Penalty Charges

A penalty is a one-off charge raised against a unit when the house rules have been broken — after the owner has been warned and the breach has continued. It is raised in the same way as any other service charge, so it lands on the owner’s statement and is paid and chased like the rest of what they owe.

What makes it a penalty is the account it is charged to. Giving penalties their own income code keeps them out of the service charge income in your reports, so the board can see at a glance how much has been levied for breaches and how much of it has been collected.

Setting up a penalty income code

This only needs doing once. Create a budget code of type Income for penalty charges, and give it a sort order that places it beside your other income codes. Once it exists, it is offered on every charge line alongside the service charge income codes.

Click [Budgeting / Budget Codes] on the main menu
Click on the new button
Choose Income as the type - only income codes can be charged to an owner
Enter a name for the income code
Enter a description of what the code is used for
Enter a sort order that places the code beside the other income codes in reports
Click save to create the income code

Raising a penalty

Start a new service charge against the unit. The form opens with a line for each schedule already filled in; choose the schedule the penalty is levied under, then change the account to the penalty income code and enter the amount.

The note on the charge is the one the owner reads on their statement, so that is where the reason for the penalty belongs. Be specific — the rule that was broken and that a warning was given beforehand — because a vague penalty is one an owner is likely to dispute.

Click [Receivables / Service Charge] on the main menu
Click on the new button to show options
Select [New Service Charge] from the new options menu
Choose the unit the penalty is raised against - it is addressed to the unit owner
Enter the charge date - this decides which accounting period it falls in
Choose the schedule the penalty is levied under
Choose the penalty income code, so penalties are reported apart from service charges
Enter the amount of the penalty
Describe the line - this shows on the charge itself, not on the statement
Explain the penalty to the owner - this appears on the charge and on their statement
Click save to raise the penalty charge
The total of the charge is the penalty amount

Penalty Charges

Setting up a penalty income code

Create an Income Code for Penalties [penalty-income-code]

That's it!

Raising a penalty

Charge a Penalty to an Owner [penalty-charge-create]

That's it!