We comply with State Law in All States in Which We do Business:
See specific State Law Disclosures Below
State Law Disclosures for 1031 Exchange Qualified Intermediaries.
California
On September 30, 2008, Governor Schwarzenegger enacted SB-1007, effective January 1, 2009, mandating certain obligations for qualified intermediary (QI) firms handling exchange funds for clients owning relinquished or replacement property in California, or operating within the state.
SB-1007 is codified in California Financial Code Section 20.5, which outlines regulations pertaining to exchange facilitators or qualified intermediaries (QIs) handling exchange funds in real estate transactions. It mandates that QIs must comply with specific bonding and insurance requirements, notify California Exchange Customers of any change in company control, act as custodians for all exchange funds, and invest them according to California’s “prudent investor standard.” Violations may result in civil litigation, with customers able to seek damages. The law does not mandate registration or licensing and remains effective for a specified period.
Washington State
RCW 19.310.040 Disclosure:
“Washington state law, RCW 19.310.040, requires an exchange facilitator to either maintain a fidelity bond in an amount of not less than one million dollars that protects clients against losses caused by criminal acts of the exchange facilitator, or to hold all client funds in a qualified escrow account or qualified trust that requires your consent for withdrawals. All exchange funds must be deposited in a separately identified account using your taxpayer identification number. You must receive written notification of how your exchange funds have been deposited. Your exchange facilitator is required to provide you with written directions of how to independently verify the deposit of the exchange funds. Exchange facilitation services are not regulated by any agency of the state of Washington or of the United States government. It is your responsibility to determine that your exchange funds will be held in a safe manner.”
Texas (and Other States)
Texas does not have any laws governing the operation of Qualified Intermediary Businesses. Therefore, it is critical that you ensure your funds are held in a safe manner, such as the Qualified Escrow Accounts at Major National Banks used by Lawyers 1031 as your qualified intermediary. See the page titled “Security and Safety of 1031 Funds.”