Pete Neubig, co-owner of Empire Industries Property Management explains the Owner Payment Process.
Tenants typically pay on the first. Empire sends a charge five days prior to the first so the tenant can pay prior to the first. Now, it takes three to five business days for the payment to process. This is because of the Automatic Clearing House or the ACH and the bank limitations. This is not an Empire limitation. This does not include weekends or holidays, this is just business days. So, again this has to do with the automatic clearing house and then the bank, ok?
So, the best case scenario for Empire is that on the fifth of the month the money has cleared from the tenant. We make payments to the owner as soon as we get the money. And it takes three to five days for the check to clear.
So, let me give you an example. So let’s say the fifth is a Friday and the money has cleared from the tenant then the sixth and seventh might be a Saturday and Sunday, the eight is Monday, that’s day one. Unless we process the payment before noon that will be day one. Tuesday, Wednesday, Thursday and Friday is day five. Now let’s say Friday, the payment will most likely happen on Friday. But it could not happen on Friday, and you might get it on the fifteenth. Especially if there is a holiday here or a bank holiday within here as well.
It takes some time for a check to clear. It takes the same time for a check to clear so you don’t gain anything by sending a check. But the reason why we do the automated payment electronically is a couple reasons. One is the bank is very easy, it’s in and out of our account. But two, you don’t lose any mail, you don’t have to worry about the mail from us to get to you in case it may get lost. Third thing is, checks still take three to five days to clear once you receive them and put them into your bank.
So this is the reason why it seems like it takes longer for you to get your money, when in theory it’s just because the ACH and the banks are taking a little bit of time to get the money to clear.