Did you know that if you own land and sell an easement to that land to a government agency, it is likely that your transaction is eligible for Section 1031 exchange treatment?
Emergency Watershed Protection Program (EWPP) and Wetlands Reserve Program (WRP) easements are being purchased by the Iowa Department of Natural Resources and similar agencies in other states. While the owners of the land retain title to the residual value of their land after the easement is recorded, the sale of the rights to this easement can be exchanged for other real property. This is an excellent means to acquire additional acreage or investment real estate.
For a time, WRP easements were not eligible for Section 1031 exchange treatment. This was due to the fact that the assignment of the purchase agreements was not permitted in the written agreements. Purchase agreements must be assigned to the qualified intermediary for an exchange to proceed, so this prohibition effectively disallowed WRP easements from Section 1031 exchange treatment. In an effort to correct this injustice based upon a misunderstanding, this author contacted all of the Iowa congressmen, including both Senators from Iowa. On October 23rd, 2009, I received an email from Representative Leonard Boswell, a portion of which said the following:
"On October 2nd the Chief Financial Officer at USDA came out with a decision paper regarding obligations and payments for IRS 1031 exchanges. There was concern that USDA could not legally "move" an existing obligation for an easement to a new party.
"Based on discussions with the Office of General Council, the obligation was originally with the landowner, who had the legal ability to assign their rights to a second party. Once NRCS approves this assignment, it would also include the right to the payment for the easement. However, the underlying obligation remains with the landowner and they are making an adjustment in the financial system as an "alternate payee". You will be pleased to know that USDA has resumed 1031 exchanges."
The essence of these comments indicates that the USDA originally thought that by assigning the agreements to an intermediary for a Section 1031 exchange, the obligation of the easement would also be transferred. Although that was never true, it took some time for the USDA to satisfy itself on the fact. Now that they are comfortable with the situation, Section 1031 exchanges are again allowable for WRP easement sales.
If you would like additional information about this subject, please contact us. We are handling a number of Section 1031 exchanges right now for other easement sellers.
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Please consider IOWA EQUITY EXCHANGE as your trusted source for answers to your questions about Section 1031 like-kind tax-deferred exchanges. Contact us at your convenience for prompt, accurate information. Please think of us for your next exchange.
Ken Tharp
800-805-1031 toll free
Providing Qualified Intermediary services for Section 1031 tax deferred exchanges all over the United States. Headquartered in Iowa, our services are available in Missouri, Kansas, Nebraska, Colorado, North Dakota, South Dakota, Minnesota, Wisconsin, Illinois, and all other states.
You'd think it would be fairly simple to list the requirements to defer the maximum amount of capital gain taxes through the use of a Section 1031 exchange. As I set out to write this article, though, I realize that like a lot of other aspects of exchanges, it takes a little thought and effort to describe things accurately.
One-hundred percent deferral of all capital gain taxes is pretty difficult to achieve, but we can all get close to 100% if we watch things closely. The two primary requirements for maximum deferral are these:
1. Buy property with value equal to or greater than the value of the property you sold in the exchange. (In exchange lingo, we say "Trade up or equal.")
2. If you had debt on the property you sold, you should have debt equal to or greater than that amount on the new property. (In exchange parlance, it's "Mortgage up or equal.")
Already, there's a exception to point out. In item #2 above, mortgage debt can be offset by cash contributions. In other words, if you want to have less debt on the new property than the old one, you can accomplish that and preserve your tax deferral by putting up more equity (cash) out of your pocket. Example: Old property value = $100,000; debt on old property = $50,000. New property value = $100,000; debt on new property = $30,000. Obviously, there's $20,000 that has to come from somewhere, probably your pocket. Assuming the $20,000 comes from you, your cash offsets your old debt and you have preserved the deferral of taxes on that amount. You haven't "mortgaged up or equal," but you've offset your mortgage with cash.
Some people think that the next requirement for maximum tax deferral is pretty obvious, and I suppose they're right. I still like to say it when I'm talking about maximizing your deferral, though. It is this:
3. Allow all of the proceeds from the sale of your old property to go into your exchange account, and use all of those proceeds in the new property.
In other words, if you don't use all of your sale proceeds in the new property, you're going to create a tax liability on anything you accept and don't use in that manner.
