Exeter News Wire
William L. Exeter
President and Chief Executive Officer
Exeter 1031 Exchange Services, LLC
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FOR IMMEDIATE RELEASE
California 1031 Exchange Legislation Becomes Law
Governor Signs California's First Law Covering Qualified Intermediaries
October 2, 2008--San Diego, California--California Governor Arnold Schwarzenegger signed California Senate Bill SB 1007 into law on October 2, 2008. Senate Bill SB 1007 will help strengthen the 1031 exchange Qualified Intermediary industry.
SB 1007 requires 1031 exchange Qualified Intermediaries to meet certain minimum standards set by the California legislature if they are doing business as a 1031 exchange Qualified Intermediary within the State of California.
The minimum requirements under SB 1007 include:
- Minimum Fidelity bond coverage of $1 million; or deposit cash, securities or a letter of credit for at least $1 million; or use a Qualified Escrow or Qualified Trust Account.
- Minimum Errors and Omissions insurance coverage of $250,000; or deposit cash, securities or a letter of credit for at least $250,000.
- Must act as a custodian of the exchange funds and meet the "prudent investor" standard in the investment of funds, and satisfy investment goals of liquidity and preservation of principal.
- The exchange facilitator cannot comingle exchange funds with operating accounts.
- Must not loan or
transfer 1031 exchange funds to an affiliate (other than to an affiliate financial institution or to an exchange accommodation titleholder pursuant to the exchange contract).
- Must not engage in various bad faith acts, such as material misrepresentations, false advertising, failure to account for 1031 exchange funds or other property, failure to return 1031 exchange funds to clients, fraud, criminal conduct, etc.
- Exchange facilitators must notify clients in writing within 10 days after there has been a change in ownership of more than 50% of the ownership of the 1031 exchange Qualified Intermediary.
"We are very pleased that the State of California has enacted this new legislation. We have always strongly believed in and supported the need to regulate 1031 exchange Qualified Intermediaries over the years. Exeter 1031 Exchange Services, LLC, Exeter Fiduciary Services, LLC, and its affiliate companies have always significantly exceeded these minimum operating requirements since we commenced operations," said William L. Exeter, president and chief executive officer, The Exeter Group of Companies.
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We Have Answers. Go Ahead, Ask.
Exeter 1031 Exchange Services, LLC is a leading national provider of Qualified Intermediary, Exchange Accommodation Titleholding, and Advisory services for individual, corporate and institutional 1031 exchange clients as well as cost segregation analysis services for commercial real estate investors.
Exeter administers all types of 1031 exchange transactions, including forward, reverse and improvement (build-to-suit or construction) 1031 exchange structures, in all 50 states. Exeter 1031 Exchange Services, LLC currently has national office locations in San Diego, Irvine, Ontario, Bakersfield, Fresno, and San Francisco, California and Kona, Hawaii, Tucson, Arizona, East Northport, New York, and Springfield, New Jersey.
You can contact Exeter at anytime, 24 hours a day, 7 days a week, 365 days a year. Call Exeter 24/7 provides round-the-clock access to our senior 1031 exchange advisors when you need them.
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