Tenant move-out: a complete workflow

When a tenant leaves, the move-out is where money, paperwork, and your books all have to line up at once: the lease ends, final charges land, and you owe the tenant back their security deposit minus any allowable deductions. Done in the right order, it takes a few minutes and leaves a clean record. Done out of order, it produces wrong balances, disputed deposit returns, and a unit that still shows occupied. This guide walks through a reliable move-out routine in TenantLedger and the judgment calls that go with it.

The golden rule of move-out: settle the balance before you return the deposit. Enter every final charge, apply the deposit to what’s owed, then refund only what’s left. Refunding first and charging later is how you end up chasing a tenant who has already moved on.

The move-out routine at a glance

Work top to bottom. Each step depends on the one before it.

#	Step	Why it matters
1	Record the move-out date / end the lease	Stops rent from accruing past the day they leave and gives every tenant a move-out date.
2	Do the move-out inspection and document it	Photos and notes are your evidence for any deposit deduction.
3	Enter all final charges and credits	Prorated rent, unpaid fees, damage charges, and any concessions — so the balance is complete.
4	Apply the deposit to outstanding charges	Uses the money you’re already holding to clear what’s owed first.
5	Refund the remaining deposit (full or partial)	Returns only what’s actually left after deductions.
6	Print the tenant statement	Gives the tenant a clear, defensible record of the settlement.
7	Update tenant and unit status	Keeps your active lists and vacancy reporting accurate.

The rest of this article expands each step.

1. Record the end date / end the lease

Start by telling TenantLedger the tenant is gone. The action you choose depends on who is leaving.

The whole household is leaving — use End Lease. Open the lease, go to the Action menu on the Lease Summary, and choose End Lease. This marks the lease Terminated and gives every tenant a move-out date. The End Lease screen also lists the recommended next steps (enter charges, apply deposits, refund deposits, print the statement) — that order is the same one in this guide.
One co-tenant is leaving but the lease continues — use Move Out Tenant (Action menu). You’ll set the move-out date and reassign rent responsibility to whoever remains. You can’t move out the only tenant on a lease; if everyone is going, end the lease instead.

Why date accuracy matters: the move-out date is your cutoff for rent and fees. Set it to the day the tenant actually surrenders the unit, not the day you happen to process the paperwork. If you’ve left recurring rent charges running, confirm no future rent has posted past the move-out date — delete or adjust any that did.

Best practice: end the lease (or move the tenant out) before you settle money. A terminated lease still lets you add final charges, apply the deposit, and refund — and doing it in this order keeps the tenant from being billed for periods after they left.

2. Do the move-out inspection

Inspect the unit and document its condition the same way you (should have) documented it at move-in. This is what justifies every dollar you keep from the deposit.

Walk the unit and record condition room by room. Capture photos and written notes with dates.
Compare against the move-in condition. Normal wear and tear is not chargeable; damage beyond normal wear is.
Attach the inspection notes and photos to the tenant’s or property’s record so the evidence lives alongside the financial settlement, not in a separate folder.

Why it matters: deposit disputes are won or lost on documentation. A dated photo and a line-item note turn “you’re keeping my deposit unfairly” into “here is the damage, here is the cost, here is what’s left.” Many jurisdictions also require you to provide an itemized list of deductions within a set number of days — your inspection record is what feeds that list.

3. Enter all final charges and credits

Before you touch the deposit, make sure the tenant’s balance reflects everything they actually owe (and everything you owe them).

Typical move-out charges:

Prorated final rent — if they leave mid-period, charge only the days they were responsible for.
Unpaid balances — any outstanding rent, late fees, or utility pass-throughs.
Damage / cleaning charges — beyond normal wear, backed by your inspection.

Add each as a one-time charge with the right Charge Type so it lands in the correct category on reports and on the statement. See Add a one-time charge to a tenant.

If you owe the tenant something — a goodwill concession or a correction — record it as a credit, not by editing a charge down. A credit preserves the audit trail. See Issue a credit to a tenant.

