Have you ever done some work to a property that should really be the responsibility of the tenant? Maybe you spent money on a locksmith because a tenant lost their key. When you incur charges that you need to pass along to a tenant, it’s called a chargeback.
Keep reading to learn more about tenant chargebacks. We’ll give you some examples and show you how to make them easier using Yardi Breeze.
What’s a tenant chargeback?
When you spend money on a property but the cost is the responsibility of a tenant (and you need to get reimbursed), that is called a chargeback. Sometimes it may also be referred to as an expense recovery.
When should you create a chargeback?
You will create a chargeback whenever you spend your own or the owners’ money on something that is or should be the tenants’ responsibility. You should be upfront with tenants about chargebacks and expectations from the get-go – in your lease if possible to stay on the legal side of things. No one likes receiving a surprise bill from their landlord.
Here are some examples of chargebacks:
Broken window repair
Bulky trash pickup
Door or railing repair
For commercial properties, you can use chargebacks instead of – or in addition to – charging estimates for expenses and doing a reconciliation at the end of the year. Learn more about common area maintenance charges and reconciliations. In this instance, you should specifically outline which expenses are being passed onto tenants in your lease.
How do you complete a chargeback?
When you’re using manual processes or spreadsheets to manage your properties, tenant chargebacks can be tricky. Do you handwrite an invoice? Do you attach it to their rent? If you’re using property management software, it’s much easier.
Chargebacks in Yardi Breeze are refreshingly simple. First, you’ll open the payable invoice with the expense that is being charged back to tenants. Then click Charge Tenants to create and post a charge to their account.
You can distribute the expense among the tenants of a property or you can select one or more specific tenants. Tenants can see their chargeback charges in their secure tenant portal or on a tenant invoice that you print or email.
And there you have it, refreshingly simple tenant chargebacks, courtesy of Yardi Breeze!