How much can a company charge to help me recover unclaimed property in Texas?

Texas AG Opinion JM-1228: Can an Heirfinder Charge Expenses on Top of the 10% Unclaimed-Property Fee?

Plain-English summary

A Texas House committee chairman asked whether a private investigator who tracks down the owner of unclaimed property, and helps that owner recover it from the State Treasury, could charge reasonable expenses in addition to the 10 percent finder's fee that state law allows. The Attorney General said no.

Property Code section 74.507 said that a person who tells a claimant they may be owed unclaimed property, or who files a claim on the claimant's behalf, "may not contract for or receive from the claimant for services an amount that exceeds 10 percent of the value of the property recovered." The heirfinder's argument was that "services" and "expenses" are different things, so the 10 percent limit governed only the fee for services and left expenses uncapped. The Attorney General rejected that reading.

The opinion concluded that "services" in section 74.507 includes expenses, so the 10 percent figure is a total ceiling on everything a claimant can be charged. Three lines of reasoning supported that result. First, the whole point of the unclaimed-property laws was to preserve the property for its true owner, and there was no mechanism to police whether add-on "expenses" were reasonable, so allowing expenses on top of the cap could swallow the property. Second, the Treasury Department, the agency that administered the statute, had long told the public in its claim forms and pamphlets that 10 percent was the total limit, and the legislature had never amended the statute to say otherwise. Third, Texas courts treated the word "services" broadly to include the cost of work done by others, not just one's own personal labor.

Currency note

This opinion was issued in 1990. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule mentioned here.

Who this opinion affected (as of 1990)

People owed unclaimed property: For an owner claiming money or property held by the State Treasurer, the opinion meant that no one who helped with the claim could lawfully charge more than 10 percent of the property's value, and that this 10 percent was supposed to cover the helper's expenses too, not just a service fee.

Heirfinders, private investigators, and asset-recovery firms: The opinion held that section 74.507's 10 percent cap was a total cap. Under the opinion, these firms could not contract for reimbursement of expenses in addition to the 10 percent, because the statute's reference to "services" was read to include expenses.

The Treasury Department: The opinion endorsed the department's published interpretation that 10 percent was the maximum total charge, and treated that longstanding, widely distributed interpretation as entitled to weight, especially given the legislature's failure to change the statute in response to it.

Common questions

How much could someone charge to help recover unclaimed property in Texas under this opinion?
No more than 10 percent of the value of the property recovered. The Attorney General read Property Code section 74.507 as a total cap on what a claimant could be charged.

Could an heirfinder bill expenses on top of the 10 percent?
No. The opinion concluded that the word "services" in section 74.507 included expenses, so expenses could not be added on top of the 10 percent limit.

Why did the Attorney General read the fee cap so strictly?
The opinion pointed to the purpose of the unclaimed-property laws, which was to preserve the property for its owner, and noted there was no way to check the reasonableness of claimed expenses. It also relied on the Treasury Department's longstanding published position that 10 percent was the total limit, which the legislature had left in place.

Where did the 10 percent limit come from?
The opinion traced it back to a 1961 statute (article 3272a, V.T.C.S.), which was later recodified into the Property Code. An earlier version had let a person collect up to 25 percent when a lawsuit was filed for the claimant, but that higher figure was dropped when section 74.507 was enacted in 1985.

Background and statutory framework

Title 6 of the Property Code governs unclaimed property in Texas, covering escheat (chapter 71), abandonment of personal property (chapter 72), inactive bank accounts (chapter 73), the report-delivery-and-claims process (chapter 74), and unclaimed mineral proceeds (chapter 75). The State Treasurer administered the title and could adopt rules for it under section 74.701.

The fee limit at issue, section 74.507, capped at 10 percent the amount a person could contract for or receive from a claimant "for services" in connection with recovering reported or held property. The opinion walked through the provision's history. It began as article 3272a, section 6(b), V.T.C.S., enacted in 1961, which used essentially the same 10 percent language but also let a person holding a power of attorney collect up to 25 percent when a lawsuit was instituted for the claimant. Article 3272a was amended in 1965 without changing the 10 percent rule, then repealed and moved (without substantive change) into section 72.506 of the Property Code in 1983. In 1985, section 72.506 was repealed and replaced by section 74.507, which kept the 10 percent cap but dropped the 25 percent litigation provision. In 1987 the legislature added a restriction barring a share of the underlying minerals or production payments when the property involved mineral proceeds.

