Keep It or Toss It? The Balancing Act of Data Retention

BY WILLIAM THOMPSON NJ REALTORS® DIRECTOR OF TECHNOLOGY

As a real estate professional, you’re entrusted with an enormous amount ofpersonal details, from social securitynumbers on rental applications tobank account information in mortgagedocuments, you have an obligation toensure this information is safeguarded.While the best method to guaranteeinformation is protected is to not have itto begin with, there are also regulatorymandates that require you to retaininformation for the protection of your

license, your brokerage, and, above all else, the public trust. There is no one size-fits-all approach when it comes to data retention and it can certainly be a balancing act when deciding whether to destroy old records or keep them “just in case.” However, by simply keeping everything forever you could be opening yourself up to significant legal risk, even with the best of intentions. Be sure to check with your brokerage to review their data retention and information security policies, which will outline the expectations and procedures your brokerage has for you.

QUICK TIP—For more information on safeguarding information, read the May/June issue of New Jersey Realtor® at issuu.com/newjerseyrealtor.

The most obvious benefit of tossing your old records is storage space. Whether we’re talking space in your filing cabinet or your hard drive, neither is unlimited, and gaining more doesn’t come cheap. Just like those old boxes in the attic, now is the time to purge the files no longer required. An even more important benefit than storage space is risk reduction to you and your business. In the unfortunate event of litigation, you’ll go through a period of discovery, which, among other things, you’ll be required to produce documents relevant to the case. The retrieval and organization of these documents can be arduous and expensive, however by consistently following an established policy of data retention you can quickly and confidently pull all relevant files.

One of NJ Realtors® most popular member benefits is zipForm Transactions, which, aside from allowing you to easily fill out and send forms for signature online, is a Transaction Management System (TMS). zipForm Transactions allows you to upload, store, and organize all files relating to a transaction in one secure location and is configured to follow state-specific data retention requirements.

In New Jersey, brokers are required to maintain most transaction-related files for six years from closing, listing expiration, or rental. This includes, but is not limited to: copies of all offers, contracts of sale, listing agreements, leases, and property management agreements; copies of all bills paid for owners, sellers, buyers, or tenants; copies of all receipts and notices issued for security deposits. In this digital age, communications are received in so many ways, however I suggest uploading a copy of all communications, no matter how it was received, to your TMS ensuring it’s stored and destroyed according to your retention policy.

For more information on managing business records, visit nar.realtor/ videos/window-to-the-law and for more information on data security visit nar.realtor/technology and read NAR’s Data Security & Privacy Toolkit.