How long must Delaware real estate firms retain escrow accounting records after a transaction?

Delaware real estate firms are required to retain escrow accounting records for at least three years after a transaction. This requirement is essential as it ensures transparency and accountability in real estate transactions, allowing for potential audits or disputes to be clarified through access to these records.

Retaining these records for three years aligns with best practices in the industry, providing a reasonable timeframe for regulatory oversight, addressing any potential legal matters that might arise, and maintaining proper documentation for tax purposes.

The option of retaining records for merely one year would not adequately meet the needs for oversight and potential disputes that can occur well beyond that timeframe. Similarly, retaining records for five years extends beyond what is stipulated, which could burden firms with unnecessary record-keeping. Finally, the idea of disposing of records immediately after a transaction fails to close would leave firms vulnerable, as it prevents them from having a historical reference for any issues related to that transaction.