Does Hanan make you feel less secure about the future?

From all the comments to Hanan’s recent post about weathering the RE downturn over at grow-a-brain, it got me thinking about how secure people feel when facilitating a 1031 exchange. 1031 Exchange Coordinators (our firm) has put out a list of questions you should ask your potential future Qualified Interemediary before you start working with them.

They are: 

  1. Do you have a current Fidelity Bond?
  2. What is you investment policy?
  3. Where do you keep trust funds?

I’ll let you look at our answers for the sake of brevity in this post.

With the Qualified Intermediaries (QI) holding your client’s money for up to 6 months in their trust account, you have to make sure you can trust your QI. In the last year or two there have been a spate of QIs that have skipped town with their clients’ monies and now the clients can’t get it back because they never checked for the QI’s E&O Policy or Fidelity Bond. You gotta check them people or you may be liable!!!


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