A:
For purposes of a DRE audit, REALTORS® must keep copies of transaction files for three years. Such documents include all listings, purchase contracts, deposit receipts, canceled checks, trust records, and other documents signed or received by the broker or salesperson in connection with any transactions for which a real estate broker license is required. The retention period runs from the date of the closing of the transaction or from the date of the listing if the transaction is never closes or is cancelled. (Cal. Bus. & Prof. Code §10148.)
However, litigation involving a transaction may occur years in the future. Since the statute of limitations may vary depending on the cause of action, it may be prudent to retain records in some space-saving electronic format for longer than three years. For example, the statute of limitations for latent construction defects is ten years.
