by L. Ted Gayle
Director of Audits & Investigations
What do you as a real estate agent do when you have "unclaimed property" - a term used to describe the monies that are left in an escrow account for the account of a party or parties you cannot locate? Perhaps the situation occurred because tenants moved out and left no forwarding address for you to send their security deposit refund, or the recipient of a trust account check never cashed it. Maybe a potential buyer gave you an earnest money deposit on one of your listings and was never heard from again, leaving you or your real estate company with the money in the escrow account. Sometimes these funds are of unexplained origin, but they all constitute "unclaimed property," and must be properly disbursed.
You or your real estate company should never transfer these unclaimed deposits and uncashed trust checks from the escrow account to another business or personal account. This would constitute a violation of both the Real Estate License Law which prohibits paying trust monies to the wrong parties, and the North Carolina Escheat Laws, which impose substantial fines for violation. Because the rightful claimants are unavailable, these funds must be remitted to the State of North Carolina.
Although the general rule is that all "unclaimed property" must be remitted to the State no later than five years after the determination is made that the owner can't be located, remittance may be made earlier if the real estate company has made every possible attempt to locate the owner, including sending correspondence to the person's last known address.
The real estate company is relieved of any liability for having remitted unclaimed property to the State. If someone wishes to claim it, the claim must be made to the State, and rightful ownership must be established.
Escheat laws also apply to accounts other than escrow accounts. To learn more about your responsibilities regarding "unclaimed property" and the Escheat Law, including how to remit funds and where to obtain the proper forms, contact:
Department of State Treasurer Escheat and Unclaimed
Property Program
325 North Salisbury Street
Raleigh, North Carolina 27602 (919) 733-6876