What You Need to Know About Tennessee Abandoned Property Laws: A Complete Guide

Tennessee Abandoned Property Law 101

Abandoned property is not a term covered by one simple definition; its meaning can vary depending on the relevant jurisdiction. Generally speaking, however, abandoned property refers to tangible property that its owner has voluntarily forsaken. The concept of abandonment also may apply to intangible property, such as a debt or bond that has been unclaimed for a certain amount of time. Individuals who own property that they wish to abandon, whether intentionally or otherwise, must keep in mind how the law defines the term "abandonment" within their respective jurisdictions.
Tennessee law refers to abandoned property as unclaimed property or cash that has been left behind by the owner for a length of time that is required by Tennessee statute (Tenn. Code Ann., § 45-1-102) . Although abandoned property can encompass various types of tangible and intangible property, such as electronics, money and vehicles, state and federal laws require businesses and individuals to take actions regarding unclaimed property of any kind within a specific time frame. If these actions are not completed, then the law allows the state to take possession of the abandoned property and keep it after that time period has lapsed. It is important to note that even if an individual has no intention of abandoning their property, the law can still classify it as abandoned if the owner has failed to take necessary actions concerning its use or maintenance.
Because the laws related to abandoned property can be difficult to understand and apply, failure to comply with these laws can result in penalties, expensive fees, and legal disputes. As a result, individuals and businesses must understand all relevant abandoned property laws within their respective jurisdictions.

A Property Must Meet Three Criteria to Be Considered Abandoned

Under Tennessee law, the criteria the courts will consider in determining whether property is "abandoned" and thus, extinguished under a judgment lien can be found at T.C.A. § 28-3-110. Under the statute, the creditor has the burden of establishing that the property identified as exempt from levy and execution (real property) was abandoned for at least two years immediately preceding the entry of the judgment entry based on the creditor’s action. Ejectment actions are summary proceedings to determine the right of possession to real property claimed by two or more parties. Ejectment actions are real-property specific. Tenn. R. Civ. P. 1. The ejectment statute, like the statute regarding judgment liens, provides that as long as the party claiming property in an adverse possession situation did not abandon the property but instead continuously exercised use of the property, then the party wins. However, as noted above, the statute regarding judgment liens requires the creditor to show that the property was abandoned for at least two years immediately preceding entry of the judgment based on the creditor’s action.

The Owner of Abandoned Property Has Responsibilities

Property owners have both rights and responsibilities when it comes to potentially abandoned property. In general, the property owner has the right to handle the abandonment according to the aforementioned process, provided all terms and conditions of sale are met and a full accounting of the purchase price is provided to whoever disposes of the property. Furthermore, a clear chain of title must be provided. Any discrepancies in payment, transfer of deed, etc. can spell disaster for some seemingly innocent "scavenger" swinging by to pick up abandoned property.
Landowners are basically obligated to return property to its rightful owner, even if they have to go through the above-mentioned steps, as the abandoned property may be subject to a decision about legal ownership that may affect the property owner’s title to their own land. They cannot just maintain a "finders-keepers" policy and watch their property accumulate without any regard for who the property really belongs to. As stated above, if an owner goes through the proper abandoned property process and the other owner cannot be identified. The property may then be defined as unclaimed property, which can be legally claimed by the finder or the owner of the land on which it was found. Whether the latter or the former obtains the right to the property will depend on how long it was left unattended and for the legal process that had to be undertaken to claim it.

Finders of Abandoned Property Have Certain Rights

As previously discussed above, the finder of lost personal property may be entitled to statutory rights under Tenn. Code Ann. § 30-2-101 if the property is discovered within the property of another. A person who finds abandoned personal property upon the lands or waters of Tennessee has the right to possession, and if the property is not claimed by any other within thirty (30) days from the time of finding, the finder may keep the property as his or her own, pursuant to Tennessee Code Annotated § 30-2-203. However, Tennessee law also provides a further statutory process whereby a finder of abandoned property may petition the county mayor and/or county court for an order directing the county trustee/tax collector to sell the property for the benefit of the finder. Tenn. Code Ann. § 30-2-202. Such a petition must be filed with the county court having jurisdiction over the property at least twenty-one (21) days before the petition is set for a hearing. In the event that more than one person claims the property, a hearing shall be held and the property shall be delivered to the party determined by the court to be entitled to it, or to representative of the party determined to be entitled to it. If no claim is made to the property within ninety (90) days from the filing of the petition, the property shall be deemed abandoned and may be disposed of by the trustee. Alternatively, the trustee may elect to sell the property for the benefit of the finder of such property after deducting the costs for keeping, advertisement and sale. Id.

The Process for Reporting and Dealing with Abandoned Property

Upon the expiration of the Dormancy period, these funds must be reported to the state if the owner of the funds has not returned or recovered them. The program responsible for the collection and management of unclaimed property in Tennessee is the Unclaimed Property Division of the Office of the Tennessee Department of Treasury. Beginning on July 1 of each year, property which has been reported as unclaimed is made available through the Department’s escheatment database for claimants. Any potential claimant may search for their property online, request a search, or down load the most currently available files from the Department’s website. If the property cannot be identified through the website, either by general information search, search of the various statewide databases, or by request, then the next step is to file a claim for the property. Despite the work being performed by the Department to reunite found funds with the person entitled to receive them, there remains a certain amount of unclaimed property which is never reclaimed by the owner. Factors which play a role in this phenomenon include: lack of awareness of the existence of the unclaimed funds; lack of knowledge of the process to be followed in order to reclaim the funds; and the belief that the process will take an inordinate amount of time. It is estimated "Funds reported as unclaimed in Tennessee during FY 2014 totaled $71,345,210.98 and resulted in the payment of $40,612 , 696.11 of claims." In response to the the state of the funds being held by the state and the growing gap between the money being received and the amount of claims being paid out, the Department initiated the annual "Claimant Appreciation Day". On this day the Department holds a special event, including meeting with potential claimants to assist them in the filing of their claims. Ten claimants will be chosen to receive $1,000.00 from the State. One of the biggest takeaways from this program is that funds which are reported as unclaimed are not just financial assets. These funds range from cashier’s checks, over payments, to lost valuables. So not only does the Claimant Appreciation Day make it known that unclaimed property being held by the state can be claimed, it also provides the public with the opportunity to receive lost assets or property. Currently the major function of the Unclaimed Property Division of the Office of the Tennessee Department of Treasury is to maintain a database showing the property which has been submitted to the Department as unclaimed. To a large extent this is designed to promote transparency in how unclaimed funds are handled. It is still unknown whether the administrative process towards holding a Claimant’s Day outside of the Department’s headquarters will take place. Therefore the onus is placed on the claimants to familiarize themselves with the Department’s website, and if necessary contact the Department with any questions regarding the claims process, or unclaimed property.