To decide whether "services" included expenses, the opinion leaned on the purpose of the statutory scheme and on agency deference. It described the unclaimed-property laws as custodial rather than a true escheat, meaning the state holds the property so the owner can still claim it, citing State v. Liquidating Trustees of Republic Petroleum Co. and Attorney General Opinion MW-186 (1980). It noted that the Treasury Department's claim forms, pamphlets, and published owner lists all told the public that any fee was limited to 10 percent of the claim. Under Texas law, an administering agency's construction of a statute is entitled to great weight (Ex parte Roloff; Calvert v. Kadane; Stanford v. Butler), and that construction need not be a formally adopted rule; informal materials like letters and agency memoranda count (Southwest Airlines Co. v. Bullock). The legislature's failure to amend the statute in the face of the department's published reading suggested approval of it (Direlco, Inc. v. Bullock). The opinion also read "services" as a broad term covering the work of others enlisted to accomplish the task, not just personal labor (Van Zandt v. Fort Worth Press; Mathews Construction Co. v. Jasper Housing Construction Co.), and pointed to a California decision upholding a similar fee limitation (Goodman v. Cory).

Citations

Statutes:

• Tex. Prop. Code § 74.507 (limit on charges for recovering unclaimed property)
• Tex. Prop. Code § 74.701 (State Treasurer's rulemaking authority)

Cases:

• State v. Liquidating Trustees of Republic Petroleum Co., 510 S.W.2d 311, 313-14 (Tex. 1974)
• Van Zandt v. Fort Worth Press, 359 S.W.2d 893, 895-96 (Tex. 1962)
• Mathews Construction Co. v. Jasper Housing Construction Co., 528 S.W.2d 323, 326-27 (Tex. Civ. App. - Beaumont 1975, writ ref'd n.r.e.)
• Ex parte Roloff, 510 S.W.2d 913 (Tex. 1974)
• Calvert v. Kadane, 427 S.W.2d 605 (Tex. 1968)
• Stanford v. Butler, 181 S.W.2d 269 (Tex. 1944)
• Southwest Airlines Co. v. Bullock, 784 S.W.2d 563, 567 (Tex. App. - Austin 1990, no writ)
• Direlco, Inc. v. Bullock, 711 S.W.2d 360, 363 (Tex. App. - Austin 1986, writ ref'd n.r.e.)
• Goodman v. Cory, 191 Cal. Rptr. 272 (App. 1983)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-1228
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1990/jm1228.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

October 3, 1990

Honorable Ralph R. Wallace, III
Chairman
Cultural & Historical Resources Committee
Texas House of Representatives
P. O. Box 2910
Austin, Texas 78768-2910

Opinion No. JM-1228

Re: Authority of an heirfinder to receive compensation for expenses (RQ-1997)

Dear Representative Wallace:

You ask whether the Property Code prohibits compensation of reasonable expenses for private investigators who search for, locate, and assist missing owners in recovering unclaimed assets held by the Treasury Department (hereinafter the department).

Title 6 of the Property Code governs unclaimed property in Texas. See generally Property Code chs. 71 (escheat of property), 72 (abandonment of personal property), 73 (inactive accounts held by banking organizations), 74 (report, delivery, and claims process), 75 (Texas minerals). The state treasurer is charged with the administration of this title and may adopt rules necessary for its administration pursuant to section 74.701 of the code.

Your question focuses on the language of section 74.507 of the Property Code, which reads:

A person who informs a potential claimant that the claimant may be entitled to claim property that is reportable to the State Treasurer under this chapter, that has been reported to the State Treasurer, or that is in the possession of the State Treasurer, or a person who files a claim under this subchapter for such property on behalf of a claimant, may not contract for or receive from the claimant for services an amount that exceeds 10 percent of the value of the property recovered. If the property involved is mineral proceeds, the amount for services may not include a portion of the underlying minerals or any production payment, overriding royalty, or similar payment. (Emphasis added.)

