(AN AFFILIATE OF Fidelity
National 1031 Exchange Services, Inc.)
Flowchart for §1031 Tax
Deferred Exchange (Build-to-Suit)
RELINQUISHED PROPERTY
Exchanger enters into a contract
(containing an exchange cooperation clause) to sell the Relinquished Property.
Exchanger requests (either directly
or through their closer, broker or attorney) Pacific American Property Exchange
Corporation (PAPEC) to act as Qualified Intermediary.
PAPEC obtains:
A. Preliminary Report/Commitment
B. Sale Contract Agreement/Closing
Instructions PAPEC prepares:
A. Assignment of Seller's
position
B. Exchange Agreement
Exchanger signs exchange documentation
and reviews and approves all closing documents.
PAPEC closes on the sale of
the Relinquished Property and instructs closer to prepare and record the deed
directly from Exchanger to Buyer.
From the Relinquished Property
closing date Exchanger has:
A. 45 days to identify Replacement
Property (including proposed improvements)
B. 180 days (or tax filing
date) to complete the exchange. (Although all improvements to the Replacement
Property do not need to be completed in 180 days, the actual improvements
needed to satisfy the exchange requirements should be completed within the
180 day period.)
REPLACEMENT PROPERTY
Exchanger enters into contract
(containing an exchange cooperation clause) to purchase Replacement Property.
PAPEC obtains:
A. Preliminary Report/Commitment
B. Purchase Contract Agreement
PAPEC prepares:
A. Assignment of Buyer's
position
B. Property Management Agreement
Exchanger and PAPEC authorize
closer to prepare and record deed directly from the Seller to PAPEC.
A. PAPEC is reflected as the
Buyer and Exchanger reviews and approves all closing documents.
B. PAPEC wires sufficient
funds from the exchange account to acquire the Replacement Property.
C. During ownership PAPEC
requires title insurance, hazard insurance and contractors general liability
insurance.
PAPEC requires:
A. Copy of construction
agreement.
B. Name of third-party
authorized to instruct PAPEC to pay contractor. PAPEC prepares:
A. Assignment of construction
agreement
B. Third-party disbursement
agreement
When improvements are completed
(or 180 days nears), PAPEC prepares the deed from PAPEC to Exchanger and forwards
it to settlement agent to record and complete the exchange.
PAPEC provides a detailed accounting
of exchange fund, including construction disbursements.