Records...HOW LONG IS LONG
Copyright 2000-2011 Landlord.com
QUESTION: How long do I need to keep my rent landlord business records?
The prudent landlord maintains files on each of his rental units,
documenting the occupants, rent payment records, maintenance performed, the lease
agreement, rejected applications and and everything else which pertains to this unit over
its history. The question invariably arises as to how far back these records must be
maintained and when they may safely be destroyed.
The records are kept in the fear of litigation. Without that fear,
there would be no reason to keep them. A ledger card would suffice. For this reason, the
typical advice is that they may be destroyed at the point of expiration of statutes of
limitations on civil and criminal legal actions, typically three to five years, sometimes
longer, but not usually. In reality, this is fallacious. Whoever doubts this statement
should, at the next cocktail party he attends with a lawyer present, ask the attorney the
following question: "What is meant by attorneys pleading around the
statute of limitations?" The answer may be surprising, but it will certainly be
If a landlord were to show me a statute of limitations of three years,
I could draft a pleading which would permit filing of suit at four. If he showed me one
which expired in five years, I could extend it to six. And so on.
In the case of minors, the statute of limitations usually does not even
begin to run until they reach the age of majority, typically 18, but sometimes 21. Does
this matter? Of course. Imagine that a five year old girl occupying the landlords
building is sexually molested by a registered sex offender renting a unit in a building
owned by someone else down the street. The girl tells no one, represses the memory, and
she and her parents move out. Four years after that the landlord destroys all his records
of the tenancy, including the rental agreement, relying on the four year statute of
limitations on lawsuits based on written contracts and the one year statute of limitations
on personal injury actions. Nine years after that the girl, at age 18 (majority), assisted
by hypnotic retrogression, files suit, naming you for failure to make the necessary
disclosure under Megans Law. Can she do it? Yes. Can the landlord produce a copy of
the rental agreement showing the necessary Megans Law disclosure? No, he destroyed
it relying on the statute of limitations.
The landlord is the business man. He is expected to maintain important
records. The tenant is the defenseless consumer. As between landlord and tenant, if
records are missing, the landlord loses.
Part of the impulse to destroy records, something which is a fairly
recent fashion, is to emulate big companies. There may be sound reasons for General Motors
to destroy records of $.39 transactions after the passage of a long period of time. There
is no such justification for the small business man who does not produce the volume of
records that the big companies do. Destruction of records is often a prestige point, as
in, "I am so successful that I have to destroy all my records after three years,
otherwise, there would be so many of them I would not know where to put them."
This is never a justification. A tenant file is part of an information
retrieval system. It is not necessary to keep the extra four copies of the rental
agreement the word processor printed out, the extra legal pads and McDonalds napkins which
somehow found their way into the file can be eliminated. What is left are the operative
documents, the rental agreement, the correspondence, the rent increase notices, everything
which the parties acted upon. We guarantee that the sum total of these will rarely occupy
more than one quarter of one inch of shelf space. This small amount of information should
be retained so that it can be retrieved in perpetuity.
Surely, this much space can be found somewhere. Store them in manila
envelopes labeled with names and dates and protected in bankers boxes. You might not care
much that you did, but your heirs might later on.