32-2175

32-2175. Property management records;
requirements; audits

A. Property management firms shall keep a residential rental agreement and related
residential rental agreement documents for one year from the expiration of the rental
agreement or until the rental agreement and related documents are given to the owner at
the termination of any property management agreement. The records shall be kept at the
broker's main office or at an off-site storage location in this state if the broker
provides prior written notification of the street address of the off-site storage
location to the department.

B. Property management firms shall keep records of all finder fees that are paid to
tenants for three years after the payment is made or until the records are given to the
owner at the termination of the property management agreement. Records shall be kept at
the broker's main office or at an off-site storage location in this state if the broker
provides prior written notification of the street address of the off-site storage
location to the department.

C. Property management firms shall keep all financial records pertaining to clients
for at least three years from the date each document was executed, including bank
statements, canceled checks or bank generated check images, deposit slips, bank receipts,
receipts and disbursement journals, owner statements, client ledgers and applicable
bills, invoices and statements.

D. Only the designated broker or the broker's authorized real estate licensee, on
behalf of the broker, may sign nonresidential rental agreements. The broker shall execute
in writing and shall file any delegation of authority in the broker's employee
file. Fully executed residential lease agreements are not required to be reviewed and
initialed.

E. The property management firms shall consecutively number or file all signed
property management agreements in compliance with a system that is orderly, easily
accessible by the commissioner or the commissioner's representative and consistent with
generally accepted professional standards of the industry for that type of real estate.

F. Property management firms shall maintain each nonresidential real estate lease
agreement and the transaction folder in which it is kept in a chronological log or other
systematic manner that is easily accessible by the commissioner or the commissioner's
representatives. For nonresidential lease transactions, transaction folders shall
contain:

1. Confirmation that the deposits or other monies that were handled by or through
the broker were handled according to instructions given by or agreed on by the parties to
the transaction.

2. A complete copy of the nonresidential lease or rental agreement.

3. If applicable, a copy of the listing agreement.

G. Property management firms shall number on-site residential rental transaction
folders according to dwelling unit number or other systematic manner that is easily
accessible by the commissioner or the commissioner's representative. A broker is not
required to maintain duplicate residential rental transaction folders.

H. On request by the commissioner or the commissioner's representatives for routine
audit purposes the broker shall make available within a reasonable amount of time all
records relative to property management accounts, including lease agreements, lease
related documents and trust account records. The department is limited to auditing those
areas that are related to the business activities of a broker and that have a material
bearing on the accuracy of the audit. This subsection shall not limit the immediacy or
scope of an audit if a violation of real estate statutes or rules is suspected.