Tennessee Realtor State Practice Exam

How many years is Madge's firm required to keep records of the escrow/trustee accounts it had prior to obtaining the waiver?

1. One year

2. Two years

3. Three years

4. Five years

The correct answer is: Three years

The correct answer is three years because Tennessee real estate regulations require that escrow and trustee account records be maintained for a minimum of three years. This requirement ensures that there is sufficient documentation available for any potential audits or investigations that might arise concerning the handling of funds. Keeping records for this duration aids in transparency and accountability within the real estate industry, thereby protecting both agents and clients. In contrast, options such as one year, two years, or five years do not align with the established rules for record retention in Tennessee. One and two years are both too short to capture the necessary historical data that may be required, while five years exceeds the mandated minimum and suggests an unnecessary retention period under the current regulations. Therefore, understanding the three-year requirement is essential for compliance and effective business practices in the real estate sector.