California Real Estate SalespersonPractice of Real Estate and DisclosuresMedium
A broker's trust account records must be retained for inspection by the DRE for how many years after the closing of the transaction?
- A1 year
- B3 years
- C5 years
- D7 years
Show answer & explanationAnswer & explanation
Correct answer: B. 3 years
California law requires brokers to retain trust fund records, including transaction files, for a minimum of three years from the date of closing or the date of the listing if no transaction closes. This allows the DRE to audit trust account handling during that period.
Why the other options are wrong
- A. One year is too short and does not meet the statutory minimum.
- C. Five years exceeds the statutory requirement.
- D. Seven years is not the standard used for real estate trust records.
Trust Fund Record Retention
Brokers must keep trust fund records and related transaction files for three years for DRE audit purposes.
- Three-year retention period applies from close of escrow or termination of listing
- Applies to trust account ledgers, bank statements, and transaction files
- DRE audits can occur without notice during this period
Memory trick: 'Three years to spare' for trust fund care