Security Deposit Log

Use the fields in this group box to add a security deposit entry. The system displays all security deposit entries for the lease with their statuses.

Deposit Date	Enter the date that the security deposit is added. The system provides the current date by default.
Deposit Type Name	Enter the deposit type. The system processes the security deposit by the type selected. Values are: Cash Deposit: Use to capture cash deposits. The deposit status is set to pending for cash deposits. Upon activation of the lease, the Process Deposits button becomes available for you to send the cash deposit to PeopleSoft Payables or Billing for processing. At lease expiration or termination, you can process any refunds for cash deposits that were received through the Refund Deposits page. Guarantee Deposit: Use to capture information from a bank guarantee or a financial institution. Because no funds were actually transferred, bank guarantees are not included in security deposit refund processing. The deposit status is blank for guarantees because no funds are received. Note. If selected, you need to enter the name of the bank or financial institution providing the guarantee in the Guarantor field. Manual Deposit: Use to record any prepaid security deposits where processing is not required. In some cases, a security deposit is required prior to the ability to activate the lease in the system and generate a security deposit transaction. In those cases, it is possible that an accounts payable or accounts receivable department has already issued the security deposit outside of the PeopleSoft Real Estate Management system; therefore, the deposit is prepaid. The system records the prepaid security deposits that are received against the lease but no financial processing takes place when the prepaid deposit is established or when security deposit refunds are processed (such as when the lease is expired or terminated). Prepaid deposits are treated as cash and are included in refund processing to be returned through the Refund Deposits page.
Guarantor	Enter the name of the guarantor. This field is required if you select a deposit type of Guarantee. All external contacts that are set up on any lease are listed in the prompt for the Guarantor field.
Reference	Use this field to enter check numbers and any additional information that relates to the security deposit.
Status	Displays the processing status of the security deposit. Values are: Pending: The deposit status is set to pending for cash deposits. Pending Process: This temporary status is assigned after the deposit rows are processed and before the lease is saved. Once the lease is saved, all the pending rows are changed to processed. Processed: This system displays this status after the security deposit is processed and the lease is saved. Refunded: The system displays this status after a deposit row is refunded. The lease is expired through the Refund page.
Total Cash Deposits	Displays the total cash deposits (including manual deposits and cash deposits). Any adjustments made through an amendment are reflected in this field. The security deposit refund process includes only cash or prepaid deposits that have been processed as eligible transactions for refund. The total cash deposits cannot be negative.
Total Processed Deposits	Displays the total deposits that have processed through the system. The security deposit refund process includes only cash or prepaid deposits that have been processed as eligible transactions for refund.
Total Guarantee Deposits	Displays the total guarantee from the bank or financial institution. The security deposit refund process ignores any guarantees.
Process Security Deposit	Click to send the deposit rows to the transaction queue. This button is visible only when the lease is in active or holdover status. For processing deposit rows for payables leases, all the rows in pending status are sent to PeopleSoft Payables and the deposit rows for receivables leases are sent to Billing. When a refund transaction is in pending status in the transaction queue, the system cannot process another security deposit.

Overriding Accounting Distributions

Access the Security Deposit Accounting Distributions page (Click the Accounting Distributions link on the Security Deposit Details page.)

The fields on this page differ depending upon the distribution selected. When you select a value other than None, the ChartField values become available for edit. All ChartFields are optional. If the ChartField values are not overridden, the values defaulted from the business unit setup will be retained.

Distribute By	Select either: Percentage: Select this value to change the accounting distribution by percentage for each financial term. Area: Select this value to change the accounting distribution by area for each financial term. The rent will be distributed based on the ratio of the areas. Amount: Select this value to change the accounting distribution by amount for each financial term. None: Select this option to use the accounting distribution set up at the business unit level.
Add Distribution	This button appears if you select Percentage, Area or Amount for the distribute by value. Click this button to insert a new distribution row.
Delete Distribution	This button appears if you select Percentage, Area or Amount for the distribute by value. Select a row and click this button to delete it from this page.
Select	This checkbox appears if you select Percentage, Area or Amount for the distribute by value. This checkbox is used to delete the distribution rows. Users can select all the distribution rows that they want to delete and click the Delete Distribution button to delete them.
Percentage	This field appears if you select Percentagefor the distribute by value. Enter a percentage amount for this distribution line. Percentage amounts must equal 100% to be valid.
Area	This field appears if you select Areafor the distribute by value. Enter the area for this distribution line. All lines must add up to the total rentable area for the lease to be valid.
Amount	This field appears if you select Amountfor the distribute by value. Enter the amount for this distribution line. All lines must add up to the rent specified for the financial term.
Valid	Used to indicate a valid combination of chartfields. When activating the lease, edit checking will be provided and the checkbox will be selected for each row representing a valid combination of chartfields. A lease cannot be activated until every accounting distribution is marked as valid.