A brief submitted in connection with this request suggests that the term "services" does not include "expenses," and that a private investigator may, therefore, receive reasonable expenses in addition to ten percent of the value of the property recovered. We disagree.

Section 74.507 was originally enacted in 1961 as article 3272a, section 6(b), V.T.C.S., which contained essentially the same language and provided in part:

No person holding a power of attorney from a claimant . . . shall contract for or receive from the claimant for his services an amount in excess of ten percent (10%) of the value of the property recovered.

Acts 1961, 57th Leg., 1st C.S., ch. 21, § 1, at 49. This section provided further that when a lawsuit was instituted on behalf of a claimant, the person holding the power of attorney could receive up to 25 percent of the value of the property recovered. Id. Article 3272a was amended in 1965 without affecting the language of section 6(b). See Acts 1965, 59th Leg., ch. 565, § 3, at 1233. With the enactment of the Property Code in 1983, a nonsubstantive revision of the Texas statutes relating to real and personal property, article 3272a, V.T.C.S., was repealed, and the provisions of section 6(b) were transferred without substantive change to section 72.506 of the code. See Acts 1983, 68th Leg., ch. 576, § 1, at 3603.

In 1985, section 72.506 was repealed and replaced by section 74.507, which provided in its entirety:

A person who informs a potential claimant that the claimant may be entitled to claim property in the possession of the State Treasurer or a person who files a claim under this subchapter on behalf of a claimant may not contract for or receive from the claimant for services an amount that exceeds 10 percent of the value of the property recovered.

Acts 1985, 69th Leg., ch. 230, § 17, at 1138. The language allowing a person to receive up to 25 percent of the value of the property for representing a claimant in a lawsuit was not carried forward. In 1987 further restrictions were placed upon the amount an individual may receive for services when the property involved is mineral proceeds. See Acts 1987, 70th Leg., ch. 426, § 5, at 1985 ("amount for services . . . may not include a portion of the underlying minerals or any production payment, overriding royalty, or similar payment").

The department asserts that the public policy pronounced by the legislature and the "basic underpinning" of the unclaimed property statutes is the complete preservation of the corpus of unclaimed property until it is reunited with the rightful owners. Indeed, the emergency clause to the 1961 act adding article 3272a, V.T.C.S., stated:

The fact that the present laws providing for the protection of abandoned property, the . . . and the escheat of money and personal property belonging to the State are inadequate, and that there are large amounts of money and personal property to which the State is entitled, and which property is subject to loss and dissipation, create an emergency.

Acts 1961, 57th Leg., 1st C.S., ch. 21, § 5, at 58 (emphasis added). Besides indicating the legislature's desire to preserve unclaimed property for private owners, the emergency clause also reflects the legislature's intent to protect its interests in such property. In 1961, the state could only take control of abandoned property through judicial proceedings, a rather costly and cumbersome way to accomplish the purposes of the statute. Recognizing that "in many instances the cost of citation by publication, court costs and travel expenses would exceed the value of the property reported as abandoned," the 59th Legislature amended the statute. Acts 1965, 59th Leg., ch. 565, § 8, at 1235. We think the legislature's actions to preserve the corpus of the property were motivated by a desire to protect the interest of both the state and any unknown owners. State v. Liquidating Trustees of Republic Petroleum Co., 510 S.W.2d 311, 313-14 (Tex. 1974) (although article 3272a is commonly referred to as an escheat law, it is custodial in nature, and anyone may file a claim for such property with the state treasurer); Attorney General Opinion MW-186 (1980) ("the state never actually takes title to the property, since the owner may claim the property or its value at any time"); see also Uniform Unclaimed Property Act prefatory note, 8A U.L.A. 216 (1981) ("Not only does the custodial type of statute more adequately preserve the owner's interests, but, in addition, it makes possible a substantial simplification of procedure").

