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Failed Payouts and Deposit Reversals, What Do They Mean?
Failed Payouts and Deposit Reversals, What Do They Mean?

Payment and Payout Failures and what to do when that happens.

Danni avatar
Written by Danni
Updated today

With all ACH payments, there is some risk that your tenants payments can fail. The most common scenario results from insufficient funds, but it can also happen due to a stop payment or an error on the part of their bank.

Some of the most common reasons for a tenant's payment failure are:

  1. Insufficient funds

  2. Incorrect bank account

  3. The card information was entered incorrectly

  4. Payment method is not authorized for debit payments (this is if they entered a savings account vs a checking account)

  5. The renter had their bank account frozen

It is important to know that if a payment fails multiple times, the payment method will be blocked by our payment processor, if that is the case, the renter would need to connect a different payment method to remedy this.

What happens when a payment from your tenant fails -

For Premium landlords:

If you are subscribed to the Premium Plan, Stripe will start the deposit process to your account as soon as payment has been submitted (before the funds have cleared from the renter's account) so you will receive the payment within *2-4 business days. If a tenants payment fails, you will be notified via email. The email will include the tenants name, amount and date that the payment failed. You can learn more about reversals by clicking here.

It will take *5-7 business days for the reversal to fully process and clear. Future payouts may be disrupted during this time. Once the reversal is complete and a new payment is submitted you will see those funds in your account within *1-2 business days. We've included an example of what the notification looks like when it is sent to the renter as well as the landlord below.

The email notification sent to the renter:

The email notification that is sent to the renter for failed payment notice will include the bank account information with the last four digits, the amount of the charge that was tried and the option to Recharge Payment.

The email notification sent to the landlord:

The email notification that is sent to the landlord when a tenants' payment fails will include the tenant's name, the date the payment failed, the amount, and the option to view the payment details.

In addition to the email notification, you will also receive the status of the payment failure within the charge along with the date the payment failed:

For non-Premium landlords:

Payments will take 5-7 business days to be pulled from the renters account and deposited into the landlords bank account.

All payments are processed on business days excluding weekends and (bank-observed) holidays. If your renter pays late in the evening or on a Friday, their payment will be processed the following business day or Monday.

What is a failed payout?

A failed payout is a payment that you are expecting that we could not deposit to your account. This could happen for a few reasons, your bank account was closed and not updated within TurboTenant or your bank account information was entered incorrectly within TurboTenant.

If a payout fails, you will be notified via email:

You will also be able to see the failed payout in the payments section if your lease profile. To get there, you can select the 'leases' tab, select the name of the lease profile, and then select 'payments'. You will see 'Deposit Failed':

Once you get the notification that your payout failed, you can take action by re-adding or updating your errored bank account or you can contact our support team for more information.

Still have questions? Reach out to our Support Team via chat or by email at [email protected]

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