Does anyone know if there is a right to offset against a past due (by about 7 years now) safe deposit box? We have mailed payment due notices to the customer, and have never received any form of payment. We know this is a current customer, who has several checking and savings accounts with us - he is just "refusing" to pay rent on his box.

I am in the process of doing our abandoned property report, and if he will not respond to any type of notice and verify that he wants to keep the box open, we will be forced to drill the lock (a fee which would normally be charged to the customer) and give that box to a PAYING customer. The dormant letter has been sent, but again, no reply from the customer.

Does anyone have some advice on this situation? Do I still drill the box and turn property over to the state? Can we take the necessary amount to cover the box rent and/or locksmith fees from an active account to cover amounts owed to the bank??

Thanks for the help

Here is my opinion - obviously you shouldn't have waited seven years to try to collect, but getting past that - your contract language should say whether or not you have the right of setoff for the past due rent. However, that is not the route that I would take at this time. Start sending the required letters for drilling. I believe you have to send one letter (stating that "...we will drill the box if we do not collect the rent..." Wait about 10 days, send another letter saying a little more forcefully that you will drill the box if you don't have a response by XX date. Then send the final certified letter if you don't hear from him, stating that in 10 days, the box will be drilled. Drill the box, hold the contents for escheatment to the state (as required by your state)and get the box ready for the next renter. If there is nothing in the box, then no problem, just make sure you do that part correctly (witnesses and all.) This is just the way we would do it after someone was delinquent for that long, and just my opinion.

BE CAREFUL!!!
The specifics of how you handle the drilling process are controlled by your state's safe deposit laws and regulations. Make sure you research those before following any suggestions from someone not in your state. Since you posted anonymously, we don't know where you are.

In addition to any applicable state laws and regulations, review the contract the renter signed. Modern contracts generally address most of the issues you raise.

One additional tought, if you do decide to drill it, it might be a good idea to video the entire procedure, including the documentation of what is in the box. This could be a benefit in the long run, if the customer claims goods are missing (gee, Granny's $250,000 diamond broach is gone...)

This is interesting. Do you video everytime you have had to drill a box?

Quote:

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Granny's $250,000 diamond broach is gone

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Actually on the inventory log it should appear as a metal broach with clear stones.

How about drilling a box that has not been delinquent so long? We have a customer who stopped paying on the box and says she lost the keys. We have tried to set up an appointment with her to be present when we drill, but she refuses to come. We are having it drilled, and our contract says we can offset the cost of drilling against accounts they have with us. However, I am concerned about the contents of the box. If she has cash in the box, do we just give it to her? Or so we file a SAR? Call the cops?

This person is already alledgedly under investigation for selling stolen property. I am afraid of what we might find.

Oh yes, we are having three people present at the opening, the Branch Manager, Compliance Officer (me), and Customer Service Rep who is also a notary.

Any suggestions?

I am not sure if I understand this. If you know the whereabouts of the customer and have had contact with the customer, why would you consider it to be abandoned property and why would you drill the box? Can't you just hold the property until time for him to enter his box and collect fees at that time?

BrownEyes -

There are actually two seperate issues being addressed - (1) Drilling for delinquent rent and(2) Abandoned property escheatment.

Abandoned property is a matter of State Law and since the original post from Anon did not indicate the State where they are located, it would be hard to tell. But, as far as Texas law is concerned you are correct, if the whereabouts of the SDB owner is known, the contents are not truly abandoned and therefore would not need to be escheated.

Drilling for delinquent rent and whether you can offset that cost is also a matter of your contract and state law. Forcible entry, content inventory and removal should be handled properly. But I would first want to determine if the contract provides right of offset for the collection of past due rent.