b'Be Aware of Unclaimed Property RulesUnclaimed property laws can be confusing and can create trapscustomer overpayments become unclaimed property after aA failure to report results in a misdemeanor. A willful refusal toIf a third-party administers any consumer rebates for the uninformed. Under Minnesotas unclaimed property law, athree-year period. pay or deliver unclaimed property results in a gross misdemeanor.(e.g., fulfillment houses), review contracts and records to business that fails to timely report and remit unclaimed propertyAdditional penalties and 12% interest may also be imposed. determine which entity is responsible to report and remit may be hit with severe penalties and interest. Consequently,Determining the holder unclaimed property to the state. businesses need to understand and comply with unclaimedDetermining the holder can be confusing. Often, the holderHere are some tips for holders: property laws. is not the party with custody of the property. For example,Implement procedures to monitor the dormancy periodIf under audit, seek the advice of a professional many businesses outsource rebate programs to third parties,of property held. Be aware that different dormancyknowledgeable in the area of unclaimed property. A Unclaimed property generally refers to abandoned intangiblecalled fulfillment houses. Typically, these fulfillment houses areperiods exist for different types of property.knowledgeable professional will identify any applicable property. Common examples include dormant bank accounts,defenses that may help the holder avoid or reduce unclaimed wages, unpaid accounts payable, un-refundedresponsible for administering the rebate program on behalf of theReview record retention policies. Under Minnesota law,liability. The professional may also be able to achieve a overcharges, and deposits for the repair or purchase of goods orbusiness. The fulfillment house collects and processes the rebatethe statute of limitations is generally ten years after thefavorable result through negotiation.services. Under Minnesota law, however, unclaimed property doesclaim and subsequently remits a rebate check to the consumer. If the consumer fails to cash the rebate check, the unused rebatefiling of a report. Retain applicable documents, includingThis article addresses Minnesotas unclaimed property law. not include gift certificates, gift cards, or layaway accounts issuedbecomes unclaimed property after the dormancy period expires.copies of all filed reports and remittances, before theThe laws of other states may differ. If you have any questions or maintained by a business selling tangible property or servicesexpiration of the statute of limitations. If a holder at retail.Unfortunately, businesses may think they are not the holder inregarding how to handle unclaimed property, please reach out to these situations. Despite outsourcing the rebate program, theis unable to produce records, auditors may attempt toyour Moss & Barnett attorney.Common businesses that typically have unclaimedbusiness may be responsible for remitting the unclaimed rebatesestimate past-due liability for years without records. The property include: to the state. The business will want to understand the applicableauditors use of estimation may create draconian results. law to identify if it has any exposure in these situations.Consider filing past reports to start running the statute ofNathan Thompson is a member of our Business Law group Retailers and WealthPreservationandEstatePlanninggroup.He limitations. A failure to file a report allows thefocuses his practice on tax law and navigates clients through Manufacturers Due diligence and filing requirements Department of Commerce to audit and impose penalties the complexity of the tax rules.Holders must conduct due diligence in finding the rightful ownerand interest for an indefinite period. The statute of612-877-5302|Nathan.Thompson@lawmoss.comBrokers of property. Under Minnesota law, a holder must send writtenLawMoss.com/people-nathan-j-thompsonlimitations does not begin until a report is filed. Real estate agents notice to the presumed owner within 120 days before filing a report if:Hospitals "Covid in Construction" Continued from Page 5The holders records contain an address for the presumed Clinics owner that the records do not disclose as inaccurate; general contractor bears the risk of future price spikes in labor andcontract provisions after a problem arises on a problem is often Oil and gas companies The statute of limitations does not bar the presumedmaterials. The general contractor can mitigate that risk by havingeven more difficult. Owners, contractors, and subcontractors Financial institutions owner from bringing a claim; and fixed price contracts with its subcontractors and suppliers. Thatshould consult with a knowledgeable construction attorney early transfers the risk of price escalation further down the contractualto position themselves as best they can in these turbulent times.Insurance companies The property has a value of $100 or more. chain. But if the general contractor has variable or market-price contracts with its subcontractors and suppliers, then the generalJeffrey A. Wieland practices in our Construction Law and Litigation groups. He has a B.S. in Engineering Physics and The party responsible to report and forward unclaimed property toHolders with unclaimed property must report and forward,contractor is stuck. The general contractor has to pay more thana Masters degree in Mechanical Engineering. He spent 15 the state is known as the holder. Reporting requirements ariseregardless of amount, unclaimed property to the Minnesotaplanned to get the materials it needs, but it cannot pass that costyears working as an engineer and project manager before becoming a lawyer. He is licensed in the state and federal when the holder has held certain property for a specified periodDepartment of Commerce. For property that becomes unclaimedon to the owner. courts in Minnesota and North Dakota where he typically of time, called the dormancy period. Different dormancy periodsproperty on June 30, most holders must report by November 1represents contractors, subcontractors, suppliers, and owners.exist for different types of property. For example, uncashed wageof that same year, while life insurance companies must report byCoordinating multiple contract provisions across many contracts612-877-5261|Jeff.Wieland@lawmoss.comchecks become unclaimed property after a one-year period, andOctober 1. during contract negotiations is hard. Navigating conflictingLawMoss.com/people-jeffrey-a-wieland6 7'