Happy New Year!
I just wanted to speak in more detail on the challenges of outstanding checks. I understand that this can indeed be a thorn in anyone's side.
As you may know, all states have escheating policies, which dictate the time period required for holding funds before they are escheated to the appropriate Department of Revenue. This timeframe can range from 3 to 5 years. However, the question remains: what should you do prior to that time?
I recommend appointing someone in your office to monitor stale-dated checks regularly. Here are a few strategies to help minimize outstanding checks:
1. **Timely Resolution:** Ensure that any lienable items, such as homeowner's insurance checks, payoffs, and tax commissioner payments, are addressed within the necessary timeframe for each payee.
2. **Communication:** Once a check has been outstanding for 90 days, send a letter to the payee requesting that the check be cashed. In the case of a lost check, instruct them to contact your office for a replacement.
3. **Void Check Management:** If you need to void a check, be sure to check with your bank about the expiration date for voided checks, as some banks may have a 6-month expiration policy. If an expiration date exists, be proactive in renewing the voided check to prevent it from being cashed later, which could incur costs.
4. **Closing Inactive Accounts:** If you're looking to close out an inactive account with a few outstanding checks (12 or fewer) that remain uncashed, some states allow the issuance of cashier's checks to the payees, enabling you to close the account properly. It's advisable to consult with your local State Bar if it's an attorney state or connect with your title insurance representative for guidance, as they audit your IOLTA/Escrow Accounts.
If you require additional assistance with escheatment processes, my company, Positively Balanced, is here to help. We can provide guidance and support to ensure compliance with your state's regulations as we have been in business for 25 years where we assist with daily reconciliation, positive pay, 1099-S reporting, bookkeeping, audit assistance as well as keeping your accounts compliant and giving you peace of mind.
Please feel free to reach out if you have any further questions or need assistance.
Wishing you great success in 2025!
Mary Anne Harris
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Mary Anne Harris
Positively Balanced, LLC
Founder/Owner
[email protected]Acworth, GA 30101
Office: 770.975.1475 | 1.800.931.6038
Direct:770.738.7475 | efax 770.874.5007
Cell: 404.797.2423
www.positivelybalanced.com I
www.positivelyclosed.com**Celebrating 25 years in business in 2025**
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Original Message:
Sent: 01-02-2025 11:54
From: Janis Gaines
Subject: Outstanding Checks
Yes, every state has escheatment guidelines.
Mary Anne Harris, owner of Positively Balanced, recommends contacting the payee after 90 days unless it is something that is a lienable item.
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Janis Gaines
Real Estate Closing Path
Kennesaw GA
+1 (678) 331-4731
Original Message:
Sent: 12-27-2024 10:25
From: John Hammond
Subject: Outstanding Checks
OUTSATANDING CHECK POLICY: It would be very interesting to hear from the group on:" What is your firm's policy for dealing with outstanding checks in your escrow account?" Such as: How long before you contact the payee?; How long before you escheat the check to the state?; Are there any state or industry guidelines/rules for handling outstanding checks?
***Please note our new office address is: 3 Riverway, Suite 130, Houston, Texas 77056.***
| ***WARNING*** FRAUDULENT FUNDING INSTRUCTIONS: Email hacking and fraud are on the rise to fraudulently misdirect funds. Please call your escrow officer immediately using contact information found from an independent source, such as the sales contract or internet, to verify any funding instructions received. We are not responsible for any wires sent by you to an incorrect bank account. |