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A co-owner paid too much: how the credit works

Inside one fiscal year an overpayment becomes a credit by itself: the unit's balance goes negative and absorbs the following months, with no extra entry to make. Two conditions though: the payment must be recorded as income attached to the unit, and a budget must exist. Carrying the credit into the next year is not automatic.

A co-owner pays $75 more than their contribution. Does that need a deferred-income entry? No — and the full answer comes in three parts, one of which people usually discover too late.

Inside the year, it is automatic

A unit's account is a running balance: month after month, CondoAide adds what was charged and subtracts what was paid.

When a payment exceeds the amount charged, the balance simply goes negative, and that negative carries into the next month, where it absorbs the contribution to come. That is the credit. There is nothing extra to record: the month concerned is marked "Credit", and the unit's balance shows it.

The two conditions

The payment must be recorded as income attached to the unit. It is the only entry needed, but it is indispensable: a receipt attached to no unit lands in nobody's account. It is operating-fund income, with the unit named.

A budget must exist for the year. Without one nothing is charged, so there is nothing for the payment to exceed — and the arrears page says so rather than showing zeros: "No fees calculated yet". That is the subject of the budget guide.

Carrying into the next year is not automatic

This is the part to remember, because it does not behave like the rest.

Month to month, the carry happens on its own. Year to year, it does not. No year-end close, no scheduled task, no automation turns a year-end credit balance into next year's prepayment.

You record it by hand, on the unit, as its opening credit (carried-forward prepayment) for the new year. CondoAide then applies it to the oldest months due, without touching the cash — the money, after all, came in and was accounted for last year.

Skip it and the co-owner restarts the year at zero, appearing to owe amounts they have already paid.

Two things the credit does not do

It does not put the unit in the arrears list. That list holds only units with an unpaid balance; a unit in credit counts among those up to date. There is no list of units in credit — the credit is read on the unit's own record.

It does not reduce the syndicate's arrears total. That total adds up unpaid balances only. One unit's credit never offsets another's debt, which is the only honest presentation: two different co-owners do not cancel each other out.

The neighbouring case: set-off against a supplier

Not to be confused. Where a co-owner is also a supplier to the syndicate and a set-off exceeds the contribution due, the excess is not credited to the unit: it goes to accounts payable. Set-off cannot go beyond what is owed (art. 1672 CCQ).

Frequently asked questions

Should an overpayment be recorded as deferred income?

No, there is no special entry to make. Record the payment received as income attached to the unit, like any other receipt. The gap against the amount charged becomes a credit on the unit's account by itself and absorbs the following months.

Does the credit carry into the next year automatically?

No. Within a year the month-to-month carry is automatic; from one year to the next it is not, and no task or year-end close does it. The treasurer records the amount as the unit's opening credit for the new year.

Does a unit in credit appear in the arrears list?

No. That list holds only units with an unpaid balance; a unit in credit is counted among the units that are up to date. There is no list of units in credit.

Does the arrears total account for credits?

No, deliberately. The total adds up unpaid balances only: one unit's credit never offsets another unit's debt.

Related guides

Do it now

Follow the steps above in your own syndicate.