The last requirement is also pretty evident, but still is worthy of mention:
4. Conduct your exchange within the Safe Harbor of Section 1031 law.
Use an intermediary for your exchange. Have your exchange paperwork in place prior to the closing on the property you're selling. Identify your replacement property in the proper manner within the 45-day window allowed. Wrap up the closing of your replacement property before the end of the 180-day exchange period. And so forth.
Going one step further... you may have noticed that I have not ever referred to "full tax deferral" above. There are some items that appear on most closing statements that are not possible to avoid. If you are using a loan for part of the purchase price of the new property, there will likely be some expenses that relate to that loan that are not considered "exchange expenses." Among those expenses are such things as:
Points or assumption fees
Charges for credit reports
Title insurance or opinion
Loan fees/application fees
We advise our clients and their closing agents to settle tax prorations, security deposit tranfers, and any rent prorations outside of closing. Sometimes they do and sometimes they don't. When they don't, again, those are costs that are not considered exchange expenses.
And lastly, keep in mind that no one forces you to maximize your tax deferral. If you wish to receive some of the proceeds of the sale and are willing to accept the tax liability for doing so, you are certainly entitled to doing so.
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Please consider IOWA EQUITY EXCHANGE as your trusted source for answers to your questions about Section 1031 like-kind tax-deferred exchanges. Contact us at your convenience for prompt, accurate information. Please think of us for your next exchange.
Ken Tharp
800-805-1031 toll free
Providing Qualified Intermediary services for Section 1031 tax deferred exchanges all over the United States. Headquartered in Iowa, our services are available in Missouri, Kansas, Nebraska, Colorado, North Dakota, South Dakota, Minnesota, Wisconsin, Illinois, and all other states.
Many people hear the term "like-kind" when they're talking about Section 1031 exchanges and they start to panic. Please, relax! I've got an easy way for you to figure out whether two properties are like-kind to each other for purposes of exchanging.
First of all, a caveat... the easy way only applies to real estate exchanges. I'll talk more about other types of exchanges later, but suffice it to say that it is more difficult to determine like-kind status in those exchanges. With real estate, however, it's pretty simple. I've heard other exchange people say, "All real estate is like-kind to all real estate." In my opinion, that simplifies things a little too much, and I'll give you an example why later.
For the meantime, here is the secret to determining whether a piece of real estate is like-kind to another piece of real estate within the exchange context: Ask yourself (or your client, if you are a real estate, tax, or legal professional) these questions:
(Regarding the property being sold) Did own this property with the intention of holding it as an investment or using it in the pursuit of my business or trade?
(Regarding the property being purchased) Do I intend to hold this property as an investment or use it in the pursuit of my business or trade?
If you (or your client) can answer, "Yes" to both of those questions and can substantiate his or her answer, the two properties are like-kind for purposes of exchanging.
Is a farm like-kind to an apartment building? In the vast majority of cases, the answer is yes. Is a rental house like-kind to a small-town office building? In the vast majority of cases, the answer is yes. Is a single-family home that was purchased with the intention of fixing up and reselling like-kind to a duplex? AHA! Here's an example of why all real estate is NOT like-kind to all real estate. Clearly the single-family home being rehabbed is real estate, but the IRS considers this property to be inventory in a business and not something that was purchased with the intention of being held for investment. I can hear you arguing "This was an investment!! I invested my hard-earned dollars to buy the house and now I'm investing my hard-earned dollars to fix up the place. Why doesn't that make it an investment??!?" A solid argument, I will admit, but one which you will lose when you face the IRS examiner.
It all comes down to the intent. Did you buy the property you are now selling with the intention of holding it as an investment? No, your intention was to fix it up and sell it. So it does not qualify for a Section 1031 exchange.
I promised to talk about non-real-estate exchanges, but this has already gotten a little lengthy. Let me bring this to a close by saying that the exchanges of business assets, etc. require a much higher standard when determining like-kind status. The IRS uses Asset Classes and Product Classes to determine whether two items are like-kind. The items must fall within the same class to qualify. I will write an article on busines asset exchanges in the future and address this issue more thoroughly. For now, just remember the two questions and you will be set!
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Please consider IOWA EQUITY EXCHANGE as your trusted source for answers to your questions about Section 1031 like-kind tax-deferred exchanges. Contact us at your convenience for prompt, accurate information. Please think of us for your next exchange.
