Delaware Unclaimed Property Notice Letter – Which Did You Receive?

Delaware has been busy filling the mailboxes of companies recently.  If you are a recipient of a letter from Delaware, pay particular attention to the letter content as there are a two types of letters which require differing actions to be taken in response.

1. Delaware Informational Letter. This letter references the recent statute updates made by Delaware and the impacts this will have on future holder reporting.
2. Notice to enter the Delaware VDA program

Below is information regarding the two letters, actions for you to consider and examples of the content.

Delaware Informational Letter

The Delaware informational letter was sent to all holders that are regular reporters of unclaimed property to the state.  The letter updates holders of the changes that have occurred as a result of Senate Bill 13 signed on February 2, 2017 and the later Senate Substitute 1 for Senate Bill 79, which amended and clarified Senate Bill 13.  For complete information regarding these Senate bills, please see blogs Delaware Governor Signs Legislation to Overhaul their Unclaimed Property Laws and Delaware Governor Signs Legislation Delaying Estimation Regulations.

This is an excerpt which will help in identifying the informational letter:

I am the Assistant Director for the Delaware Department of Finance’s Office of Unclaimed Property, and my responsibilities include supervising and managing annual filings of abandoned and unclaimed property. This letter is to highlight some of the statutory changes enacted by the 149th General Assembly that my affect the unclaimed property reporting obligations of your business.

You may be aware that on February 2, 2017, Governor Carney signed into law Senate Bill 13, which revised and reorganized the State of Delaware’s Abandoned and Unclaimed Property Law, found in Chapter 11 of Title 12 of the Delaware Code (the “Law”). Further, on June 29, 2017, the Governor signed into law Senate Substitute 1 for Senate Bill 79, which amended and clarified Senate Bill 13.

There are several key items to be aware of in the letter regarding new requirements being imposed by Delaware, which are important to note as you prepare to report Delaware properties in 2018.

• The reporting deadline continues to be March 1
• Holders must send notices to owners of unclaimed property by first class mail not more than 120 days nor less than 60 days before filing the report if the following apply:
  • The holder has a sufficient address for delivery of first-class mail
  • The value of the property is $50 or more, unless the property is a security, which requires the holder to send a notice regardless of the property amount
• Holders must retain records for ten years after the report is filed
• All holders must file reports electronically in a web-based format

Notice to Enter the Delaware VDA Letter 

Pursuant to 12 Del. C. § 1172(a), the State of Delaware cannot initiate a new abandoned or unclaimed property examination unless the company has first been notified in writing by the Secretary of State that it may enter into the DE VDA program.  The VDA program allows a company to come into compliance by utilizing the DE VDA guidelines to conduct a self-audit of their books and records.

This is an excerpt which will help in identifying the DE VDA letter:

Please be advised that Company Name and its subsidiaries and related entities have been identified as likely being out of compliance with Delaware law as it relates to reporting dormant, abandoned, or unclaimed property. Under the laws of all 50 states, companies holding dormant, abandoned, or unclaimed property have an annual reporting responsibility to remit such property to the appropriate state. The Delaware Secretary of State established the Abandoned or Unclaimed Property Voluntary Disclosure Agreement Program (“SOS VDA program”) in 2012 to address this. Since that time, more than 850 companies have enrolled in this business friendly process whereby companies may “catch up” on past-due abandoned or unclaimed property obligations, avoid the time and expense of an audit, and may significantly reduce liability.

I would like to invite Company Name to participate in the Delaware Secretary of State’s SOS VDA Program.

It is important to note that those companies that do not enroll in the program will be referred to the State Escheator for examination.  Once the audit notice is issued, the Department of State will have no legal ability to accept a Holder into their VDA Program. Holders that receive a notice letter will have 60 days from the mailing of the notice to enroll in the VDA program.  Consequently, if you have received a Delaware notice letter, time is of the essence.

What if I need help understanding the letter?

If you are uncertain of the letter you have received from Delaware or any other reporting jurisdiction, engage with an unclaimed property professional such as MarketSphere.  A professional advisor has the expertise and knowledge to help holders understand the purpose of the letter and recommend actions that need to be taken.

Did you find this article informative? Subscribe to Email Updates to conveniently have new blogs regarding a variety of unclaimed property compliance topics arrive in your inbox.