Retention of Transaction Records
Question: I am a licensed real estate broker and would like to know what documents are required to be kept by my brokerage for rental and sale transactions? How long should they be kept for and in what format?
Answer: New York State Real Estate License Law §175.23 “Records of transactions to be maintained” states that records for the sale of a home or residence (1-4 family building, condo unit or co-op apartment) should be kept for three years in either hardcopy or digital format. “Records to be kept and maintained shall contain,
(1) the names and addresses of the seller and the buyer, (2) the broker prepared purchase contract or binder, or if the purchase contract is not prepared by the broker, then the purchase price and the amount of deposit (if collected by broker), (3) the amount of commission paid to broker, (4) the gross profit realized by the broker if purchased by him or her for resale, (5) any document required under Article 12-A of the Real Property Law and (6) the listing agreement or commission agreement or buyer-broker agreement.”
If a broker is not provided a copy of the documents required to be maintained by New York State law, the broker will not be found in violation of the law for not being in possession of such records. In order to be sure you are compliant with the law, we recommend that you simply scan in all documents and retain them digitally for an indefinite period.
Important Tip: The Regulation does not apply to leasing transactions (due, in our opinion, to an omission when the Regulation was drafted). However, it is recommended that, in connection with leasing transactions, brokers always keep a record of (i) the names and addresses of the landlord and tenant, (ii) the terms of the transaction, including the rental amount and the term, (iii) the amount of commission paid to the real estate broker, (iv) the listing agreement, fee agreement or representation agreement and (vi) a copy of the lease including additional riders. The obligation to maintain a copy of the Agency Disclosure Form for leasing transactions is required under Section 443.