A Georgia real estate broker must keep sales contracts and related transaction records for at least three years. Rule 520-1-.10 of the Georgia Administrative Code sets that floor for signed purchase agreements, brokerage engagements, closing statements, leases, and any other documents tied to the transaction.1Legal Information Institute. Georgia Comp. R. and Regs. R. 520-1-.10 – Handling Real Estate Transactions Three years is the baseline you answer to GREC with. It is not always the number you should actually plan around, because trust-account rules, federal tax windows, and certain investigation exceptions can reach further back.
What the Three Years Covers
Rule 520-1-.10 names four document types directly: sales contracts, brokerage engagements, closing statements, and leases. It then adds a catch-all for “other documents related to a real estate transaction required by law.”1Legal Information Institute. Georgia Comp. R. and Regs. R. 520-1-.10 – Handling Real Estate Transactions For a sales contract specifically, the file you retain should include the signed purchase and sale agreement along with every addendum, amendment, and counteroffer attached to it. Correspondence that shaped the negotiation — emails, letters, texts carrying instructions or decisions — fits inside the catch-all and belongs in the same file, because those are exactly the records that answer questions when a dispute surfaces later.
The retention duty applies to three groups of brokers:
- Brokers named in the sales contract, brokerage engagement, closing statement, lease, or other transaction document.
- Brokerage firms that participated in negotiations involving those documents.
- Brokers required under O.C.G.A. 43-40-20 to maintain a trust account.
If you sit in more than one of those categories on a single deal, one complete transaction file still satisfies the rule.1Legal Information Institute. Georgia Comp. R. and Regs. R. 520-1-.10 – Handling Real Estate Transactions
When the Three-Year Clock Starts
The rule does not spell out a triggering event. It ties retention to the documents themselves rather than naming a specific start date. The careful practice is to count three years from the latest meaningful date on the file, whether that is the closing, the expiration of a listing, or the date a contract fell apart. A deal that never closed still generated a sales contract, and that contract is still subject to the rule.
Why Three Years Is Often a Floor, Not a Target
GREC Investigation Exceptions
GREC can open an investigation on its own or in response to a sworn written complaint. Under O.C.G.A. 43-40-27, the Commission generally cannot investigate conduct that occurred more than three years before the investigation begins. That is the mirror image of the three-year retention rule: if GREC comes within the window and your file is already gone, you have a serious problem.2Justia. Georgia Code 43-40-27 – Investigation of Complaints
The three-year limitation has exceptions that matter. Allegations of fraud, mishandling of fiduciary funds, and violations arising out of court litigation carry no time limit for GREC to begin investigating.2Justia. Georgia Code 43-40-27 – Investigation of Complaints If a sales contract from four or five years ago becomes the subject of a fraud allegation, GREC can still ask for the file. Investigators authorized by the Commission can examine any documents related to an investigation, and the commissioner can issue subpoenas when brokers do not cooperate.
IRS Record Retention
Federal tax rules run on their own clock. The IRS generally wants records kept until the statute of limitations for the related return expires, which is typically three years from when you filed. Several situations stretch that:
- Underreporting income by more than 25% extends the IRS window to six years.
- Claiming a loss from worthless securities or bad debt extends it to seven years.
- Never filing or filing a fraudulent return carries no time limit at all.
- Employment tax records should be kept at least four years after the tax becomes due or is paid, whichever is later.
- Records tied to property your brokerage owns, including depreciation, should be kept at least three years after you dispose of the property.3Internal Revenue Service. How Long Should I Keep Records?
A sales contract itself is not a tax return, but the commission income it generated is. A blanket three-year shredding policy satisfies GREC and can still leave you exposed to the IRS. Many brokerages set a default retention period of six or seven years to cover the overlap.
Trust Account Records
If you accept earnest money, security deposits, rents, or other trust funds, O.C.G.A. 43-40-20 requires a separate, federally insured trust or escrow account at a Georgia financial institution, registered with GREC and subject to examination at any time with reasonable cause.4Justia. Georgia Code 43-40-20 – Trust Accounts
Rule 520-1-.08 layers a specific retention duty on top of the general three-year rule. Brokers must reconcile their trust accounts in writing at least monthly, comparing total trust liabilities against the reconciled bank balance. Each reconciliation must include the date, the financial institution’s name, account numbers, balances, deposits in transit, outstanding checks identified by date and number, and an itemized breakdown of funds not yet disbursed. Copies of those monthly reconciliations must be kept for three years.5Georgia Secretary of State. Chapter 520-1 Licensure and Brokerage – Rule 520-1-.08
When numbers do not match, the reconciliation must explain why and describe the corrective action. The same disclosure is required whenever a check bounces against the trust account or the balance goes negative. GREC examines every broker’s trust account during each renewal period, so trust records draw scrutiny on a predictable cycle.4Justia. Georgia Code 43-40-20 – Trust Accounts And because mishandling of fiduciary funds is one of the exceptions to the three-year investigation limit, trust records realistically need to survive longer than the stated three years.
Electronic Storage and Secure Disposal
Georgia does not require paper. Rule 520-1-.10 permits brokers to store required records in any system using paper, film, electronic media, or other formats, provided two conditions are met: you can produce true and correct copies, and you can make those copies available to an authorized GREC representative on reasonable request and at reasonable cost.6Georgia Secretary of State. Chapter 520-1 Licensure and Brokerage – Rule 520-1-.10 Cloud document management systems satisfy both conditions for most brokerages. Scanned contracts work; blurry phone photos invite trouble. Verify that backup and recovery actually function, because a system you cannot retrieve from during a GREC inquiry does not satisfy the rule.
Disposal matters too. Real estate brokerages that handle nonpublic personal information fall under the FTC’s Safeguards Rule, which requires a written information security program covering administrative, technical, and physical safeguards for customer information.7Federal Trade Commission. FTC Safeguards Rule: What Your Business Needs to Know That program governs how documents are destroyed when retention periods end. Dropping closing statements that contain Social Security numbers and bank account details into an office recycling bin does not meet the standard.
What Happens If the File Is Gone
GREC treats missing or poorly maintained records as violations of commission rules, enforceable with the same tools used for fraud or misrepresentation. Under O.C.G.A. 43-40-25, sanctions can include reprimand, fines of up to $1,000 per violation with a $5,000 cap per disciplinary proceeding, reimbursement of the Commission’s costs, mandatory education, required CPA accounting on your trust account, license suspension, license revocation, or a downgrade from broker to salesperson. GREC can also refuse to renew a license, so a compliance failure can follow you past the proceeding that produced it.8Justia. Georgia Code 43-40-25 – Violations by Licensees, Schools, and Instructors; Sanctions; Unfair Trade Practices
The fines are modest on paper. The suspension, revocation, or non-renewal that can accompany them is not. Keeping sales contracts for three years is the rule you must meet; keeping them longer, in a system you can actually retrieve from, is the practice that protects your license.