FACTS: The real estate broker stores its documents in the cloud pursuant to an agreement with a vendor.  The broker does not know the actual physical address of where the server is located.  In fact, the vendor has several servers throughout the country that may house the data, depending upon various circumstances.

ISSUE: Is this arrangement permissible by statute?

ANSWER: Yes.

DISCUSSION:

By statute, offsite storage of real estate transactions and employment records is permissible if notice is provided to the Arizona Department of Real Estate and the documents are saved in state.  See A.R.S. § 32-2151.01(A).  Thus, cloud storage may violate the strict interpretation of the statute, especially if the servers storing the data are located out of the state.  However, the Arizona Department of Real Estate takes the position that, provided the documents are accessible from the brokerage office located in the state, storage in the cloud does in fact comply with the statutory mandate of A.R.S. § 32-2151.01(A).