Virtual Underwriter

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Bulletin: NY000268

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Bulletin: NY000268

Bulletin Document
V 2
Date: November 11, 2005
To: All Issuing Offices in New York
RE: Escrow Deposit Review - Compliance With Sections 1317 and 1422 of the Abandoned Property Law

Pursuant to Section 1317 of the Abandoned Property Law, escrow deposits collected by title companies, their agents or representatives as an inducement to issue a title policy, which become 3 or more years old (measured from date of deposit) as of December 31 of any year, must be turned over to the State Comptroller as abandoned property unless there has been written communication from the depositor or other person claiming the deposit within the 3 year period.

This is a reminder that if your office has not already done so, a review should be conducted to identify those escrows that will become 3 years old as of December 31, 2005.  If you have escrows that fall into this category, the following procedure is to be followed, pursuant to Section 1422 of the Abandoned Property Law.

At least ninety days prior to the applicable reporting date[1], you must send a written notice by first class mail, to each person appearing to be the owner of the deposit, at the address of the owner as it appears on your books and records. This requirement shall not apply where you do not have an address for the owner or you can demonstrate the only address you have pertaining to the owner is not the current address.

To the extent that the ninety day notice is required, you must, with respect to deposits in excess of $1000.00, send a second written notice by certified mail, return receipt requested, unless you have, in response to the ninety day notice, received a claim from the owner of the property or, the original mailing was returned to you as undeliverable.

The written notice required under Section 1422 shall advise the owner that deposit will be remitted to the state comptroller unless the deposit is claimed by the owner prior to the required remittance date[2]. 

In addition, pursuant to Section 1422, the cost of necessary certified mailing may be deducted from the deposit as a service charge.

Copies of Sections 1317 and 1422 of the Abandoned Property Law are attached to this Bulletin for your reference. It is strongly suggested that you review both statutes in their entirety. Further information, including forms for reporting to the Comptroller's office, is available athttp://www.osc.state.ny.us/ouf/oufhandbook/money.htm.

Also attached to this Bulletin is a suggested form letter for notice to depositors in compliance with the statute.

Should you have any questions regarding the questions of escrows or the Abandoned Property Law, please contact Company Counsel.


[1] The applicable reporting date, pursuant to Section 1317 (2) is “…within the first ten days of March in each year…” for “Any such property deemed abandoned as of the preceding December thirty-first…”.

[2] The required remittance date appears to be same as the applicable reporting date pursuant to Section 1317(2).

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

If you would like a copy of the statutes referenced in this Bulletin, please call STIC Legal Services at 800.433.0014.

Under the terms of the Deposit Agreement dated_________________(the "Agreement") a copy of which is attached hereto, you, as the depositor, agreed to provide satisfactory disposition of the items referenced in the Agreement by the performance date stated therein. As of this date, according to our records, that obligation has not been met.

It is our obligation to inform you that Section 1317 of the Abandoned Property Law of New York states that deposits such as this, held by a title insurer, or an agent of an insurer, are deemed abandoned property if unclaimed as of December 31st in any year for three years after the date of deposit, unless there has been written communication from the depositor or other person entitled to the deposit within said three year period. In the absence of written communication it is our obligation to report the deposit as abandoned property and remit same to the Comptroller of the state ofNew York .

Therefore, if you claim ownership of this deposit and do not want it reported as abandoned and remitted to the Comptroller, you must sign the enclosed copy of this letter and send it to the undersigned, on or before March 10, _________. Alternatively, you may send a separate written statement identifying the deposit and stating your claim thereto, by the aforementioned date.

Please be advised that we will not release funds to the depositor or any claimant in the absence of compliance with the terms of the Agreement and nothing herein is to be construed as a waiver of any of our rights under the Agreement or otherwise. Further, the Abandoned Property Law allows us to deduct the cost of certified mail incurred in this notification.

Sincerely,

_________________________________

I claim the funds deposited pursuant to the above referenced agreement.

___________________________________

References