Contracts to Recover Unclaimed Property

Fee agreements with third parties for the recovery of property held by the Tennessee Division of Unclaimed Property are not uncommon. Such arrangements are now governed by statute:

An agreement by an apparent owner and a person, the primary purpose of which is to locate, deliver, recover, or assist in the location, delivery, or recovery of property held by the treasurer, is enforceable only if the agreement:

(1) Is in a record that clearly sets forth the nature of the property and the services to be provided;

(2) Is signed by or on behalf of the apparent owner;

(3) States the amount or value of the property reasonably estimated or expected to be recovered, computed both before and after a fee or other compensation to be paid to the other person has been deducted;

(4) Does not provide for compensation of more than ten percent (10%) of the value of the recoverable property or fifty dollars ($50.00), whichever is greater; and

(5) Contains such other information as the state treasurer may, by rule, require.

However, such agreements are void and unenforceable if  entered into within two (2) years from the date on which the property was paid or delivered by the holder to the Tennessee Treasury Department.

Source: T.C.A. § 66-29-176

Posted by Joel D. Roettger, JD, LLM, EPLS

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