The correct answer is C, Three years. Massachusetts professional-practice rules impose recordkeeping requirements on brokers relating to transactions and funds handled for consumers.
Proper records are essential because the broker must be able to demonstrate where money was deposited, when it was received, how it was distributed, and the basis for each transaction. Records can include escrow-account documentation, transaction information, deposit records, ledgers, checks, statements, and other materials required by applicable regulation.
Record retention serves both consumer protection and regulatory oversight. If a dispute or Board investigation occurs, reliable contemporaneous records provide evidence regarding the broker ' s handling of funds and compliance with fiduciary/accounting responsibilities.
Recordkeeping should also be distinguished from the requirement to segregate trust money. Retaining records for the required period does not cure improper commingling or conversion.
Brokerages may choose to retain certain documents longer than the regulatory minimum where tax, litigation, insurance, contractual, or business considerations justify longer retention.
Study Guide Reference: Massachusetts License Law — 254 CMR Professional Standards; Brokerage and Escrow Recordkeeping.
