October 3, 1990 

Honorable Ralph R. Wallace, III opinion No. JM-1228 

Chairman 

Cultural & Historical Resources Re: Authority of an heirCommittee finder to receive compenTexas House of Representatives sation for expenses 

P. 0. Box 2910 (RQ-1997) 

Austin, Texas 78768-2910 

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 uenerallv Property Code chs. 71 (escheat of 

prw=*y) I 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 oerson 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, mav not contract for or receive 

from the claimant for services an amount that, 

exceeds 10 oercent of the value of the 

prooertv recovered. If the property involved 

is mineral proceeds, the amount for services 

may not include a portion of the underlying 

p. 6525 

. 
Honorable Ralph R. Wallace, III - Page 2 (JM-1228) 

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 wexpenses,w 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Section 74.507 was originally enacted in 1961 as 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, 5 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. ;Lg, Article 3272a was amended in 1965 

without affecting the language of section 6(b). See Acts 

1965, 59th Leg., ch. 565, S 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. m Acts 1983, 68th Leg., ch. 

576, S 1, at 3603. t 

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 beg., ch. 230, 6 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 

p. 6526 

. 
Honorable Ralph R. Wallace, III - Page 3 (JM-1228) 

not carried forward. L In 1987 further restrictions were 

placed upon the amount an individual may receive for 

services when the property involved is mineral proceeds. 

&=;zzz 1987, 70th Leg., ch. 426, S 5, at 1985 (lOamount for 

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 m 

for the Drotection of a&&oned DroDertv. the 

* 0 * 8 

and thm escheat ofmev and Dersonal Dropertv belonaina to the State are inadeouate, 

and that there are large amounts of money and 

personal property to which the State is 

entitled, and which DroDertv is subiect to 

&ass and diSsiDatiOn, create an emergency. 

Acts 1961, 57th Leg., 1st C.S., ch. 21, 5 5, at 58 (emphasis 

added). Resides 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, 0 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. 

Stnte,v.z Liauidatinu ru tees of ReD lit Petrol 

S.W.2d 311, 313-14 (zex: 1974) (altE:ugh 

eum Co,, 510 

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 

p:6527 
Honorable Ralph R. Wallace, III - Page 4 (JM-1228) 

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. a Van 

es, Zandt v. 359 S.W.Zd 893, 895e96- ' (Tex, 

1962); Co. Mathews Constr Constr. co., 

528 S.W.Zd 323, 326-27 (Tex. Civ. App. - Beaumont 1975, writ 

ref'd n.r.e.) (distinction between %ervices" and "personal 

servi.cesl'). It is the department#s position that the charge 

for services, d&L, 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 

1. In the' past three years, fifty-eight cases involving heirfinders attempting to charge fees far in excess 

of the statutory ten percent have been referred to the 

Consumer Protection Division of this office. 

p. 6528 
, 

1 Honorable Ralph R. Wallace, III - Page 5 (JM-1228) 

: 

. 

entitled to great weight. u carte Roloff, 510 S.W.2;,,;;3 

(Tex. 1974); Calvert . Ka&~.8 427 S.W.2d 605 (Tex. 

Stanford v. Butler, lzl S.W.2d' 269 (Tex. 1944). It is no: 

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. B llock, 784 S.W.2d 563, 

567 (Tex. ADD. - Austin 1990. no wri:). The "Texas Treasurv 

Unclaimed Money Fund Original Owner Claim Fdn~,~, the for+ 

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 OFTHE 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 

s+*+utn 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, 

I n . v. B llock 711 S.W.Zd 360, 363 (Tex. 

19E6, wriy ref’ii n.r.e.). 

APP. - Austin 

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. Gory 191 Cal. Rptr. 272 (App. 

We there&e conclude that' a private investigator or 

1983). 

other 

person who assists a claimant in recovering assets held by 

p. 6529 
Honorable Ralph R. Wallace, III - Page 6 (JM-1228) 

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 nservices,, 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 reovering 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. 

JIM MATTOX 

Attorney General of Texas 

NARYKEZLER 

First Assistant Attorney General 

Lou MCCREARY 

Executive Assistant Attorney General 

JUDG6 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 

p. 6530