When a tenant tells their landlord, PMC or HOA, that the ‘check is in the mail,’ its usual destination is a lockbox. They’re located all over the US to reduce what’s called, mail float. That’s the time it takes for checks to move from the sender to the payee through the mail system.
Mail float can be a way to game the system – a payer can use that time if they don’t have enough funds to cover the cost of the check. And that means, monies owed to you take longer to get into your account. And lockboxes are supposed to eliminate the need for a payments processor in your office but things don't always go as planned ... <sigh>.
Here are a few of the other problems associated with lockboxes:
When the bank receives a check without a “payment coupon” they don’t know how to handle that check. So, they place the check back in an envelope and send it to the PMC/HOA’s (or most likely the Accounts Receivable Manager) so they can research who it belongs Banks charge their clients a fee to use the lockbox service.
When a check comes in without a coupon, they charge their client a fee.
Banks charge their clients to print and mail coupons.
Most banks give the HOA/PMC a limited number of free deposits. After a few hundred free deposits, the bank starts charging the HOA/PMC. Most people don’t know that because the fees are buried in the treasury statement which most people don’t review carefully.