Under existing law, a broker must retain for three years copies of all listings, deposit slips, canceled checks, trust records, and other documents executed by him or her or obtained by him or her in connection with any transactions for which a real estate license is required. Effective January 1, 2015, electronic messages of an “ephemeral nature” such as text messages, instant messages, and tweets (unless designed to be retained or to create a permanent record) are excluded from this record retention requirement. The new law, however, does not clearly exclude emails from record retention requirements. Therefore, emails sent and received in connection with a transaction should still be retained. AB 2136 (codified as Business and Professions Code §10148 and Civil Code §1624) (effective January, 2015).
A broker who fails to retain transaction records for a period of three years may be cited by the Bureau of Real Estate and subject to formal legal action. You should review the record retention policies for your office to make sure you are in compliance with this code section.
If you are a real estate agent or broker and have a legal question, contact one of our Los Angeles Real Estate Attorneys for a free case evaluation and consultation.