The end of a tenancy is where landlords lose money and tenants feel cheated. Rent is owed up to the day they leave, the last month is only part of a month, the deposit has to be dealt with, and each item has to be explained. This guide gives a checklist for ending a lease cleanly, and for the rarer case of reversing a lease that was entered in error.
The rules for notice and for deposits come from your tenancy agreement and the law. This guide covers the accounting steps.
The move-out checklist
- Fix the move-out date
Agree the exact date the tenant leaves and hands over the keys. Everything is calculated to this date.
- Inspect the apartment
Walk through with the tenant if possible. Note damage beyond normal wear, missing items, and the readings of utility meters. Take photographs, and have the tenant sign the inspection.
- Bill the final part month
Rent is charged by the day up to the move-out date.
Example: rent Rs 45,000, a 30-day month, the tenant leaves on the 12th.
| Item | Amount (Rs) |
|---|---|
| Daily rate (45,000 ÷ 30) | 1,500 |
| Days occupied (1st to 12th) | 12 |
| Final rent | 18,000 |
- Add final utilities and charges
Collect the final utility bills, and add any other recurring charges up to the move-out date.
- Add up what the tenant owes
| Item | Amount (Rs) |
|---|---|
| Unpaid rent from earlier months | 10,000 |
| Final part-month rent | 18,000 |
| Final utilities | 4,200 |
| Total owed | 32,200 |
- Compare with the deposit
The deposit held is Rs 90,000. The agreed deductions for damage are Rs 7,000.
| Item | Amount (Rs) |
|---|---|
| Deposit actually received | 90,000 |
| Less: amount owed by tenant | (32,200) |
| Less: damage deductions | (7,000) |
| Refund to tenant | 50,800 |
Check: 90,000 − 32,200 − 7,000 = 50,800.
- Pay and record
Pay the refund by bank transfer, record the reference, and obtain the tenant's signature on the settlement. Keep one copy for each side.
- End the lease and free the apartment
Mark the lease as ended on the move-out date and make the apartment available again. This stops further invoices.
Discounts at settlement
If you agree to waive part of what is owed, for example a goodwill reduction, record it as a discount with a reason. The settlement should show it, so that the owner can see why the figure differs from the sum of invoices.
Reversing a lease created in error
Sometimes a lease is entered wrongly: the wrong start date, the wrong tenant, or an apartment that was never let. The correct fix is not to delete anything. Delete leaves no trace, and an auditor will not accept it.
Instead:
Reverse the invoices with equal and opposite entries. Reverse the deposit entry, if it was recorded. End the lease on its own start date, so it never counts as having been in force. Keep a record of who did it, when and why.
Do not reverse anything that already has a payment against it; settle it through a proper process instead.
Common mistakes Billing a full last month. The tenant pays for days they were not there. Refunding without an itemised statement. Forgetting final utilities. They appear after the refund is paid. Deleting a wrong lease. The audit trail disappears. Leaving the lease open. Invoices keep being created. How OneAccounts Property Management does it
OneAccounts has a lease settlement function. It works out unpaid balances, the final part-month rent by the day, the deposit actually paid, your itemised deductions (each posted to its own account), an optional discount, and the net refund or shortfall. A settlement PDF is produced. An owner or admin can reverse the invoices of a lease, or a whole lease, without deleting anything; every reversal is recorded in the audit log, and a lease with payments against it cannot be reversed this way. See OneAccounts Property Management and security deposit accounting.
Frequently asked questions Can the landlord keep the whole deposit?
Only as far as the agreement and the law allow. Itemise every deduction.
How is the last month's rent calculated?
By the day, up to the move-out date.
What if the tenant leaves without notice?
Follow your agreement, document the date you took possession, and settle from that date.
What if the deductions are more than the deposit?
Record the shortfall as owed by the tenant and follow up.
Should I delete a lease that was created by mistake?
No. Reverse it so the history is preserved.