Ken Tharp
800-805-1031 toll free
Providing Qualified Intermediary services for Section 1031 tax deferred exchanges all over the United States. Headquartered in Iowa, our services are available in Missouri, Kansas, Nebraska, Colorado, North Dakota, South Dakota, Minnesota, Wisconsin, Illinois, and all other states.
Occasionally a client will ask that question, and we can usually answer, "YES!" It does depend upon exactly what the client's plans and intentions are, but in general, the replacement property in a Section 1031 exchange can be newly constructed during the exchange or substantially improved during the exchange. Here are the details:
Let's assume that an exchanger has sold his relinquished property and plans to construct a new duplex on a lot that he intends to purchase through his 1031 exchange. A key thing to remember is that once the exchanger takes title to the replacement property, any funds remaining in the exchange account will be transferred to the exchanger and will be taxable! Therefore, the improvements must be structured within the exchange in some way. The process to do this is by using an Exchange Accommodation Titleholder ("EAT") to hold title to the land until the exchange is complete. There is some similarity, then, to a Reverse Exchange in that the exchanger cannot hold title to both the relinquished property and the replacement property at the same time and must use an EAT.
In practice, how does this work? Consider this typical sequence of events:
Exchanger and buyer agree on a purchase agreement for the sale of exchanger's relinquished property.
Exchanger enters into an exchange agreement with a Iowa Equity Exchange.
Exchanger assigns the purchase agreement to Iowa Equity Exchange.
Closing occurs on the relinquished property.
Exchanger informs us of his intention to construct a duplex as his replacement property.
Exchanger and seller agree on a purchase agreement for the purchase of the lot for the duplex.
Exchanger assigns the purchase agreement to the EAT, which is a single-purpose LLC formed by Iowa Equity Exchange for the express purpose of holding title to this property.
Closing occurs and title for the lot is transferred to the EAT.
The exchanger directs the construction of the duplex (or works with a contractor to do so). Funds for construction are drawn from the exchange account at the direction of the exchanger and are paid by the EAT.
Upon completion of the construction or completion of the exchange period (see below), title can be transferred from the EAT to the exchanger and the exchange is finished.
The process is identical if the exchanger wishes to purchase a property and add substantial improvements within his exchange.
The primary hurdle to the construction/improvement exchange is that of timing, which can be a concern in this type of exchange. Both the 45-day Identification Period and the 180-day Exchange Period still apply. The property to be purchased must be unambiguously identified during the 45-day ID period. This means that construction must either be completed during the 180-day exchange period, meaning the identification will be that of a fully-completed building OR the exchanger must be able to see into the future and accurately describe how far along the construction process will be by the end of the 180-day period. By using the 3-Property Rule for identification, it is possible to identify the property in three different stages of completion to somewhat circumvent this obstacle.
Construction/improvement exchanges carry a significantly higher fee than standard exchanges. This is due to the need to create and administer an LLC, plus the additional time requirements of handling payments to contractors during the construction phase. Contact us for details on fees.
Just as every other Section 1031 exchange has its unique qualities, so does every construction/improvement exchange. Construction and improvement exchanges are an extremely valuable tool that can allow the exchanger to end up with just the property that he or she desires. If you have general or specific questions about the process, please feel welcome to get in touch.
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Please consider IOWA EQUITY EXCHANGE as your trusted source for answers to your questions about Section 1031 like-kind tax-deferred exchanges. Contact us at your convenience for prompt, accurate information. Please think of us for your next exchange.
Ken Tharp
800-805-1031 toll free
Providing Qualified Intermediary services for Section 1031 tax deferred exchanges all over the United States. Headquartered in Iowa, our services are available in Missouri, Kansas, Nebraska, Colorado, North Dakota, South Dakota, Minnesota, Wisconsin, Illinois, and all other states.
Granted, a title of "Government 101" likely doesn't draw in many readers. I hope that the subtext indicating that the information isn't boring will encourage a few folks to take a look at this fantastic video.