Best practice: enter charges and credits now, while the unit is fresh in your mind and the inspection is in front of you. Adding a forgotten damage charge after you’ve already refunded the full deposit means collecting from someone who no longer lives there.

4. Apply the deposit to what’s owed

Remember that the security deposit is a liability — money you’ve been holding on the tenant’s behalf, never income. At move-out you settle that liability by applying it against the tenant’s final balance first.

To use the deposit toward outstanding charges, record a payment against those charges drawing on the held deposit. See Receive a rent payment.

Two outcomes are possible after applying it:

Deposit covers the balance with money left over → you’ll refund the remainder (Step 5).
Charges exceed the deposit → there’s nothing to refund. The remaining balance stays owed by the tenant; you may need to pursue it separately.

Why apply, not just refund: applying the deposit to charges clears the tenant’s ledger and records the liability being used for its intended purpose. It keeps your deposit-held figures and the tenant’s balance correct, which matters at reconciliation and on owner statements.

5. Return the deposit — full or partial

Now refund only what’s left. Open the lease, choose Refund Payment from the Action menu, and record the money going back to the tenant.

Full return — no deductions: refund the entire deposit.
Partial return — deductions applied: refund the deposit minus what you applied to charges in Step 4.
Nothing to return — charges met or exceeded the deposit: skip the refund and make sure the statement shows why.

On the refund form, pick the correct Account — for a security-deposit refund, use the deposit / current-liability account so your books reflect the liability being paid down rather than an expense. The Total must equal the refund Amount or the form won’t save. See Issue a refund to a tenant.

Best practice: refund from your security-deposit bank account, not your operating account, if you keep deposits separate (many states require this). It keeps trust funds and operating funds from mixing and makes reconciliation cleaner.

6. Print the tenant statement

Generate and send the tenant a final statement showing the full picture: every charge, every payment, the deposit applied, and the refund. This is the tenant’s record and your defense if the settlement is ever questioned. See Run a tenant statement.

A good move-out statement answers, in one page: what did I owe, what was my deposit, what did you keep and why, and what am I getting back.

7. Update tenant and unit status

Finish by making your lists tell the truth.

Tenant status → Inactive. For a tenant who simply moved out, keep their record and history — just mark them inactive so they drop off your active lists. Do this by editing the tenant. You usually do not delete a former tenant; deleting is for records added by mistake, and it’s blocked while any leases, charges, credits, or payments exist. See Delete a tenant.
Unit → available. Make sure the unit shows as vacant so it appears in available-units views and you can begin marketing or move the next tenant in.

Best practice: keep moved-out tenants in the system as inactive, not deleted. Their history is part of the property’s record — useful for references, disputes, and year-end reporting — and deleting them throws away an audit trail you may need.

Distributing the result to the owner (manual)

Move-out costs and any retained deposit affect the property’s bottom line, which in turn affects what’s available to pay the owner. TenantLedger does not have an owner payout/distribution feature — paying an owner is something you do outside the app (write the check or send the transfer) and then record like any other payment. (Owner contributions — money the owner puts in — do have a dedicated screen.) When you settle a move-out near a distribution date, finish the deposit settlement first so the owner’s share reflects the real result.

Common mistakes to avoid

Don’t refund the deposit before final charges are entered. Once the money’s back with the tenant, unbilled damage is hard to recover. Charge first, refund the remainder.
Don’t treat the deposit as income. It’s a liability you hold in trust. Apply it to charges, refund the rest — never book it as revenue.
Don’t keep rent charges running past the move-out date. Confirm no recurring rent posts after they leave; delete or adjust any that did.
Don’t skip the inspection documentation. No photos and notes means no defensible deductions. Document before you keep a dollar.
Don’t edit a charge down instead of issuing a credit. Editing destroys the audit trail; a credit preserves it.
Don’t refund security deposits from your operating account if you hold deposits separately. Mixing trust and operating funds undermines reconciliation and may violate state rules.
Don’t delete a former tenant to “clean up.” Set them Inactive. Deleting is for mistakes and is blocked while history exists for good reason.
Don’t forget to free the unit. A unit left marked occupied won’t show up when you’re trying to re-rent it.