Leases and rent

What a lease holds#

A lease in EscBooks is what the books need of a tenancy: who pays, how much, and when. Add one with Add Lease under Leases on the property's page. Its fields:

• Tenant: one of your clients, or New tenant… to add them with a name (a person, a couple or a company), a contact for a company, and an email and phone if you like. A tenant is a client: their details are kept in one place, their page shows the lease, and Clients marks them Tenant. The Rental property preset calls clients Tenants.
• Unit: for a property with more than one, the one they rent, or The whole property.
• Starts and Ends: the lease's term. Leave Ends blank for month-to-month. A tenant who stays past the end is month-to-month, and rent is still due.
• Monthly rent, and Due on day: the day of each month it's due, from the 1st to the 28th.
• Grace days: how many days after the due day rent can arrive before it's late. 5 to start.
• Late fee: the flat fee the lease charges when rent is late, or nothing.
• Security deposit: what you ask for. Record it when it's paid (see Security deposits).
• First month: what's due on the first due date when it's prorated, as when a tenant moves in on the 20th. Blank means the full rent.

When a tenant leaves, set Moved out on the lease: no rent comes due after that day. Leases hold no documents: keep the signed lease where you keep it now.

Rent is income when it's paid#

Rent counts as income the day you receive it, never the day it's due, on cash and accrual basis alike. Rent a tenant hasn't paid isn't income, and isn't owed to you in the books. The Rent Roll shows what's due and late, without posting any of it.

Rent goes on Schedule E line 3, Rents received (line 2 of Form 8825 for an S corporation or partnership, line 6 of Form 1120 for a C corporation). A late fee the tenant paid is rent too. A security deposit isn't: it's held for the tenant.

Recording rent#

Rent can be recorded three ways, and each makes the same record:

• On Income, click Other Income and pick Rent as the Type. Pick the Property and the Tenant, then the amount, the date received and the account it went into.
• On the Rent Roll, click Record Rent on a tenant's row. It opens with the property, tenant and amount due filled in.
• When you review a bank statement, pick Rent… under Properties in What is this? for the deposit, then the property and tenant, and click Mark as Rent. A deposit that names a current tenant and is their rent offers Rent from them in one click. Rent you'd already recorded is offered as Already recorded:, to match the deposit to it rather than record it twice. See Reviewing statements.

Rent with no lease, like a parking space or a laundry machine, is rent on the property with No lease picked as the tenant.

Late fees#

1. Record the fee as rent from the same tenant, as above.
2. Tick This is a late fee.

A late fee is rent on Schedule E, but it pays no month's rent on the Rent Roll. Unmarked, it would be counted toward next month. EscBooks doesn't charge late fees for you: it records the ones a tenant paid.

The Rent Roll#

Rent Roll lists each lease's rent for the month you pick: what was due, what's been paid, and where it stands, with Record Rent on each row. At the top, the month's rent Due and Paid; at the bottom, any unit with no current lease, as Vacant.

• Paid: all of it.
• Due: not paid in full yet, but still within the grace days, or not due yet.
• Short: some of it was paid, and the grace days have passed.
• Late: none of it was paid, and the grace days have passed.

Everything a tenant has paid as rent on the lease goes to the oldest unpaid month first. A payment a week late still pays the month it was for, and a tenant who pays two months at once is up to date. Late fees are left out, and so is rent recorded with no lease.

Rent comes due each month on the lease's due day, from its start until the tenant moves out. The first due date is the first due day on or after the lease starts, for the First month amount when one is set.

Rent in your reports#

• On the property's page, Profit and loss counts rent and late fees under income.
• On Income and the dashboard, rent counts with everything else received.
• In the General Ledger, rent is credited to Rental income and debited to the account it went into. See Reports and taxes.
• On Reports → Taxes, it's line 3 of each property's Schedule E column.