By Lorie Garland
Assistant Vice President, OAR Legal Services
A real estate brokerage is subject to Ohio’s unclaimed funds regulations. Recently the Division of Unclaimed Funds (Division) has been auditing brokerages to ensure compliance with these regulations. The regulations include a requirement to file an annual report with the Division. The purpose of the report is to notify and remit to the Division any monies the brokerage is holding that are considered “unclaimed.” This could include earnest money deposits or tenant security deposits in a brokerage trust account or uncashed payroll check funds in the brokerage operating account. A brokerage must file an annual report even if there are no unclaimed funds to pay into the Division. The annual report is due Nov.1.
Funds are considered dormant and therefore “unclaimed funds” when the brokerage has had no correspondence with the owner of the funds for the dormancy period. The dormancy period varies with the type of funds being held. Below is a list of funds brokerages might be holding and their corresponding dormancy periods.
Description of Funds |
Dormancy Period |
| Commissions | 1 |
| Wages – Payroll or Salary | 1 |
| Real Estate Escrow Funds | 2 |
| Deposits for Rent, Leases or Unused Services | 1 |
| Security Deposits | 1 |
| Expense Reimbursement Checks | 3 |
Funds being held by the brokerage for the dormancy period become “unclaimed funds” and can be turned over to the Division if certain requirements are met. If the funds being held are $50 or more, the broker is required to give the owner(s) of the funds a “due diligence notice” (Form OUF-8 Notice of Unclaimed Funds). If the funds are less than $1,000, the notice can be sent by first class mail. If the funds are $1,000 or more, the notice must be sent by certified mail, return receipt requested. The notice must include a self-addressed, stamped, return envelope. No notice is required for funds under $50, however, these funds are still reportable as unclaimed funds.
Form OUF-8 provides notice to the owner(s) of the funds that he has 30 days to show an interest in the funds by responding to the broker or the funds will be transferred to the Division. If no response to the notice is received or if the notice is returned for a bad address, the broker can remit the funds to the Division. If the owner(s) responds to the notice the funds are not reportable to the Division.
The unclaimed funds law requires all brokerages to file an annual report with the Division (Form OUF-1 Unclaimed Funds Reporting Form). The annual report is due November 1 of each year even if there are no unclaimed funds to report. If a brokerage is not holding any unclaimed funds or if all owners respond to the OUF-8 Notice, the brokerage must file a Negative (None) Report using the OUF-1 Reporting Form. The annual report due Nov. 1, 2011 is for funds dormant as of June 30, 2011.
Additional information regarding the unclaimed funds regulations, reporting requirements and reporting forms can be obtained from the Division of Unclaimed Funds website at www.com.ohio.gov/unfd. The Unclaimed Funds Guide for Real Estate Brokers provides specific guidance for brokers.
http://www.com.ohio.gov/unfd/docs/UCFGuideForREBrokers.pdf