§ 254. Disposition of lost property. Except as provided in section two hundred fifty-six of this chapter, lost property deposited with the police, and the money constituting proceeds of lost property sold as provided in subdivision five of section two hundred fifty-three remaining after deduction of expenses as therein provided, shall be disposed of as follows:

1. It shall be delivered to the owner, upon his demand and upon payment of all reasonable expenses incurred in connection therewith, if no written notice of any other claim to the property has been served upon the police having custody, and the time specified in subdivision seven of section two hundred fifty-three of this chapter has not expired or, if such period has expired, no demand has been made by the finder or a person entitled to assert the right of the finder as provided in section two hundred fifty-six of this chapter.

2. If at the end of the period specified in subdivision seven of section two hundred fifty-three of this chapter the owner has not claimed the property, it shall be delivered to the finder, or person entitled to assert the rights of the finder as provided in section two hundred fifty-six of this chapter, upon his demand therefor, and upon payment of all reasonable expenses incurred in connection therewith.

3. If at the end of ten days after expiration of the period specified in subdivision seven of section two hundred fifty-three, the owner has not claimed it, and no demand has been made by the finder or a person entitled to assert the right of the finder as provided in section two hundred fifty-six of this chapter, property consisting of money shall be paid as provided in section two hundred fifty-eight of this chapter and other property shall be sold at public auction and the proceeds shall be paid as provided in such section two hundred fifty-eight. Where the property was deposited with the state police, such sale shall be held in accordance with rules of the comptroller.