Douglas County establishes policy to collect unclaimed property overbid dollars

Douglas County Commissioners approved a new policy that allows the county to collect unclaimed property overbid dollars, instead of sending that money to Colorado's property payback fund.

Since 2017, Douglas County has collected $5.5 million in unclaimed overbids for abandoned properties sold by the county, according to the Douglas County Public Trustee's office.

Of which, in the past two years, the county has transferred roughly $1.3 million to the Colorado Payback Fund — a refund that is part of the state’s unclaimed property act, according to Douglas County Public Trustee's office Chief Deputy Holly Ryan.

When Douglas County holds a public trustee deed sale, property sales begin with a lender’s bid. Member’s of the public who attend the sale also bid on properties, and the highest bidder becomes the property's owner. If the owner's bid on a property is over the lender’s total debt bid amount, that extra money is considered “overbid funds,” according to the Douglas County Public Trustee's office.

With the new resolution, Douglas County is allowed to withhold overbid funds for five-to-six years, collect interest on the funds and, if the money isn't collected by the property owner within that time, it would be sent to Douglas County’s general fund, Ryan told commissioner's on Tuesday.

“You would hold these funds in a special account where the county gets to earn the interest," Ryan said. "If anybody comes forward during that five or six year period and then claims those funds, then they would get paid out to that borrower. If not, at the end of those five years, those funds would be turned over to the general fund for you to use as you choose."

State law allows Colorado counties the ability to adopt a resolution addressing property management policies. In Douglas County's case, commissioners on Tuesday adopted its own resolution to retain some of the unclaimed property overbids or assets for the five-to-six years, whereas the state can hold unclaimed money and property indefinitely.

"We hold assets on behalf of consumers and even their heirs forever, while local governments are only required to hold these assets for five years," Colorado Treasurer Dave Young told The Denver Gazette, responding to Douglas County's resolution. "This means potentially millions of dollars consumers can claim from the state without having to worry about a five-year timeline."

Tuesday’s approval simultaneously allows the county to inject $295,000 into its new unclaimed property fund, due to a recent property owner not showing up to claim that amount, while another $195,000 awaits to be claimed, according to county officials.

For example, if a foreclosure sale with the county is set at $300,000, but bids total $350,000, then the extra $50,000 would be considered overbid funds and owed back to the property borrower. If that money is not first claimed by a junior lienholder, then it gets put into the unclaimed property fund for it to be later redeemed.

If the overbid dollars aren't redeemed after five-to-six years, then the county can move those dollars into its general fund.

"We look forward to working with Douglas County to continue serving consumers in the best way possible," Young said. "This includes the statutory requirement for local governments to share information with the state so Coloradans can use the Great Colorado Payback website to search for all of the money they are owed across all parts of the state."

The Great Colorado Payback has returned over $720 million back to Coloradans, according to the treasurer's website .

Despite retaining overbid dollars, Douglas County officials urge residents to check if they have unclaimed property or overbids. The new resolution only applies to amounts more than $25.

In a statement, county officials said: “we do our best in locating borrower’s (party obligated under the evidence of debt ‘note’ for which the Deed of Trust was foreclosed, or their heirs) to make sure that the State or now the County does not end up with the funds.”

County officials added: “We will continue to do our due diligence to make sure the residents of Douglas County receive their money.”