Bulletin: NY000388

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, 2008.  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.

To view copies of Sections 1317 and 1422 of the Abandoned Property Law click here. 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 at

http://www.osc.state.ny.us/ouf/oufhandbook/money.htm

Also to view the suggested form letter for notice to depositors in compliance with the statute click here.

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).