Have you ever wondered about the origins of our republic? Why it is such an incredible structure? What it is that we will lose if we are not vigilant? I stumbled onto a blog yesterday by Jeff Williams of Four Legacies Mortgage in West Des Moines, Iowa. His blog is called The Money Clip. There's lots of great information there, but this video caught my attention. The video is called The American Form of Government. It's about ten and a half minutes long. Invest the time to be reminded of what you learned back in government class (if you as old as I am, that is; I'm not sure what they teach these days). You will not regret it!!
Please consider IOWA EQUITY EXCHANGE as your trusted source for answers to your questions about Section 1031 like-kind tax-deferred exchanges. Contact us at your convenience for prompt, accurate information. Please think of us for your next exchange.
Ken Tharp
800-805-1031 toll free
Providing Qualified Intermediary services for Section 1031 tax deferred exchanges all over the United States. Headquartered in Iowa, our services are available in Missouri, Kansas, Nebraska, Colorado, North Dakota, South Dakota, Minnesota, Wisconsin, Illinois, and all other states.
Short notice, but I wanted to announce the Spring Educational Seminar and Trade Show of the Iowa Landlord Association. It will take place on Thursday, April 30, at the downtown Holiday Inn. There will be a succession of speakers on relevant topics to landlords. During breaks, please stop in at the vendor trade show and be sure to stop at the Iowa Equity Exchange booth to say hello. We will be there with our display and information to help Iowa investors with their Section 1031 exchanges.
You can find out more about the Iowa Landlord Association at http://www.iowalandlord.org/public/home.asp, including contact information for the group to register for the seminar.
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Please consider IOWA EQUITY EXCHANGE as your trusted source for answers to your questions about Section 1031 like-kind tax-deferred exchanges. Contact us at your convenience for prompt, accurate information. Please think of us for your next exchange.
Ken Tharp
800-805-1031 toll free
Providing Qualified Intermediary services for Section 1031 tax deferred exchanges all over the United States. Headquartered in Iowa, our services are available in Missouri, Kansas, Nebraska, Colorado, North Dakota, South Dakota, Minnesota, Wisconsin, Illinois, and all other states.
Announcing the first annual convention of the Two Rivers Real Estate Investors Association, to be held on May 9, 2009, at the Des Moines Holiday Inn Airport Conference Center. Two nationally-recognized speakers will be making presentations to the group: Larry Goins, of South Carolina, and Pete Youngs, of Georgia. Larry's talk on wholesaling is titled "The Ultimate Buying/Selling Machine." Pete will present a detailed description of rehabbing for profits. Details and registration information is available at http://www.tworiversreia.org/Convention_Registration.html
This event promises to be a fantastic opportunity to network with fellow investors and hear a couple of the top national speakers on investing. I know I'm looking forward to it! Don't miss it if you are going to be in town or near town! There will be a vendor's trade show in conjunction with the event and Iowa Equity Exchange will be present as usual. We will be there with our display and information to help Iowa investors with their Section 1031 exchanges. Please stop by and say hello.
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Please consider IOWA EQUITY EXCHANGE as your trusted source for answers to your questions about Section 1031 like-kind tax-deferred exchanges. Contact us at your convenience for prompt, accurate information. Please think of us for your next exchange.
Ken Tharp
800-805-1031 toll free
Providing Qualified Intermediary services for Section 1031 tax deferred exchanges all over the United States. Headquartered in Iowa, our services are available in Missouri, Kansas, Nebraska, Colorado, North Dakota, South Dakota, Minnesota, Wisconsin, Illinois, and all other states.
One of the most common questions we receive is something along the lines of "What do I put in my Purchase Agreement if I want to do a Section 1031 exchange?" The answer can sometimes be, "Nothing," although we do suggest that you use what is known as a cooperation clause. By law, there is no requirement for the cooperation clause. What is required, however, is that the contract be assignable, or in most states, that there be no restriction on the contract's assignability. In other words, your purchase agreement should not have language that says "This contract may not be assigned to another party by the buyer or the seller."
The reason for this is simple - in an exchange, the exchanger must assign the purchase agreement to the intermediary for the exchange to proceed. If a prohibition to assigning is present and it is not stricken from the contract, an exchange is not possible. What if you have already signed a contract that is so-restricted? As long as both sides agree, an exchange is still possible by using an addendum where the parties agree to allow assignments.
