CALIFORNIA AGENTS NEED NOT KEEP EPHEMERAL DOCUMENTS. WOW!
Both the real estate law and good risk management practices require that brokerages maintain records of contracts, documents, inspections, reports, requests, demands, etc. that are generated during the course of a real estate transaction. While there may be a core list of items that just about every company requires, organizations will differ with respect to various particulars.
Not long ago the California Bureau of Real Estate introduced a generally unwelcome concept into the mix. As we have noted before (Record Keeping In The Digital Age Is Not Just A Technological Issue), the Bureau put forward an interpretation that the law (Business and Professions Code 10148) which requires retention of all documents obtained by an agent "in connection with" a real estate transaction includes all electronic documents. Not just emails; but texts, tweets, and probably even posts.
This interpretation did not sit well with members of the California Association of REALTORS (CAR). If implemented, it would have required a good deal more time and effort to compile a compliant file. Hence, the CAR Board of Directors authorized a motion that CAR "sponsor legislation to prohibit short-lived communication like tweets or text messages from being considered 'transactional documents' that must be retained in a broker's file."
That legislative effort has been successful. Assembly Bill 2136 (Daly) passed both houses and was signed into law by the Governor on July 9, 2014. AB 2136 amends both Business and Professions Code 10148 and also Civil Code 1624 (Statute of Frauds, which controls which contracts must be in writing). It adds to 10148 that "this subdivision shall not be construed to require a licensed real estate broker to retain electronic messages of an ephemeral nature..."(as described in 1624).
This piece of legislation had no registered opposition. It sailed through both houses without a single 'no' vote in either committee or on the floor. Tellingly, the authors of the legislative bill analyses found it necessary to explain that ephemeral means "short-lived", and/or they put the word in scare quotes throughout their analyses. One just has to wonder how many legislators who voted for this bill know what "ephemeral" means. But I digress.
The legislation unfortunately focuses on the form of a communication rather than its content. Moreover, the legislation's sponsors, as did the analysts, seem to take for granted that text messages are unlikely ever to be the vehicles of serious conversations about serious topics.
Yes, it is unreasonable to say that all text messages should be retained. But, it is equally unreasonable to suggest that none of them should be.
For many years it has been (and still is) considered a good risk management practice to keep logs of telephone conversations. Nowadays, for a sizeable portion of the population, text messages have replaced phone conversations. Thus the advice of a CAR legal department (recently updated) Q&A is apt.
Q 4. Are there reasons a licensee might want to maintain "ephemeral" text or instant messages?
Article courtesy of Property ID Corporation Natural Hazard Disclosure California Company and Carlos Siderman President at Property ID