Abandoned Vehicles are a Different Kind of Animal

Abandoned vehicles constitute a unique category of abandoned property in Tennessee. They are governed by a separate statutory section, T.C.A. § 55-16-105, and fall outside the typical 90-day or other time limitations found in most personal property statutes. Abandoned motor vehicles include vehicles not adequately identified by a vehicle identification number ("VIN"), as well as cars and trucks that appear to have been abandoned.
For property to be considered abandoned and for a person’s possessory interest in the property to be extinguished, it must be "left without the consent of the owner at a place where the owner does not intend for it to remain." Johnson v. Micro World, Inc., No. M2003-03172-COA-R3-CV, 2004 WL 1915345, at *4 (Tenn. Ct. App. Aug. 25, 2004) (quoting Black’s Law Dictionary 6 (7th ed. 1999)). T.C.A. § 55-16-104 defines an abandoned motor vehicle as one:
Left unattended on any road, street, highway, or right-of-way for three (3) days; or
Left unattended in any public place or place accessible to the public for longer than ten (10) days; or
With a registration number plate upon which the registration has expired; or
Having no registration number plate; or
With a VIN that is not clearly visible; or
Missing tires, wheels, engines, exhaust systems, transmissions, or any other parts which prevent the motor vehicle’s safe and lawful operation on the highways of this state.
Abandoned vehicles may be reported to local law enforcement. If such a vehicle is not removed, the local law enforcement agency must either take possession of the vehicle or request county assistance within 72 hours of the report. T.C.A. § 55-16-105.
Once a report of an abandoned vehicle is made to local law enforcement or the county or municipal maintenance department, "the roadway maintenance department [must] remove the property after ten (10) days from the roadside or highway on which it is located." T.C.A. § 55-16-104.
Abandoned vehicles are different than other forms of abandoned personal property because there are separate statutory processes for their disposal. Thus, if you board up a home but do not dispose of the vehicles on the property, the home will likely be considered abandoned. However, the failure to dispose of the vehicles will not convert them to abandoned property.

Abandoned Property Can Create Legal Issues and Disagreements

An understanding of the law of abandoned property involves an understanding of ownership and possession in the context of what constitutes discovery. In general, a finder of abandoned property has superior rights to anyone other than the original owner. Abandoned property may be the basis for litigation and courts have resolved disputes between different finders of property. The most important case, decided by the Tennessee Supreme Court, held that an intruder (a trespasser) can claim superior rights to property over the original owner, and another case involving a buried treasure held that prior ownership trumped the finding of the property.
More disputes arise, however, when a fixture is involved and the person who placed it there (essentially the owner) wants it back and the party who found the fixture wants to keep it. For example, the Tennessee Supreme Court has held that a railroad company had superior rights to a pipe embedded in a highway which the State claimed was its property. In a more recent court of appeals case, an insurance company was unsuccessful at claiming ownership of a safe, which it argued passed as cargo in transit.
The Tennessee version of the Uniform Abandoned for Unclaimed Property Act provides that no lien on abandoned property is terminated until the property is sold at public auction. Other potential violators face the threat of a fine of a hundred dollars per day for an amount not to exceed ten thousand dollars, as well as the State’s standard post-judgment interest rate of ten percent. In the event of an injury to a third party caused by unclaimed property, the State may sue the property holder for judgment equal to the amount of any damages. The injured party can also obtain a lien on the property.
In Tennessee, the finder of abandoned property has priority over everyone except the original owner. Property which is lost is treated differently, because the original owner retains ownership, but possession is considered abandoned. In cases where a fixture is intereed, the party who who placed the fixture retains superior rights.

Conclusion and Tips to Avoid Problems

In this article, we explored what abandoned property is under Tennessee law, how landlords can approach the management of property left behind by tenants, and what owners of residential rental property are required to do with abandoned property. We also looked at the requirements local governments have when they find abandoned property, and how they are supposed to address it. Additionally, we discussed what liabilities a landlord is exposed to as a result of a tenant leaving property behind, and how they can protect themselves, by following required procedures relating to the collection and disposition of abandoned property.
As outlined in the article, both the landlord and the tenant have certain obligations that govern the disposition of abandoned property. When properly followed , these procedures protect both parties from liability or losses due to lack of action. Having written communication of potential options as to the management of property left behind is the best way to ensure that all parties participate and understand how the abandoned property will be handled. As this article highlights, a tenant relinquishes his or her rights to property left after termination of the lease, but as a landlord, you should make sure to follow these prescribed procedures surrounding abandoned property in order to ensure that you are fully protected. Doing so will also help ensure that your tenant cannot in the future raise an adverse claim of possession against you with respect to any abandoned property left behind at the end of the lease.