In the world of professional ship and yacht brokerage, recordkeeping is not just good business practice—it is a legal requirement.
Brokers are subject to state laws that dictate how long they must retain business documents, and these requirements vary from state to state. Understanding and complying with these retention rules is critical, both to remain in good standing with licensing authorities and to be able to respond effectively in the event of an audit, investigation, or dispute.
In Florida, licensed ship and yacht brokers must generally retain all books, accounts, documents, files, and information necessary to determine compliance with Chapter 326 of the Florida Statutes and related rules for a period of five years. This requirement ensures that regulators and enforcement agencies can review transaction histories and other key records long after the initial deal has closed.
New York takes a similar approach. Licensed brokers in that state are also required to maintain their business records for a minimum of five years. This period is designed to cover the statute of limitations for many types of legal claims and to ensure compliance with state oversight requirements.
California, on the other hand, has a shorter requirement. Under Harbors and Navigation Code section 735.1, licensed yacht and ship brokers in California must retain business records for four years. While the period is shorter than Florida and New York, it still obligates brokers to maintain a clear and organized archive of their transaction files, contracts, accounting records, and other relevant materials.
In Washington State, the requirement is only 3 years. This reduced document retention policy reduces expense on the licensees which in theory could increase profits and as a consequence reduce transaction friction economically.
For brokers licensed in multiple states, these differences mean that the safest approach is often to default to the longest required retention period. In practical terms, that means maintaining all relevant records for at least five years, regardless of the jurisdiction in which a specific transaction took place. This approach not only ensures compliance with all relevant laws but also provides a longer window for protecting your interests if questions or disputes arise later.
In all cases, brokers should maintain their records in a way that allows quick and complete retrieval. Whether you choose to store documents physically, digitally, or both, your system should be organized, backed up, and secure from loss or unauthorized access.
The bottom line is clear: where you are licensed matters, and so does how you manage your business records. Staying informed about the specific requirements in your jurisdiction—and erring on the side of caution—will help you stay compliant and protect your professional reputation.