🔍 What’s a Security Deposit / Last Month’s Rent
A security deposit (and, in some provinces, last month’s rent) is collected at the start of a tenancy to cover unpaid rent or damages.
Rules vary by province — including maximum amounts, whether interest must be paid, and how funds must be held.
👉 See: Security Deposits and Last Month’s Rent Rules by Province in Canada
💰 Collecting Deposits
When collecting a deposit or last month’s rent:
Record the deposit amount on the lease.
This ensures it’s tracked correctly in Propra and tied to the tenant’s account.
→ Recording the collection of a security deposit
You can also add Other Refundable Deposits if allowed in your province.
Deposit the funds into the correct bank account:
Trust account if required by your province.
Operating account if you’re holding and paying out to the owner.
🏠 Who Holds the Funds
Option 1 — Owner Held
Choose Held by Owner when the owner received and holds the funds directly from the tenant.
Example: The tenant pays the owner directly.
Do not deposit the funds into your operating or trust account.
This selection ensures your records reflect that the PM never took custody.
If an invoice or payment entry was created automatically during lease setup:
You can delete the entry, or
Create a “fake bank account” in Propra, record the payment there, and deposit to that fake account. (this would be in your chart of accounts)
This keeps your reporting clean without impacting real bank balances.
Option 2 — Property Manager Held
If the PM collects the deposit or last month’s rent, record it as usual and deposit into your designated bank.
If the PM later pays out the funds to the owner:
Deposit the collected funds into the operating (or trust) account from the security deposit account.
Include the amount in the owner payout so it’s reflected in accounting and reporting.
💵 Tenant → Owner vs Tenant → PM → Owner
Scenario | What to do in Propra |
Tenant pays Owner directly | Select Held by Owner. Do not deposit funds. Delete or move any auto-created entries to a fake bank if needed. |
Tenant pays PM, then PM sends to Owner | Record collection, deposit to the correct bank, and include in the next owner payout. |
🔄 Editing or Adding Deposits
Add an additional deposit:
You can add another deposit if your lease or provincial rules allow it.
→ Can I add an additional security deposit?Edit a past or terminated lease:
Use the dedicated workflow to update the deposit record.
→ How to edit a security deposit on a past or terminated lease
🧾 Returning Deposits at Move-Out
When the tenancy ends:
Open the lease and select Issue Deposit or Return Deposit.
Enter:
Return amount
Any funds retained for damages or unpaid rent
Return date (for interest calculation)
Propra generates the accounting entries and a Security Deposit Statement PDF.
→ Returning security deposits
🗓 Handling Last Month’s Rent
When the tenant’s payment represents last month’s rent, you’ll still use the Issue Deposit workflow in Propra to process it correctly.
Here’s how:
Go to the tenant’s lease and select Issue Deposit.
The total amount of the last month’s rent will be shown as well as the calculated interest amount owed as per the recorded collection date.
Select the “Retained for Rent Collection” box and in the amount field, enter the same amount that will be applied toward the tenant’s final month of rent.
This records that the funds were not returned to the tenant but used to cover rent as agreed.
Propra automatically updates the accounting entries — moving the funds from the deposit or trust account to the rent income category.
This ensures your records clearly show that:
The tenant’s deposit was used for rent, not damages.
The owner’s payout and accounting balances remain accurate.
Once you have completed this step you can then go to your Receivables page and Post your Rent Invoice as paid.
*Autopay will post but not collect a Last Months Rent on a lease that is expiring (Ontario). Ie If the lease is set to end May 31 rent will be posted on April 30th but Autopay will not pull the funds from the tenants account.
🔄 If You Accidentally Issued a Deposit
If you’ve accidentally clicked Issue Deposit, don’t worry — you can undo it.
Once a deposit is issued, the Issue Deposit button will disappear, but you can restore it by following these steps:
Go to the Lease and open the Financial page.
Click Manage Deposits — this will take you to the main deposit page.
You’ll see that the Returned box is selected. Unselect that box.
Click Next to move to the next page.
Delete the interest accrued by clicking the trash can (🗑️) icon.
Click Update Refundable Deposits to save your changes.
Once this correction is complete:
7. Go to your Payables page and delete the bill that was created when the deposit was originally issued.
After these steps, the Issue Deposit button will reappear on the lease, and your deposit records will return to their previous state.
🗓️Editing a Security Deposit Collection Date
If you need to update the collection date of a security deposit, you can do this directly from the lease page.
To edit the deposit collection date:
Go to the Lease page for the tenant.
Select the Financial tab.
Click Manage Deposits.
The first page will show you if the deposit has been collected. On the second page, you can edit or add the collection date.
Select the pencil icon beside the collection date.
Choose the correct date from the calendar picker.
Click the floppy disc icon to save the new date.
Once saved, select Update Refundable Deposit to apply the change.
Your updated collection date will now appear in the lease’s financial details.