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Bank/Check Drafting Services

Write the Rent Check to Yourself

Automatic drafting is an arrangement in which a party can issue an order to his bank to draft his checking or other account on a periodic basis to the order of another party.  From the landlordís point of view, this means that it is possible for the tenant to issue an order to his bank to pay his rent monthly out of a specific account maintained at that bank.  The bank will, on a periodic basis specified by the parties, issue a draft that is sent to the landlord, usually by mail, which he can then deposit with his own bank for collection, or, as is becoming increasingly common, electronically transmit the funds to the landlordís bank, which his bank will then deposit into an account specified by the tenant in his order to the drawee bank.  In the case of electronic transfers, a number of methods may be used as between the parties to notify each other of the transaction.  The landlord might notify the tenant by issuing a receipt, for example.  The landlord would be notified of the transfer by his own bank in a statement of account.

Automatic drafting streamlines payment and makes it more convenient.  It is not a form of securing payment, as the landlordís recourse in the event the funds are not in the tenantís account is against the tenant for non-payment of rent, and gives the landlord no more security than he would have under any other circumstance.  Companies that have a large number of accounts, each paying a small amount of money on a periodic basis, where the costs of individual invoicing, processing delayed payments, and tracking down stray payments would be a large proportion of the amount billed use this payment method the most often.  However, it is also a good device for eliminating delays that happen, as, for example, owing to inefficient mail delivery, or for goodwill, by making payment more convenient and giving the tenant confidence that his payment will not be lost or delayed in the mail.

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