Window to the Law: Managing Business Records Efficiently

Window to the Law: Managing Business Records Efficiently

May 19, 2022
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A document retention policy can keep your business in compliance with legal requirements, create economic efficiencies, and better prepare your business in the event of litigation. Learn why every real estate professional needs a document retention policy, and how to create one for your business.

Welcome! I am Maame Nyamekye, Staff Attorney at the National Association of REALTORS®. As springtime approaches, spring cleaning may be on your mind and your business’ document retention policies should be at the top of your list. In this episode, I will share how and why your office should address document retention as an important risk management tool in your day-to-day business operations.

Establishing and adhering to a document retention policy is a best practice, which will not only keep your business in compliance with affirmative legal requirements to retain certain documents for a specified period of time, it will also create economic efficiencies with the storage and search of electronic and other documents, and better prepare your business in the event of litigation.

So, how do you create a record retention policy? First, understand that a record retention policy pertains to “business records” which are records that have operational, legal, fiscal, or historical value to the business and may be in physical or electronic format. 
First, designate a team to oversee the implementation and ongoing compliance with your business’ document retention policy, and be sure to include individuals familiar with the business’ electronic information and storage.

The team should identify what policies (if any) currently govern record retention and evaluate the policies for adequacy and relevance.  The team should work with other individuals in the business to inform and set appropriate retention periods for business records.
Next, create or update your document retention policy. In general, the policy should state the policy’s effective date and date of last review, individuals responsible for the policy, and its purpose. Remember, legal requirements will establish the time frames for maintaining certain records.  For records not subject to a required retention period, your business should set policies that best reflect the business’ needs. 

Consider having legal counsel review the policy to confirm compliance with relevant laws, such as employment, tax, and state license laws that require specific retention periods for documents.

Adopt and distribute the policy. Remember, it’s not only important to create the record policy, but it’s equally important to make sure that the policy is consistently followed.
And, be sure to periodically review the policy to be sure the policy remains responsive to your business and the present times.

Finally, remember, in the event of pending or anticipated litigation, your business may be required to suspend certain aspects of its document retention policy.  However, adhering to your policy on an ongoing basis will not only make discovery more efficient and potentially less expensive, it will also prevent accusations of improper destruction of documents by adverse parties.  For more information on record retention, check out these useful resources listed below. Thank you for watching this episode of Window to the Law.

Additional Resources

See Also...

"How long should I keep records?" - an IRS resource

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