Refunding Security Deposits

This section provides an overview of security deposit refunds and discusses how to refund security deposits.

Understanding Security Deposit Refunds

When a lease is expired or terminated and all outstanding payments are complete, any outstanding security deposits must be refunded or used to cover any damages that were incurred. The refund page collects all cash or prepaid processed deposits from the lease and includes them in the refund worksheet. You can add interest for the outstanding deposits or deduct for any damages. Once the final refund is calculated on the worksheet, you can process the refund back to the tenant. The refund can be negative or positive, meaning the tenant may owe the landlord additional funds or the landlord needs to refund the deposit back to the tenant. If the refund amount is positive, then the transaction is sent to PeopleSoft Payables. If the refund amount is negative, the system creates a billing transaction for additional funds to be billed to the tenant.

You can create refunds only for receivables leases. When a new refund worksheet is created, the prompt for the lease number displays only leases that are expired and deposits in a processed state. You cannot create a new refund worksheet when there is an existing pending worksheet for the lease; however, you can append an existing pending refund.

Note. You can create an amendment for partial or full refunds before the lease is expired by adding new deposit lines with negative amounts.

Warning! The receivables lease must be expired before you can process a security deposit refund.

Page Used to Refund Security Deposits

Page Name	Definition Name	Navigation	Usage
Refund Security Deposit - Final Security Deposit Refund Worksheet	RE_REFUND	Real Estate Management, Lease Administration, Receivables Leases, Refund Security Deposit	Process a security deposit refund.
Accounting Distributions	RE_LS_OPEX_CTG	Click the Accounting Distributions link on the Refund Security Deposit - Final Security Deposit Refund Worksheet page.	Override the accounting distributions defined at the business unit level.

Refunding Security Deposits

Access the Refund Security Deposit - Final Security Deposit Refund Worksheet page (Real Estate Management, Lease Administration, Receivables Leases, Refund Security Deposit).

Refund Date

Enter the date on which you want the system to process the refund. The system uses the current date by default, but you can change this value to any future date.

Payee

Displays the payee. If the amount to refund is positive, the payee is the entity to whom the system refunds the security deposit. If the amount to refund is negative, the payee is the entity who is responsible to pay the amount.

Add Interest

Click to insert an additional worksheet item for adding interest that was accrued for the security deposit. The system does not calculate interest for security deposits for a lease; therefore, you must track the interest manually. You can code interest to a different transaction routing code, which enables flexibility for a distinct general ledger account.

Add Deduction

Click to add deductions for damages to the property or any final charges to be paid by the tenant. You can code deductions to a different transaction routing code, which enables flexibility for a distinct general ledger account.

Refund Worksheet

When you click the Add Interest or Add Deduction button, the system inserts a new row in the refund worksheet.

