Best Practices for Record Retention

I have never had a case where I wished an agent hadn’t kept documents.  The fact is keeping transactional documents are essential in either prosecuting or defending a civil, board or regulatory claim.  As you know, Ohio license law requires licensees to retain transactional documents, but does not go into great detail as to exactly which documents you should keep.  Here is what the law.  R.C. 4735.18(A)(24) permits a licensee to be sanctioned for a violation of the following:

Having failed to keep complete and accurate records of all transactions for a period of three years from the date of the transaction, such records to include copies of listing forms, earnest money receipts, offers to purchase and acceptances of them, records of receipts and disbursements of all funds received by the licensee as broker and incident to the licensee’s transactions as such, and records required pursuant to divisions (C)(4) and (5) of section 4735.20 of the Revised Code, and any other instruments or papers related to the performance of any of the acts set forth in the definition of a real estate broker.

The Division does not distinguish between closed and failed transactions.  Consequently, transaction records must be kept for both types of transactions.  Additionally, records may be kept electronically, provided they can be legibly printed.  Considering the law and industry standard, it is a best practice for a brokerage to maintain the following:

1. Listing or Buyer Agency Agreement and any extensions, assignments or terminations
2. Lease agreement
3. Property management agreement
4. Residential Property Disclosure Form
5. Lead Based Paint
6. Affiliated Disclosure Statement
7. MLS worksheet and status change forms
8. Marketing materials
9. Consumer Guide to Agency Relationships
10. Agency Disclosure Statement
11. All Offers, Counteroffers and Addendum
12. Loan approval, loan commitment, request to remedy and inspection reports
13. Appraisal
14. Copy of earnest money check
15. Closing Disclosure
16. Copy of commission checks
17. Termination and/or Mutual Release

In addition, any salesperson should retain all notes, emails or other records kept during the transaction. A brokerage requirement of keeping thorough and complete records is a must best practice.