[WSBAPT] Commercial Property Sale - Exchange Service Used But Not a Party to PSA

[Matt Yates]

I have a client selling commercial real property to a seller coincident with an asset sale agreement to effectively sell the entire business.  Client/Seller is using an exchange service for most, not all, of the sales proceeds to try to reinvest in other commercial property and defer the potential tax.  Client has executed via Docusign the exchange service's agreement but Escrow Agent has informed me that instructions from exchanger say that exchanger is NOT to be a named party in the PSA.  This is new to me.  Escrow agent indicates that he has read the instructions from exchanger a few times and that they are clear.

Has anyone encountered this before?  Did the rules change?  I do deal with real property matters in my practice and I am familiar with using 1031 exchange services but not having the exchanger as party to the agreement is new to me.  I don't want clients to incur a tax that can be deferred here due to my lack of familiarity.
Thanks,
Matt

Matthew D. Yates
Attorney at Law
Yates Marshall, PLLC
10000 NE 7th Avenue, Suite 200
Vancouver, WA 98685
Phone: (360) 449-6100
Fax: (360) 449-6111
matt at yatesmarshall.com<mailto:matt at yatesmarshall.com> (New Email Address)
www.yatesmarshall.com

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