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1031 Exchange Language

 

Although the law does not require that you insert specific 1031 Exchange language into the Purchase and Sale contract both parties to the contract must agree to an assignment of contract rights from the exchanging party to the Qualified Intermediary. Below is sample of the language that may be included in a sales contract:

 

Sale of Relinquished Property

"Buyer is aware that Seller intends to perform an IRC §1031 tax deferred exchange. Seller requests Buyer's cooperation in such an exchange and agrees to hold Buyer harmless from any and all claims, liabilities, costs, or delays in time resulting from such an exchange. Buyer agrees to an assignment of this contract to Asset Exchange Company by the Seller."

 

Purchase of Replacement Property

"Seller is aware that Buyer intends to perform an IRC §1031 tax deferred exchange. Buyer requests Seller's cooperation in such an exchange, and agrees to hold Seller harmless from any and all claims, liabilities, costs, or delays in time resulting from such an exchange. Seller agrees to an assignment of this contract to Asset Exchange Company by the Buyer."

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