When perusing your replacement property assignment agreements, you may come across a commonly included section that reads something like the following: "Exchangor intends to assign its rights but not its obligations in the Replacement Property." What exactly does this mean?
Replacement Property Purchase Agreement
Basically, this gives the Exchangor the right to receive the replacement property from the seller, but does not make the Exchangor responsible for fulfilling any of the things the seller is required to do.
In the “old days,” 1031 exchanges had to be done by conveying the subject properties from the seller to the Intermediary, then from the Intermediary to the buyer. The regulations still require that we initially structure it that way even though we later go on to instruct the Exchangor to receive the replacement property directly from the seller (which is now allowed, provided the Exchangor still assigns its rights to the Intermediary). This is simply a nominal assignment for tax purposes.
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