BIC TIP #1226: Three Is the Magic Number

How long do you actually have? In this BIC TIP, Stephen Long explains two rules every North Carolina broker needs to know cold: the record retention rule and the delivery of instruments rule. The easy way to remember both? Three is the magic number.

Keep It for Three Years

Under the record retention rule, brokers must store transaction records for 3 years from the last action on that file. Not three years from the listing date, not three years from the contract, but from the last thing that happened on the file.

That means your filing system needs to be organized enough that you can actually find what you saved. A document you cannot locate is not much better than one you never kept.

Deliver It Within Three Days

The delivery of instruments rule means anyone who signs something gets a copy within 3 days of signing it. Offers, counteroffers, agreements, addenda. If they signed it, they get a copy, promptly.

It does not end at closing. Stephen points out that anytime someone later requests a copy of something, you have 3 days to give it to them.

Real Life Example: Tax Season

Stephen sees this often with closing statements. A client bought a house last year and now wants a copy of their closing disclosure for their taxes. As the broker, you now have 3 days to deliver it. That is the delivery of instruments rule playing out in real life, and it is exactly why your records need to be retained and retrievable.

If you have questions about what your firm keeps and where, check with your broker-in-charge.

The Practical Takeaway

Remember the magic number. Keep records for 3 years from the last action on the file, and deliver copies within 3 days of signing or of a request. Get things where they need to go, and keep them there as long as they need to stay.