Texas brokerage record retention: the eight transaction records TREC requires you to keep for four years

In a brokerage with 20, 50 or 200 agents, transaction files are created by many people, on many devices, across many systems. Contracts may live in a forms platform, disclosures in email, the commission agreement in a shared drive and the key text thread on an agent's phone. Under TREC's rules, the broker is responsible for all of it. Each closed or terminated transaction starts a four-year retention clock, and the file needs to be complete on the day it closes.

The eight records TREC Rule 535.2(h) requires

TREC Rule 535.2(h) says that, except for records destroyed by an "Act of God" such as a natural disaster or fire not intentionally caused by the broker, the broker must, at a minimum, keep the following records for at least four years from the date of closing, termination of the contract, or end of a real estate transaction:

• Disclosures
• Commission agreements, such as listing agreements, buyer representation agreements, or other written agreements relied on to claim compensation
• Substantive communications with parties to the transaction
• Offers, contracts and related addenda
• Receipts and disbursements of compensation for services subject to the Real Estate License Act
• Property management contracts
• Appraisals, broker price opinions and comparative market analyses
• Sponsorship agreements between the broker and sponsored sales agents

The rule also requires these records to be kept "in a format that is readily available to the Commission." For an operations leader, that phrase is the practical test. It is not enough for a document to exist somewhere. The brokerage should be able to find it, for a specific transaction, without asking the agent who handled it.

The items that are easiest to miss

Some of the eight categories are usually collected because they are needed to close. Contracts, addenda and the closing disbursement normally reach the file. Others are more likely to be scattered:

• Substantive communications. Texts, emails and messages with buyers, sellers and other parties often live in an agent's personal accounts. A brokerage policy should say how they reach the file.
• Terminated contracts. The rule's clock starts at termination as well as at closing. Files for deals that fell apart need the same attention as closed ones.
• CMAs and BPOs. Pricing work prepared for a listing appointment is on the list, even when it lives in a separate pricing tool.
• Disclosures delivered early. Documents such as the Information About Brokerage Services notice are given at first substantive communication, often long before a contract exists.

Trust account records follow their own rule

If a broker holds earnest money, security deposits or other money belonging to others, Rule 535.146 adds separate requirements. TREC's FAQ notes that a broker is not required to have a trust account unless the broker agrees to hold money belonging to others or to act as an escrow agent. When a broker does, the rule requires that:

• trust money be deposited in a trust account or delivered to an authorized escrow agent no later than the close of business of the second working day after the broker receives it, unless the principals expressly agree otherwise in writing;
• trust money not be commingled with the broker's personal or other non-trust money, or kept in a personal or business account; and
• the broker keep all documentation about a trust account for four years from the date the document is received or created.

Note the different starting points. Transaction records under 535.2(h) run four years from closing or termination. Trust account documents under 535.146 run four years from when each document is received or created.

Records stay with the broker

Agent turnover is part of operations, and TREC's FAQ explains why files belong to the brokerage. When asked whether a sales agent changing sponsoring brokers can take the buyers they represent, TREC answers no: a buyer representation agreement is a private contract between the buyer and the broker, not the sales agent. The buyer may seek to be released, but the agreement stays with the broker. The same logic supports keeping the full transaction file in brokerage-controlled systems, not in an agent's personal drive.

Policies are part of the requirement

Rule 535.2 also requires a broker who sponsors sales agents, or who is the designated broker of a business entity, to maintain written policies and procedures, on a current basis, to ensure that records are properly kept under subsection (h). For a multi-office brokerage, that policy should answer a few questions in plain terms:

• Where does each of the eight record types go, and in what format?
• Who checks each file for completeness, and when: at contract, at closing or termination, or both?
• How do agent text and email communications reach the file?
• How long are files kept, and who approves deletion after the retention period ends?
• How is a file found quickly if TREC, a client or an E&O carrier asks for it?

Making complete files the default

The most reliable approach is to check a file while it is active, not years later. When each required record is a checklist item on the transaction, with an owner and a due date, missing items are visible while the agent still has them. A file-review step before closing, and again when a contract terminates, can help reduce the number of incomplete files a brokerage carries into its four-year retention period. Reports that show missing items by office and agent also help managing brokers focus coaching where it is needed.

This article is general information, not legal advice. TREC rules change, and other laws, contracts or your E&O carrier may require longer retention. Confirm current requirements with TREC and your counsel. For more guides like this, browse PulseHubCo Insights.