If the true owner of some piece of property leaves it in someone else’s possession long enough, eventually the property becomes abandoned. In Minnesota, Chapter 345 of the Minnesota statutes governs unclaimed and abandoned property. In general, holders of unclaimed and abandoned property must report it to the commissioner of commerce. The commissioner may then sell the property at an auction.
In general, Minnesota law prescribes a three-year dormancy period for most types of property. Unclaimed property typically refers to intangible property, such as uncashed checks, securities and bail bonds. If a property remains unclaimed or if there has been no “owner-generated activity,” the law presumes that the owner has given up the property. Certain exceptions apply. For example, money orders have a seven-year dormancy period and travelers checks have a 15-year dormancy period.
Under Minnesota law, holders of unclaimed property must file reports with the Minnesota Department of Commerce. The reports provide information about the unclaimed property, including the type of property it is and the presumed owner, if known. If the holder has records of the presumed owner’s last known address, and if the property is worth more than $100 and the claim is not barred by the statute of limitations, the holder must send a letter to the presumed owner within 120 days prior to filing the report. The letter must indicate that the holder has possession of the presumed owner’s property and must instruct the presumed owner about what to do next.
Title to Abandoned Property
If abandoned property is sold, title to that property passes free and clear to the purchaser. If the original owner discovers the property after the sale, he cannot make a claim against the property to regain title to it. In general, the Minnesota Department of Commerce must hold public auctions for most abandoned property. A public sale is not necessary for securities (such as stocks) and historic items. Historical items may eventually be sold, but the Minnesota Historical Society has the right to select items before the public sale.
Holders of unclaimed or abandoned property must read the provisions in Chapter 345 of the Minnesota statutes carefully as the relevant provisions treat specific types of property differently from others. For example, tangible personal property that does not fall into one of the provisions in the statute, section 345.75 applies. This section allows a person to become the owner of the property six months after it comes into his possession, provided he complies with the notice requirements. Because of the legal nature of claiming and reporting abandoned or unclaimed property, readers should seek independent legal advice before proceeding.