A more common approach is for the seller to lay his cards on the table and disclose to the buyer that he intends to perform a Section 1031 exchange by including a cooperation clause in the purchase agreement. There is really no downside to doing so when selling. By doing so, the exchanger establishes his intent and elicits the cooperation of the buyer. There is no loss of negotiating power when acting as the seller.
On the contrary, when a client has already sold his relinquished property and entered into an exchange, there can be a loss of negotiating power when offering to buy a replacement property. Let's assume that the exchanger has already formally identified three properties that could serve as his replacement property. For whatever reason, two of them are no longer available. (Perhaps they were sold to another party, or the seller took them off of the market, or one had a fire, etc.) Now the exchanger has but one property he can purchase to complete his exchange. If the purchase agreement contains language requesting the seller's cooperation for an exchange and the seller is savvy about exchanges, that seller may justifiably believe that he has the upper hand in any negotiations. That is why we often suggest that the exchanger leave out the cooperation language until after negotiations have concluded, instead having them make sure that the agreement does not restrict assignments. Then after the fact we can have an addendum added to the agreement that contains the cooperation language.
Now, what is this "cooperation language" that I've referred to so many times? Here is our version for when you are selling:
“It is the intention of Seller to transfer the above-listed property pursuant to Internal Revenue Code Section 1031, which sets forth the requirements for tax-deferred real estate exchanges. Seller’s rights and obligations under this and future agreements will be assigned to Iowa Equity Exchange, qualified intermediary, for the purpose of completing an exchange. Buyer of the above-listed property agrees to cooperate with Seller and Iowa Equity Exchange in a manner necessary to enable Seller to complete said exchange. Such cooperation shall be at no additional cost or liability to Buyer.”
Feel free to copy and paste this into your purchase agreements and get in touch with us whenever you are considering an exchange!
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Please consider IOWA EQUITY EXCHANGE as your trusted source for answers to your questions about Section 1031 like-kind tax-deferred exchanges. Contact us at your convenience for prompt, accurate information. Please think of us for your next exchange.
Ken Tharp
800-805-1031 toll free
Providing Qualified Intermediary services for Section 1031 tax deferred exchanges all over the United States. Headquartered in Iowa, our services are available in Missouri, Kansas, Nebraska, Colorado, North Dakota, South Dakota, Minnesota, Wisconsin, Illinois, and all other states.
This will be a first... I'm going to give you an inside look at what it is we are trying to do here at Iowa Equity Exchange. First of all, props to Jeffrey Gitomer for a column on this topic that prompted me to devote detailed thought to these things. Let's start out with a definition.
When you think of someone who is "serious," does that conjure up the image of a staid, stoic individual, boring and stiff? In business, that's just not the case. The actions that are taken by a business build its image. If your business shows a desire to serve that is accompanied by the ability to serve, the public (your customers/clients) may perceive you as serious. Isn't that what you want, to be taken seriously by your customers and clients?
As a businessman, I certainly want my business to be taken seriously by its clients. Here's a list of some of the things I want our clients to know about us:
I want them to know that we are serious about helping them. Most of our clients have a lot of questions both before they enter into an exchange and during their exchange. We are available for them to talk to by calling our office number pretty much anytime during normal waking hours, seven days a week. On the chance that we do not answer their call in person, it's rare that the call does not get returned within an hour.
I want our clients to know that we are serious about knowing what we're doing. Handling Section 1031 exchanges is all we do. This is our full-time business, and we take the actions necessary to stay on top of changes that affect exchanges. We are one of a very small percentage of qualified intermediary companies that belong to the Federation of Exchange Accommodators, the national association for the exchange industry.
I want our clients to know that we are serious about being an online leader. We invest in our future by maintaining an online presence. regularly updating our website. We post blog articles periodically. We maintain and update our LinkedIn profile, including linking this blog to our profile and uploading presentations to our profile. You can follow us on twitter (@kentharp), and we're on facebook.
I want our clients to know that we are serious about being friendly and creating a pleasant atmosphere. Being friendly doesn't cost any more than not being friendly, and it sure makes life more pleasant.
I want our clients to know that we are serious that now is the time. Our heads are not in the sand; we recognize that times have changed. Regardless of conditions, though, we will strive to maximize the opportunities that exist now, not wait for things to change.
I want our clients to know that we are serious about striving for perfection in everything we do. We're not there yet and we may never get there, but we'll keep trying. Our clients also discover that we recover from any imperfections in extremely short order.
