We continue with our blog series on Real Estate Records Retention, this time focusing on the Yellowhammer state.  Chapter 27 of the Code of Alabama establishes creation of a Real Estate Commission, and stipulates the rules and regulations governing Real Estate Brokers and related transactions in the Heart of Dixie.  Therein, the Records Disposition Authority, Section 3, states that Real Property Files and Inventory Lists are deemed Permanent Records; this means they cannot be destroyed.  It also states that these permanent records are to be retained in office, “in an environment that will ensure their physical order and preservation”.

With the lines between different financial institutions blurring more each year, the Alabama Department of Banking has also addressed records retention for real estate transactions.  They require  loan files, as well as real estate owned and repossessed assets files (including supporting documentation and records)  be retained for life plus three years. Ouch!  The Better Business Bureau of North Alabama has come to the rescue and compiled a “when to shred” list which business owners as well as consumers should keep handy.   According to the BBB, contracts, mortgages, notes, and deeds still in effect should be kept permanently, i.e. Do Not Shred!, while those that have expired, can be shredded after seven years.

Life plus three years is definitely a long time to keep any document, much less keep it in good condition.   Companies sometimes change their physical address.  Often older records are boxed and sent to storage warehouses where conditions are not prime.   The good news is that you can easily back-up and access your files online using today’s technology at a fraction of the cost.  When it comes to record retention strategies for regulated industries, like Real Estate, Filetwin can be your best ally.  Call us today and speak to one of our back-up specialists at 877-310-2884.

In these times of Foreclosure Frenzy, don’t be caught off guard without the ability to access your past real estate and mortgage transactions.   We are focusing today on Virginia, a state close to the nation’s capitol where the Financial crisis is being addressed.  Real Estate transactions in Virginia are governed by the Department of Professional and Occupational Regulations, which has created a Real Estate Board for this purpose.   In the Commonwealth of Virginia, a Real Estate Broker must maintain records of all transactions in his/her office  for at least three years .  These records, according to the Virginia State Legislature, may be in electronic format.  However, Real Estate Appraisers in the Old Dominion state are subject to more stringent requirements, and must keep all records for at least five years after preparation, and another two years after final disposition.  For more details you can call the Virginia Real Estate Board at (804) 367-8526 or email them at Board for Real Estate.

Three to seven years is a long time to keep paper files of transactions, or disks of data that may not be appropriately labeled.  With all the foreclosed homes coming to market, it’s important to have a history of those properties in your database, in the event of any future investigation by banks, mortgage companies or government agencies.  Electronic data back-up is the safest and most reliable way to keep important date for later online access.   Online data back-up and access systems like Filetwin, are highly recommended for regulated industries like Real Estate.  Call us today and speak to one of our back-up specialists at 877-310.2884.  Filetwin, because you need two.

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If you’re a real estate broker in the Sunflower State, then you are required to retain your records for a period of three (3) years according to the Kansas Real Estate Commission. Here is a link to administrative regulation 86-3-10 so you can verify so you can verify for yourself.

Here are some guidelines for electronic storage of documents for a real estate broker in Kansas:

Transaction Files
Each transaction file whether PENDING, CLOSED, FAILED, or CANCELED must be indexed and each file should contain all of the following records IF APPLICABLE to the transaction to be in compliance with K.A.R. 86-3-10.

• agency agreement with seller
• agency agreement with buyer
• transaction broker addendum
• transaction brokerage agreement
• offers, counteroffers
• contract, including all amendments, and addenda
• lot reservation agreement
• commercial lease
• option
• receipt for purchase agreement and earnest money
• closing statements
• authorization to disburse earnest money on transaction which did not close
• any other record generated in connection with the transaction (this would include phone notes, e-mails, inspection reports, estimated closing costs, correspondence, surveys, appraisals, title reports, and any documentation generated during the transaction.)

Trust Account Records (if applicable)
A complete record of all monies received or escrowed on real estate transactions must be maintained:

• deposit slips showing transaction number, date of deposit, amount and where deposited
• monthly trust account bank statement, canceled checks and deposit slips
• a check register which shows the chronological sequence in which funds are received and disbursed
  • for funds received: date of deposit, transaction number, amount
  • for disbursement: date, transaction number, payee, amount
  • the current balance
• a ledger for each transaction, including:
  • names of principals
  • property address
  • transaction number
  • amount
  • date of each deposit
  • check number
  • date of check
  • payee
  • amount of each disbursement
  • the current balance
• a ledger for broker’s funds, if applicable

1. Records would need to be scanned into a system by indexing each with a TIN and client or customer name. If you save your files with the TIN as the filename, you’ve satisfied this point.

2. The system would need to allow the auditor or investigator to be able to retrieve the documents and also have the ability to print the documents. This is no problem for Filetwin because you’d just open the files from your backup folder set.

3. This software must be updated periodically so that records are always readable. Filetwin handles this requirement for you.

4. The system should be in a format that once scanned documents may not be altered at a later time. Once documents are backed up, they cannot be edited in any shape or form.

Hopefully, this information helps and if you’d like to continue this conversation in person, please give us a call at  1877-310-2884.

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