New law clarifies what constitutes a “record.”
Assembly Bill 2136, signed by the Governor July 9, 2014, and effective January 1, 2015, will help clarify a REALTOR’S® record retention obligations when it comes to electronic communications. In their Spring 2013 Real Estate Bulletin, the Bureau of Real Estate set in motion a need for clarification when they took the position that “texts, emails, tweets, and the like” sent or received by a licensee during the negotiation for the sale or purchase of property must be maintained under the record retention requirements of Business and Professions Code Section 10148.
Many stated that this interpretation of a “record” was too expansive and, furthermore, maintaining all such electronic communications would be impracticable and unworkable. Seeking clarification, the CALIFORNIA ASSOCIATION OF REALTORS® sponsored legislation to provide guidance in this new and rapidly changing area of interpersonal communications. AB 2136 amends both Business and Professions Code Section 10148 (broker record retention requirements) and Civil Code Section 1624 (the Statute of Frauds – controlling which contracts must be in writing to be enforceable). Added to Section 1624 is a provision that “an electronic message of an ephemeral nature that is not designed to be retained or create a permanent record, including, but not limited to a text or instant message . . . is insufficient to constitute a contract to convey real property. . .” (If the principals do send texts or tweets that they intend to be part of a real estate contract, there are additional steps that need to be taken under Section 1624. See the Q&A below for details.) Added to Section 10148 is a provision that “[t]his subdivision shall not be construed to require a licensed real estate broker to retain electronic messages of an ephemeral nature, as described in subdivision (d) of Section 1624 of the Civil Code.”
This will give some welcome relief from the possibility of having to save all “ephemeral” electronic communications such as tweets and texts. However, emails are not mentioned in Section 1624. Accordingly, REALTORS® who are not already saving emails with clients that are material to a transaction and relate to licensed activity should create a system to store them. In addition, Commissioner Wayne Bell of CalBRE has informed C.A.R. that in light of the new law, they will not be requiring retention of “ephemeral” records referred to in the bill, effective now, even though the law does not technically come into effect until January 1 of 2015. The C.A.R. Q&A CalBRE Record Retention Requirements discusses this issue as well as other record retention issues in detail.