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Legal IssuesOld hand money – What to do!
First, try to locate the buyers and sellers, send them written notification explaining that you are holding the deposits and ask them to contact you immediately regarding these funds. On the rare occasion, you may get lucky and the parties will agree on disbursement of the deposit money. If that is the case, send a letter reiterating the instructions you’ve received on disbursement and ask them to sign and return a copy of your letter (be sure to include a copy and a self-addressed, stamped envelope to make return easier). Although we like to have a release signed by both parties, the rules and regulations governing escrow deposits do not require a release. What is required is certainty that there is a termination of the transaction that does not involve a dispute. Any writing which you can obtain from the parties indicating they are in accord with the distribution of the deposit will suffice. Be sure to discuss any alternative to a release with your broker first.
What if you cannot locate the parties or if they do not respond to your letters? According to the Pennsylvania Department of Revenue, money held for five (5) years or more is considered abandoned and unclaimed. This law permits you to turn the deposits over to the Bureau of Unclaimed Property at the Pennsylvania Department of Treasury. Does this conflict with the Rules and Regulations?
Remember, to always document your files well and retain written evidence of what steps you took to locate and notify the parties. Always send written notifications to parties and document in writing to your files any verbal communications you may have. It is very important to do your due diligence to locate and notify the parties. Assuming you have done your due diligence and enough time has elapsed, there should be no problem turning these funds over to Unclaimed Property.
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Elizabeth Feather, Esq. is an attorney with Caldwell & Kearns and serves as general counsel to PAR. A substantial portion of her practice is dedicated to providing advice and counsel to real estate licensees and representing and defending real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth. She routinely counsels employers on employee relations issues as one of the voices of the PAR Legal Hotline. |
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