Special offer

Suggested Due Diligence Questions for your 1031 Exchange QI

By
Services for Real Estate Pros with Exeter 1031 Exchange Services

Suggested Due Diligence Questions

Exeter 1031 Exchange Services, LLC has put together some suggested due diligence questions that you should ask prospective 1031 Exchange Qualified Intermediaries.  While there are numerous other issues that should be considered, Exeter 1031 Exchange Services, LLC feels these are the most important issue that should be on the top of your due diligence list.

  • How many years have you been administering 1031 Exchange transactions?
  • How many 1031 Exchanges have you administered (individual 1031 Exchange officer and 1031 Exchange Qualified Intermediary)?
  • Do you maintain fidelity bond insurance coverage to insure against employee theft, embezzlement or misappropriation of the 1031 Exchange funds?
  • What is the policy limit of your fidelity bond coverage?
  • Is your fidelity bond coverage "per occurrence" or merely "in aggregate"?
  • Will you provide me with copies of your insurance binders and the contact information for your insurance agents so I can verify that your insurance coverage is still in full force and effect?
  • Do you maintain sufficient errors and omissions (E&O) insurance coverage to insure against any 1031 Exchange Qualified Intermediary error or omission?
  • What is the policy limit of your errors and omissions insurance coverage?
  • Do your fidelity bond and errors and omissions (E&O) insurance policies cover just the 1031 Exchange Qualified Intermediary or do they also cover numerous other related entity operations that might diminish the overall protection to me in the event of multiple losses throughout the consolidated entity such as title insurance, escrow, etc.?
  • What type of internal processes and internal audit controls have you implemented to protect my 1031 Exchange assets?
  • Do your 1031 Exchange administrators call me prior to the disbursement of my 1031 Exchange funds to ensure that I want the funds disbursed (as opposed to disbursing when escrow calls). 

Comments (0)