I want our clients to know that we are serious about doing the right thing. Our clients' best interests are always the inspiration for our actions. Sometimes this means telling our clients that an exchange may not be the best course of action for them, meaning we lose potential business. If it's best for the client, it will serve us best in the long run.
How does all of this relate to selling? It is my belief that a business cannot really attempt to sell its services until its clients are comfortable that the business is serous about itself. The only real way to show your clients that you are serious about your business is to serve them properly. After you provide quality service to your client and establish that you can be taken seriously, making the sale is almost a foregone conclusion.
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Please consider IOWA EQUITY EXCHANGE as your trusted source for answers to your questions about Section 1031 like-kind tax-deferred exchanges. Contact us at your convenience for prompt, accurate information. Please think of us for your next exchange.
Ken Tharp
800-805-1031 toll free
Providing Qualified Intermediary services for Section 1031 tax deferred exchanges all over the United States. Headquartered in Iowa, our services are available in Missouri, Kansas, Nebraska, Colorado, North Dakota, South Dakota, Minnesota, Wisconsin, Illinois, and all other states.
In a further confirmation that values have peaked at least for now, the REALTORS® Land Institute semi-annual survey shows a 7.6% drop in the price for farmland over the six months ending February 28 of this year. This survey is conducted every six months and consists of input from the state's farmland real estate community. The previous survey indicated an increase of 6.6%. The previous twelve months, therefore, show approximately a 1% drop in values.
No one is necessarily panicking about this drop or leveling off, however. According to Troy Louwagie, REALTOR® with Hertz Farm Management and also the spokesman for the Iowa Farm Land Chapter No. 2 REALTORS® Land Institute, the people behind the survey, "Land went up about 70 percent in the past five years. We probably were due for a correction." He also points out that prices are still at roughly the level they were a year ago, meaning that values remain strong.
Sam Kain of Farmers National Company projects the future values of land to remain relatively stable. He's not expecting a precipitous drop, but wouldn't be surprised by small decreases. Mr. Kain points out two factors that could help support land values: 1) investors with cash may look at land as one of the safest places to put that cash in the midst of the general market uncertainties we are facing, and 2) current farmers and land owners may believe that their equity is best used by staying put and not selling in the immediate future, meaning that available land may be somewhat more scarce than in previous years.
Here is a graphic of the breakdown statewide, courtesy of The Des Moines Register:
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Please consider IOWA EQUITY EXCHANGE as your trusted source for answers to your questions about Section 1031 like-kind tax-deferred exchanges. Contact us at your convenience for prompt, accurate information. Please think of us for your next exchange.
Ken Tharp
800-805-1031 toll free
Providing Qualified Intermediary services for Section 1031 tax deferred exchanges all over the United States. Headquartered in Iowa, our services are available in Missouri, Kansas, Nebraska, Colorado, North Dakota, South Dakota, Minnesota, Wisconsin, Illinois, and all other states.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
being purchased by the Iowa Department of Natural Resources and similar agencies in other states. While the owners of the land retain title to the residual value of their land after the easement is recorded, the sale of the rights to this easement can be exchanged for other real property. This is an excellent means to acquire additional acreage or investment real estate.
transferred to the exchanger and will be taxable! Therefore, the improvements must be structured within the exchange in some way. The process to do this is by using an Exchange Accommodation Titleholder ("EAT") to hold title to the land until the exchange is complete. There is some similarity, then, to a 
es Mortgage in West Des Moines, Iowa. His blog is called 
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can be a loss of negotiating power when offering to buy a replacement property. Let's assume that the exchanger has already formally identified three properties that could serve as his replacement property. For whatever reason, two of them are no longer available. (Perhaps they were sold to another party, or the seller took them off of the market, or one had a fire, etc.) Now the exchanger has but one property he can purchase to complete his exchange. If the purchase agreement contains language requesting the seller's cooperation for an exchange and the seller is savvy about exchanges, that seller may justifiably believe that he has the upper hand in any negotiations. That is why we often suggest that the exchanger leave out the cooperation language until after negotiations have concluded, instead having them make sure that the agreement does not restrict assignments. Then after the fact we can have an addendum added to the agreement that contains the cooperation language.
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