Common DOI Management Issues: Address Variations
Owner address issues are varied in division order work. Beginning with the constant problem of trying to fit a long street address into a data entry field with not enough available spaces, to an owner’s request to have royalty checks sent to a Florida address during specific winter months and to a New York address the remainder of the year. Usually, there is a company policy or guideline that will take the headache out of solving the problem for the analyst, and these two examples are no exception.
There are companies that do not provide such guidelines, or issues that come up that are not covered by the company’s guidelines. This week’s blog will attempt to illustrate some of those instances, hoping to give the analyst a smidge more experience and knowledge than they had before reading this blog. By the way, the alternating remittance addresses can be resolved by having the owner convert to automatic deposits instead so they can access online the funds in their bank, or asking them to place mail forwarding orders with the USPS as needed. No company is obligated to birddog an owner’s account to change addresses twice a year.
Another address setup issue encountered routinely by a division order analyst is when a large oil company requests that their revenues for properties be remitted to different addresses based on the state in which the property is located. For example, a major oil company might as that remittances for their properties in Texas, Oklahoma, Louisiana, Arkansas, Mississippi, Alabama, and Florida be remitted to a Dallas address while their joint billing invoices be mailed to a Houston address, and their revenues for properties in New Mexico, Colorado, Utah, and California be remitted to a Denver PO box address with billings mailed to a Denver street address. Such a request is common. Unfortunately, the payer must comply with the request.
Such a request will require using the alternate-address function available in most database systems today. The owner number will have more than one address associated with it, and the coding in the DOI will use whatever alternate address code necessary for that owner number for that property. It will be a painstaking task, but the correct alternate addresses must be set up for the owner number, and then the analyst must perform a transfer process in the database to transfer the revenue owner number to the one tied to the correct address, and the same for the joint interest billing (JIB) address. The transfer process usually can tie each of the owner’s properties in that address group together in one revenue process, but a new process will have to be done for the same group of properties to transfer the old JIB address to the new JIB address. Then, the two-step process is repeated for the next group of states’ properties and addresses. There’s an old saying in division order work: “it all pays the same.”
Another issue, seldom discussed, is that of processing returned mail and updating the records. While the owner’s account in the DOI will be transferred from pay status to suspense for bad address, too often a company will have a policy of always removing the bad address from the record. The advantage in doing this is that no other mail can be addressed to the bad address again, but a possible huge disadvantage occurs if the company also removes the city and state names from the record. It’s okay to remove the street address, or replace it with UNKNOWN, but removing the city and state names cause a serious problem with unclaimed property reporting.
Unclaimed property must be reported and submitted to the state of the owner’s last-known address, which is not always the state where the producing property is located. If an address for the owner was never known, such as the name appearing in an Affidavit of Heirship filed of record without an address included in it, the unclaimed property (royalties) for that owner must be remitted to the state of the payer’s (company’s) incorporation. To illustrate the problem, here is a quick example.
Say an owner lives in New Jersey, but the producing property in which they own their royalty is located in Texas. By removing the names Newark, NJ from the owner record, it will appear that the company never knew the owner’s last known address, which is incorrect—the company did know it, and removed it from the record. This particular company is incorporated in Delaware. The company will follow the timetable for unclaimed property reporting as required by Delaware, different from the reporting timetable set out by Texas. The company will then report and submit payment to Delaware by mistake, when it should have gone to Texas, and should have been paid a few months earlier. Worst of all is the fact that the owner or owner’s family (if the owner’s death is the reason the mail was returned) will have no clue to look at Delaware unclaimed property records to find the missing royalties.
A final word of wisdom is to always use a signed IRS W9 form for both the address and Tax ID entries in an owner number setup. Anyone can download a copy of the most current IRS W9 form to use, by going to irs.gov and entering W9 in the search field at the top of the screen. Including a blank W9 form in the division order packet is a standard procedure for most companies in the industry.
Next week’s blog will be “Texas Probate Documents Case Study: Intestate Estate.”