Qualified Intermediary Coordination

The qualified intermediary holds your exchange proceeds and prepares the exchange agreement that keeps a sale from becoming a taxable event through constructive receipt. Coordinating that role in Connecticut has one wrinkle most other states don't: Connecticut requires a licensed attorney to conduct the real estate closing itself, which means your QI's fund transfer has to sequence around the closing attorney's timeline rather than a title company's. That single difference shapes almost every other coordination step described below.

In states where a title company runs the closing, the QI often works directly with escrow on fund transfers. In Connecticut, the closing attorney handles disbursement, so the QI's exchange agreement, assignment of the purchase contract, and wire instructions all route through that attorney's office. We build the coordination checklist around that handoff so funds move on the closing date rather than getting held up by a paperwork gap between the QI and the attorney. In practice that means introducing the QI and the closing attorney's office to each other well before the relinquished closing, rather than letting them exchange documents for the first time under deadline pressure.

The exchange only works if you never have actual or constructive access to the sale proceeds between the relinquished closing and the replacement purchase. That means the exchange agreement, the assignment of both contracts, and the QI's escrow instructions have to be signed before the relinquished property closes — not after. We treat this as a hard sequencing rule, not a formality to clean up later. A closing date moved up by a few days can otherwise catch an unsigned assignment still sitting in someone's inbox, and that alone is enough to unwind an otherwise well-planned exchange.

Constructive receipt also comes up in less obvious ways, such as an investor being named a co-signer on the QI's escrow account or retaining the right to demand early release of funds under the exchange agreement. We review the exchange agreement's language on early termination before signing, since a QI agreement that gives you too much control over the held proceeds can undercut the very deferral the exchange is meant to provide.

A qualified intermediary relationship touches several fixed points along the exchange, and we track each one:

• Exchange agreement and assignment signed before the relinquished closing
• Wire instructions confirmed directly with the QI, not by email alone
• Written identification delivered to the QI before day 45
• Replacement purchase contract assigned to the QI before that closing
• Final settlement statement reviewed for boot before disbursement
• Form 8824 documentation package requested from the QI after closing

Not everyone can serve as your QI — your attorney, accountant, real estate agent, or anyone who has acted as your agent in the two years before the exchange is disqualified by the related-party and agency rules. We help you evaluate intermediary options on fidelity bonding, how proceeds are held, and responsiveness during the identification window, since a slow QI turns a manageable deadline into a real risk. We also confirm how the intermediary structures its escrow accounts — commingled versus segregated per client — since that detail affects how quickly funds can move once a replacement closing is scheduled with the attorney.

Can my Connecticut real estate closing attorney also serve as my qualified intermediary?

No. Anyone who has acted as your attorney, accountant, or agent within the two years before the exchange is disqualified from serving as your QI under the related-party rules, so your closing attorney and your intermediary need to be separate parties even though they'll coordinate closely.

What happens if the closing attorney disburses funds directly to me instead of the QI?

That would put the sale proceeds in your actual or constructive receipt and disqualify the exchange, which is why the exchange agreement and assignment documents have to be in place with the attorney's office before the relinquished property closes, not signed as an afterthought at the closing table.

How does the 180-day deadline interact with Connecticut holidays or weekends?

If day 180 falls on a weekend or federal holiday, the deadline generally does not extend — the exchange period runs on calendar days from the relinquished closing, not business days. We flag the actual calendar date early so the replacement closing gets scheduled with margin rather than against the wire.

What documentation does the qualified intermediary provide after the exchange closes?

The QI typically provides a closing statement summary and settlement records that your CPA needs to prepare Form 8824, along with confirmation that funds were held and disbursed without ever passing through your hands.

Do I need a new qualified intermediary relationship for each property I exchange in Connecticut?

You need a new exchange agreement for each relinquished property, though many investors who exchange more than once use the same intermediary firm across multiple transactions for consistency in how documentation and wire instructions are handled.