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Do email and text messages need to be part of your transaction file?

posted Sep 15, 2018, 5:18 AM by Brian G. Walsh   [ updated Sep 15, 2018, 5:18 AM ]
Sep 10, 2018

By Peg Ritenour, Ohio REALTORS Vice President of Legal Services/Administration

Communications with clients, REALTORS and other professionals are routinely conducted via email and text messaging. And it’s not just simple messages like setting up appointments or scheduling showings. Agents are engaging in contract negotiations, communicating material information, and making disclosures via text. Often those emails and text messages contain important information and establish a timeline that may be relevant in the event a lawsuit or complaint with the Division is filed against you. And moreover, the Ohio Division of Real Estate and Professional Licensing considers your license law responsibility to maintain records to include emails and text messages that are related to a transaction.

Section 4735.18 of the Ohio Revised Code outlines the conduct for which a licensee can be disciplined by the Ohio Real Estate Commission. Among these is “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, and any records of receipts and disbursements of all funds received by him as broker and incident to his transactions as such, 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 interprets this section very broadly to include a duty to maintain emails and text messages relative to a transaction or even a potential transaction. Therefore to avoid possible disciplinary action, including a license suspension, it is important for licensees to maintain these in their file for the mandatory three year period.

Another issue that arises with respect to record keeping is the question of who is obligated to maintain the complete record of the transaction -- the agent involved in the sale or lease or the agent’s broker? According to the Division the answer is both. Under Ohio license law the Division considers record keeping to be a duty that is imposed on the broker, as well as the agent. Therefore while a salesperson may have the complete record of a transaction, it is equally important for the brokerage to maintain these documents as well. In some instances the agent may leave the brokerage and take their records with them, leaving the broker with incomplete files on the agent’s transactions.  This can put the broker in non-compliance and at risk of disciplinary action by the Division.

It is also important to note that the license law does  not mandate that original documents be maintained by either the agent or broker. Copies are sufficient. Moreover, the Division does permit records to be maintained electronically, as long as they can be produced in an accurate and legible form in the event of an audit or investigation.

As mentioned above, the license law imposes a three year record retention period. However in some instances, licensees may want to retain certain records for longer. More information on this issue can be found in the legal section of ohiorealtors.org

Legal articles provided in the Ohio REALTORS Buzz are intended to provide broad, general information about the law and is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.