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September 9, 2010 |
When do you need an Accommodator |
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An Accommodator (Qualified Intermediary) is someone who facilitates your 1031 exchange. If you are able to accomplish a simultaneous 1031 exchange, it will not be necessary to engage the services of an accommodator. A simultaneous 1031 exchange occurs when either the Exchangor exchanges his property directly for the property owned by the buyer, or the Exchangor is able to close escrow on his relinquished property and his replacement property on the same day. In reality, this type of 1031 exchange is very rare.
The most common type of 1031 exchange is a delayed 1031 exchange using an accommodator. When the relinquished property is transferred to the buyer, the Exchangor may not know what property they want to acquire. If the Exchangor can not acquire the replacement property on the same day they sell the relinquished property then the Exchangor needs an accommodator.
The Accommodator should be a corporation that is in the full-time business of offering qualified intermediary services. The role of an accommodator is similar to but not identical to the role of an escrow company.
You can not use anyone who is related to you or who has had a financial relationship with you within the two years prior to the close of escrow of your 1031 exchange. This means that you can not use your current attorney, certified public accountant or your real estate agent.
The Accommodator holds the proceeds from the sale of the relinquished property beyond the actual or constructive receipt of the Exchangor. The Accommodator also prepares the necessary documents to accomplish a 1031 exchange.
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