Worksheet Item	Displays Interest or Deductions, depending on whether you select the Add Interest or Add Deduction option.
Total Deposits Processed	Displays the total deposits that were processed from the Security Deposits page. The system totals all of the processed deposit amounts to calculate this value. When the refund worksheet is in a processed state, the system retains the value in the worksheet and does not recalculate it.
Total Deductions	Displays the total deductions that were added to the refund worksheet.
Total Interest	Displays the total interest that was added to the refund worksheet.
Amount to Refund	Displays the amount to refund or collect. The system calculates the final refund on a worksheet that is processed back to the payee. The refund can be negative or positive, which means that the tenant might owe the landlord additional funds or the landlord might refund the deposit back to the tenant. If the refund amount is positive, then the system sends the transaction to PeopleSoft Payables. If the refund amount is negative, the system creates a billing transaction to bill additional funds to the tenant.
Security Deposit Details	Click the link to view the security deposit log on the Security Deposits page.
Calculate	Click to calculate the amount of security deposit refund. Because the security deposit refund page uses a worksheet model for processing, you can click the Calculate button as many times as needed to create what-if scenarios. The system calculates the amount to be refunded as (Total Deposits Processed + Total Interest − Total Deductions). Note. Calculation is automatically performed when the worksheet is saved.
Process Refund	Click to send the refund request to the transaction queue for PeopleSoft Payables processing. If the deductions are greater than the security deposit amount, the system sends a request to the transaction queue for PeopleSoft Billing to send an invoice to the tenant for additional fees. The details are sent to PeopleSoft Billing even if the refund amount is zero. After a refund worksheet is processed, the refund status is changed to Processed and the worksheet becomes read-only. When there is a pending refund transaction in the transaction queue, another refund cannot be processed.

Overriding Accounting Distributions

Access the Accounting Distributions page (Click the Accounting Distributions link on the Refund Security Deposit - Final Security Deposit Refund Worksheet page.)

The fields on this page differ depending upon the distribution selected. When you select a value other than None, the ChartField values become available for edit.

Distribute By	Select either: Percentage: Select this value to change the accounting distribution by percentage for each financial term. Area: Select this value to change the accounting distribution by area for each financial term. The rent will be distributed based on the ratio of the areas. Amount: Select this value to change the accounting distribution by amount for each financial term. None: Select this option to use the accounting distribution set up at the business unit level.
Add Distribution	This button appears if you select Percentage, Area or Amount for the distribute by value. Click this button to insert a new distribution row.
Delete Distribution	This button appears if you select Percentage, Area or Amount for the distribute by value. Select a row and click this button to delete it from this page.
Select	This checkbox appears if you select Percentage, Area or Amount for the distribute by value. This checkbox is used to delete the distribution rows. Users can select all the distribution rows that they want to delete and click the Delete Distribution button to delete them.
Percentage	This field appears if you select Percentagefor the distribute by value. Enter a percentage amount for this distribution line. Percentage amounts must equal 100% to be valid.
Area	This field appears if you select Areafor the distribute by value. Enter the area for this distribution line. All lines must add up to the total rentable area for the lease to be valid.
Amount	This field appears if you select Amountfor the distribute by value. Enter the amount for this distribution line. All lines must add up to the rent specified for the financial term.
Valid	Used to indicate a valid combination of ChartFields. When activating the lease, edit checking will be provided and the checkbox will be selected for each row representing a valid combination of ChartFields. A lease cannot be activated until every accounting distribution is marked as valid.

Payee	Enter the entity to whom the security deposit is paid. The system uses the landlord as the default value. This field appears only for payables leases.
Payor	Enter the entity responsible to pay the security deposit. The system uses the tenant as the default value. This field appears only for receivables leases.
Ship To	Enter the vendor ship to location. This location will be used for VAT and SUT calculations by PeopleSoft Payables Voucher Build application. Only applicable only for payables leases. This is not a required field and if this is left blank Voucher Build will populate the default Ship To Location for the Vendor.
Add Security Deposit	Click to add a new security deposit. To add a new security deposit to an active lease, you must first create an amendment.
Accounting Distribution	Click this link to override the accounting distributions set up at the business unit level.

Refund Date	Enter the date on which you want the system to process the refund. The system uses the current date by default, but you can change this value to any future date.
Payee	Displays the payee. If the amount to refund is positive, the payee is the entity to whom the system refunds the security deposit. If the amount to refund is negative, the payee is the entity who is responsible to pay the amount.
Add Interest	Click to insert an additional worksheet item for adding interest that was accrued for the security deposit. The system does not calculate interest for security deposits for a lease; therefore, you must track the interest manually. You can code interest to a different transaction routing code, which enables flexibility for a distinct general ledger account.
Add Deduction	Click to add deductions for damages to the property or any final charges to be paid by the tenant. You can code deductions to a different transaction routing code, which enables flexibility for a distinct general ledger account.