Given the varied and multiplying ways real estate professionals can communicate with their clients nowadays, Realtor-backed legislation recently signed into California law may come as a relief to brokers keen on following record retention laws.
Brokers do not have to save texts, instant messages or other electronic messages “of an ephemeral nature” connected with a transaction, according Assembly Bill 2136, which was sponsored by the California Association of Realtors.
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But the law does not specifically mention emails. Therefore, CAR advises Realtors to create a system to store emails with clients that are material to a transaction and relate to licensed activity, if they haven’t already done so — not hard to do since most email programs offer storage at little or no cost.
(The law also does not mention tweets, but CAR seems fairly sure that those fall under “ephemeral.”)
The law technically goes into effect on Jan. 1. But California Bureau of Real Estate Commissioner Wayne Bell has informed CAR that, starting now, the bureau will not require retention of “ephemeral” records referred to in the bill.
In a blog post widely reposted by local Realtor associations, CAR said the need for clarification arose when, in spring 2013, the CalBRE said “texts, emails, tweets, and the like” sent or received by a licensee during negotiations for the sale or purchase of property must be maintained under state record retention requirements — an interpretation described as “too expansive” as well as “impracticable” and “unworkable.”
The legislation also clarified that texts, instant messages and their fleeting brethren are not, in fact, enough to constitute a contract to transfer real estate — unless there is written confirmation that meets certain requirements.
Which records do brokers actually have to keep? In a Q&A, CAR notes that the law requires a broker to maintain copies of “all listings, deposit receipts, 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 broker license is required.”
Additional documents that would need to be retained include leases, offers to purchase, correspondence concerning the transaction, and disclosures made in conjunction with the transaction, CAR said.
Some brokers may also decide that, even though it is not required, they would like to save ephemeral records like text messages in order to track communications their agents have with clients, other agents and other third parties, CAR added.
Records must be kept for a minimum of three years from either the date of closing, or if there is no closing, from the date of the listing.