The retention of paper records in electronic format
By Ron Bleiberg
The Retention of Paper Records in electronic format - Connecticut and New York States
This describes the circumstances under which a mortgage lender, broker, real estate agent or other party involved in real estate transactions may dispose of original paper records.
No Connecticut law or regulation speaks directly to this business, or requires that any particular record created in the course of this business be kept in hardcopy, original form. It is clear from both Connecticut's Rules of Civil Procedure, administrative opinions, and the rules and regulations promulgated by the State in handling of its own critical documents that original documents may be destroyed after first preserving them in an appropriate electronic format.
These are the guidelines that should be followed:
1. Records may be kept in original form, or electronic form ;
2. Existing record retention guidelines (ie., length of time to hold unto documents) must be followed : If a paper record was to be kept for 10 years, the electronic record should be kept for 10 years.
3. It is important to establish a systematic method of conversion to electronic records, and destruction of original paper records, and ensure the process is being followed. This will forestall any argument that a particular original document was intentionally destroyed in an attempt to keep it from being entered in evidence.
4. The systematic method of conversion must ensure the integrity of the electronic copy. That is to say, how a paper document is handled, the methodology used to convert it must be documented to ensure that the paper document was reproduced in electronic form as an exact copy, without manipulation of original content. This is no different than typical "laying the foundation" for introduction of copies as evidence of originals. In addition to a documented process, an audit procedure should be installed to "test" the integrity of electronic conversion: sample originals should be compared to their electronic counterparts to ensure that information is being properly captured, including signatures.
5. Where records are required to be maintained for several years, it is advisable, though not required, that they be maintained in a non-rewritable electronic medium, such as non-rewritable CD, and that such medium itself be stored in a secure location.
Applicable legal authorities:
Connecticut's own standards for storing public records provide an excellent analysis of the issues involved in selection of a conversion and storage process. Standards for storage of official documents are under the auspices of the Connecticut State Library. Some focus is on cost considerations and flexibility to ensure subsequent technology upgrades. However, they also clearly indicate the need for integrity in the conversion and protection of the converted data. The rules set forth above are consistent with the recommendations made by the State.
The complete authority can be found at:
http://www.cslib.org/optical.htm
The most critical statutory provision is contained in Title 52 Chapter 899 Section 52-180 of the Connecticut General Statutes. It can be found in its entirety at:
Sec. 52-180. Admissibility of business entries and photographic copies.
Similar enabling language is found in New York statutes and regulations, where the Attorney General's office has addressed the issue in connection with storage of insurance records. There, the AG stated as follows:
N. Y. Comp. Codes R. & Regs. tit. 11, Part 243 (1996) (Regulation 152) is entitled "Standards of Records Retention by Insurance Companies." The term "Records " is defined in § 243.1(b) as "..books, records, files, securities, data compilations and other documents." Among other things, insurers are permitted to maintain their records in a "durable medium," which is defined in § 243.1(c) as:
. . . a medium for maintaining a record where the properties of such medium provide reasonable assurances against tampering with the information contained in the original and degradation of any reproduction generated, and where the reproduction is an exact copy of the original. The medium may include paper; facsimile; or photographic, micrographic, magnetic, optical, mechanical or electronic media . (emphasis added)
Specifically, § 243.3(a)(3) states: "Upon transfer of an original record to a durable medium, the insurer may destroy the original record after assuring that all information contained in the original record, including signatures, handwritten notations, or pictures, is contained in the durable medium."
Published December 30, 2005
