Thursday, November 18, 2010

Spike TV's Auction Hunters: Unclaimed Property Comes to Realty TV

We have reality TV shows relating to (the New York) residents of the Jersey ShoreLeonardo Da Vinci, and famous (if underachieving) wide receivers, so why not one relating to unclaimed property?  Spike TV's new show Auction Hunters follows two "prospectors" who bid on abandoned storage units in an attempt to sell the contents for more than was bid.  Escheatable was unfamiliar with the process for auctioning storage units, but according to Spike's website:

 You and the other bidders will then line up in front of the first of what is likely several units up for auction.  Next, the auctioneer will throw open the unit's door.  Each bidder will briefly file past the open unit, leaving you only a matter of seconds to look and only look into the unit.  No touching allowed!  Once those precious seconds are over, you're done and that's why these short moments are so important.  You need to make a lightning fast assessment as to what the contents might be, and how much are you willing to bid.  Once everyone has had their look, bidding begins.  It can start as low as $1 or go as high as several thousand.  After being declared the winner, you will typically have up to 24 hours to clean out the unit or be forced to pay a financial penalty.

The obvious question (at least to us) is, isn't this unclaimed property?  Generally, yes and no, depending upon the storage unit contract.  In most instances, the storage unit contract or some states' laws specifically provide that the storage company can auction off the contents in order to be reimbursed for unpaid fees.  If the amount received, however, is greater than the amount due, the excess may be unclaimed property subject to reporting and delivery (at least according to some states and state laws).

5 comments:

  1. Many states have provisions prohibiting "private escheat". It seems to me that the example with the storage unit should qualify as private escheat, even if less money is recovered than owed, or even if no money is recovered, and the items are just kept (provided that there isn't a contract or specific state law allowing it).

    All in theory, of course

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  2. To the extent that, per the contract, items are auctioned off to pay past due fees, it would not likely be a private escheat because the contract is not purporting to transfer ownership of the physical items to the storage company (which would be a private escheat). Rather, the company is being allowed to liquidate (someone else's) property in order to recover the money to which it's entitled.

    In other words, in a true "private escheat" situation, the contract would provide that if the items went unclaimed for some period of time, they would thereafter become the property of the storage company. Thereafter, even if the rightful owner comes back, the storage company would claim that it now owned the property. That would be barred by the private escheat. (Again, in theory. As you noted, it depends very much on the contract and the laws of the state in question).

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