Since at least one purpose of the unclaimed property laws of Texas includes protection of unknown owners' interests, we must evaluate how that purpose is best accomplished. We have been provided samples of various "heirfinder" contracts that attempt to obtain up to 60 percent of the value of the property received by the claimant.¹ If we were to read the statute as authorizing a private investigator or other person to receive ten percent of the value of the property plus expenses, there is no mechanism in place for determining the reasonableness of expenses. Therefore, we think that a construction of Property Code section 74.507 that would allow a private investigator or "heirfinder" to contract for expenses, potentially in excess of the value of the property, would be contrary to the enunciated public policy and intent of the legislature to preserve the unclaimed property for its owner.

The department, as the state agency charged with the administration of the Texas unclaimed property laws, has interpreted section 74.507 to mean that ten percent of the property value is the total amount an individual may receive for assisting a claimant in recovering assets held by the department. The department argues in its brief on this matter that "services" is a broad and comprehensive term, which encompasses not only one's personal services in completing an objective but also includes activities of others enlisted to accomplish the goal. See Van Zandt v. Fort Worth Press, 359 S.W.2d 893, 895-96 (Tex. 1962); Mathews Construction Co. v. Jasper Housing Construction Co., 528 S.W.2d 323, 326-27 (Tex. Civ. App. - Beaumont 1975, writ ref'd n.r.e.) (distinction between "services" and "personal services"). It is the department's position that the charge for services, i.e., personal services and incidental expenses, may not exceed ten percent of the value of the property recovered.

It is well established that the construction of a statute by the agency charged with its administration is entitled to great weight. Ex parte Roloff, 510 S.W.2d 913 (Tex. 1974); Calvert v. Kadane, 427 S.W.2d 605 (Tex. 1968); Stanford v. Butler, 181 S.W.2d 269 (Tex. 1944). It is not required that the agency publish formally adopted rules stating such interpretation; policy documents such as letters to affected persons or internal agency memoranda may also evince an agency's interpretation of a particular matter. Southwest Airlines Co. v. Bullock, 784 S.W.2d 563, 567 (Tex. App. - Austin 1990, no writ). The "Texas Treasury Unclaimed Money Fund Original Owner Claim Form," the form the department provides to individuals who wish to file a claim with the department, states:

If someone informs or assists you in claiming these funds and asks for payment, STATE LAW LIMITS ANY FEE TO NO MORE THAN 10% OF THE AMOUNT OF THE CLAIM.

The department also provides to interested persons an informational pamphlet entitled "Most Commonly Asked Questions on Heirfinding in Texas," which states on the first page:

PLEASE NOTE: Expenses incurred as well as the services provided are limited to one fee not to exceed 10 percent of the value of the property recovered.

Another pamphlet distributed by the department, entitled "Money Search: Do You Have Cash in the Texas Treasury Unclaimed Money Fund," states that "State law limits fees charged by these private firms to no more than 10 percent of the claim." We have also been provided with a sample copy of the annual list of names of persons having money in the Unclaimed Money Fund which is published by the Treasury Department for distribution in major Texas newspapers. That published listing also states that a person reclaiming property "may not be charged more than 10 percent of the claim amount by anyone who assists in claiming these funds."

We think that the department's interpretation of the statute in question has been widely published and that the legislature's failure to amend the statute is indicative of its approval of the department's interpretation. Direlco, Inc. v. Bullock, 711 S.W.2d 360, 363 (Tex. App. - Austin 1986, writ ref'd n.r.e.). Although we have found no Texas cases regarding this issue, we note that similar statutes with fee limitations have been upheld in other states. See Goodman v. Cory, 191 Cal. Rptr. 272 (App. 1983). We therefore conclude that a private investigator or other person who assists a claimant in recovering assets held by the department pursuant to Property Code section 74.507 may not contract for or receive from the claimant an amount that exceeds ten percent of the value of the property recovered. The term "services" as used in this section includes expenses. Any other construction of this provision, we think, would be contrary to the legislature's enunciated public policy, the intent of the legislature, and the interpretation of the agency charged with its administration.

SUMMARY

A person who assists a claimant in recovering assets pursuant to section 74.507 of the Property Code may not receive an amount for services (including expenses) that exceeds ten percent of the value of the property recovered.

Very truly yours,

JIM MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Karen C. Gladney
Assistant Attorney General