Do rejected offers need to be retained for three years?

QUESTION: If a buyer’s agent submits an offer to a listing agent, and that offer is rejected by the seller, does Rule 58A .0108 of North Carolina’s license law require both the buyer’s agent and the listing agent to keep a copy of the rejected offer for three years?

ANSWER: Under the North Carolina Real Estate Commission’s interpretation of the rule, the answer is, “yes.”

Rule .0108 provides in part that brokers “shall retain records of all sales, rental, and other transactions conducted in such capacity, whether the transaction is pending, completed, or terminated.” These records must be kept for three years “after all funds held by the broker in connection with the transaction have been disbursed to the proper party or parties or the conclusion of the transaction, whichever occurs later.” If the broker’s agency agreement is terminated prior to the transaction’s completion, “the broker shall retain such records for three years after the termination of the agency agreement or the disbursement of all funds held by or paid to the broker in connection with the transaction, whichever occurs later.”

Subsection (b) of the same rule specifically says that “offers to purchase” are included within the definition of “records” that should be preserved. Brokers should note that preserved records should be available for inspection by the Commission at any time within the three-year period. Any rejected offers should also be provided to the broker’s affiliated firm or sole proprietorship within three days of receipt as required by subsection (d) of Rule .0108.