Are You Aware of the Uniform Disposition of Unclaimed Property Act?

Chapter 11.1 §§ 55-210.1 to 55-210.30 of the Code of Virginia (the Act) deals with defining what constitutes unclaimed property, how long a business organization must maintain the property, what to do with the property once it is determined to be abandoned and what happens if the property is not reported to the Commonwealth in a timely manner. Virtually every business organization from non-profits to Fortune 500 corporations to governmental agencies have some form of unclaimed property in their possession.

What Is Unclaimed Property?
All tangible or intangible property for which there has been no owner generated account activity for an extended period of time (a dormancy period). This means the owner must have contacted you regarding the status of the account or made a deposit or presented a demand for the property. If no such activity occurs, the property is presumed abandoned.

To see a list of potential types of unclaimed property which may be on your books, click here.
To see a list of potential unclaimed property listed by the type of industry involved, click here.

Why does Virginia have such a law? The purpose of Virginia’s law is three-fold:

1. To protect the property rights of the absentee owner and to reunite the owner with the property;
2. To provide that the use of any funds which arise from unclaimed property will go to the benefit of the general public rather than a chance possessor; and
3. To provide the holder relief from any liability and the responsibility of record keeping for the account.

Why do I have to report unclaimed property to the State Treasurer?
First and foremost, because it is the law. This consumer protection act has been in effect since 1961. Until recently, Virginia has relied on voluntary compliance, but that time is coming to an end soon. Second, because the property doesn't belong to you; it belongs to the owner. When you created the obligation, you took on the responsibility of holding the property for this individual or business until the transaction was complete. The Division of Unclaimed Property is simply stepping into the owner’s shoes until they can be located and the property returned to them.

 

1. Do you file reports with the State Treasurer annually?
2. Do you have property to report every year?
3. Do you reconcile your bank accounts?
4. What do you do about outstanding payables?
5. What do you do about accounts receivable credit balances, overpayments, unidentified remittances?
6. Do you ever take outstanding items into income? After what period of time?
7. What efforts are made to locate customers/stockholders/employees/etc. who do not cash checks/claim dividends/etc. or who have mail returned?
8. Is the abandoned property function assigned to an individual or a department?
9. Is a third party (a contractor) reporting on your behalf or returning itemized lists of property for you to report?
10. Do you realize that your company may have to report to multiple states?
11. Do you have documented procedures in place to explain which accounts/records need to be reviewed for possible reporting?
12. Do you have documented procedures in place on how to perform due diligence?
13. Do you have documented procedures in place on how to report and remit property to the appropriate state agency responsible for administration of this statute?

1. Determine your liability by identifying the properties that meet the definition of being abandoned.
2. Perform due diligence by attempting to contact the property owner by first class mail for all properties with a value of $100 or greater.
3. Complete the AP-1 form, certifying your report, and the AP-2 form detailing the records for the properties you must report and remit the property to the Department of the Treasury, Division of Unclaimed Property.

After That.....
Maintain records of your compliance for 10 years in case of audit.

 

Report and remit property to the state of the owner’s last known address. If there is no last known address for the owner, remit to the state of the holder’s corporate domicile.

 

Mail your report and remittance for property due to Virginia to:

 

For information on our Voluntary Compliance Program, click the corresponding links:

• To obtain a voluntary compliance application form, click here.
• To see the Terms and Conditions of the Program, click here.
• To see the reporting guidelines of the program, click here.
• To obtain a Virginia Release Agreement regarding participation in this voluntary compliance program, click here.

Please use this AP-1 form when reporting and remitting property covered by this voluntary compliance agreement.

If you have further questions, send an email to:

• Melinda Barbish, Audit & Compliance Manager
• Bill Dadmun, Policy Analyst,  Report & Remit Manager
• Vicki Bridgeman, Director
• Karen Conrad, Accounting Manager

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