Real Estate Education Blog

Blogs Karen's Blog ADRE Issues Commissioner's Advisory

Posted Sep 18, 2009 10:48 pm (11 years ago)

RSS Subscribe to RSS feed

The Arizona Department of Real Estate today released a Commissioner’s Advisory regarding Electronic Record Keeping and Electronic Signatures today. 
The following rules apply for Electronic Record Keeping:
1.      There are certain records that Designated Brokers are required, by statute to maintain. If kept electronically, these transaction and employment records must be backed up (duplicated and stored in a secure, offsite location) in a manner allowing restoration in the event the electronic data is destroyed.
2.      In the event of an ADRE audit, inspection, investigation or request by the commissioner, electronically stored records must be reproducible, at the broker’s expense, in legible, written form (“hard copy”).
3.      The electronic records must be exact duplicates of the original.
4.      The electronically stored records must be legible.
5.      The Broker must maintain each real estate purchase contract or lease agreement and the electronic transaction folder in which it is kept in a chronological log or other chronologically systematic manner that is easily accessible by the Commissioner or the Commissioner’s representatives.
6.      If the broker’s electronic records are not stored at the broker’s licensed business location, the broker must inform the Commissioner in writing of the legal address of the entity responsible for storing such records.  The entity storing the broker’s records may be required to show evidence of meeting requirement (1) above.
7.      All brokers utilizing an electronic record storage system solely (in lieu of hard copy document storage) must sign a user agreement with the Arizona Department of Real Estate that allows unlimited Department access.  The electronic records must be maintained for the required timeframes for file storage.
The following rules apply for Electronic Signatures:
1.      The broker’s statutory review of contracts and agreements maintained electronically must be recorded through a dated secure electronic signature complying with  ARS § 44-7031, and the system must be able to demonstrate that when the signature was made, the signature was:
a.      Unique to the person using it;
b.      Capable of verification;
c.      Under the sole control of the person using it;
d.      Linked to the electronic record it relates to in such a manner that if the record were changed the electronic signature would be invalidated;
e.      Electronic review of any document is permitted in lieu of actual initials on a document, providing that such electronic review is recorded in an unalterable history or log file.
2.      The broker must enforce a written supervision policy requiring personal computer security that, at a minimum, requires each person with electronic signature authority and capability to lock or sign off his/her computer every time he/she walks away from the computer.
3.      The broker must have a back-up system defining how and when contracts and agreements are reviewed when the computers are down for an extended time.
4.      The system must have the ability to create a secure history log of all activity for electronic signatures or broker review which can be reviewed by Department auditors and investigators.
Those of us in the real estate industry appreciate the technology advancements made by the Department of Real Estate. Electronic systems are more efficient and promote environmentally friendlier office practices.