For how long must brokers retain records of real estate transactions?

Brokers are required to retain records of real estate transactions for a minimum of five years. This requirement is in place to ensure that necessary documentation is available for any legal issues, disputes, or audits that may arise from the transactions. Keeping records for five years allows for adequate time to address any claims or inquiries and aligns with regulations that govern real estate practices.

While some might think that a longer retention period, such as ten years or indefinitely, might be more prudent, the five-year rule strikes a balance between thoroughness and practicality. This timeframe ensures compliance with most state laws, which typically dictate that records must be kept for a duration that can adequately cover potential legal and financial repercussions stemming from the associated transactions. The three-year option is insufficient, as it does not account for the full potential duration that disputes might emerge, ultimately leaving brokers vulnerable to non-compliance.