Understanding and staying current on 1031 exchange rules is critical to accommodating a successful 1031 exchange. Today, anyone is legally permitted to act as a Qualified Intermediary to facilitate Section 1031 Exchanges. This lack of regulation may create a host of problems; even one mistake could invalidate the tax-deferment benefits of an exchange.
In response, the
Federation of Exchange Accommodators (FEA) has established a Certification and Continuing Education Program, designed to increase the professionalism of the exchange industry and foster public confidence in selecting and working with an exchange accommodator. The program is available only to FEA members who meet specific work-experience criteria and pass an exam on exchange laws and procedures.
The test for the certification covers an array of exchange-related topics designed to challenge the candidate's knowledge of exchange rules and competency in performing the critical activities of an exchange facilitator company. The test also focuses on ethical issues that emerge when any third party controls the funds of another.
Because Section 1031 exchanges are complex transactions, the CES® designation is an important indicator of an accommodator's experience and knowledge. It demonstrates to a property owner considering an exchange that the professional they have chosen has met the key criteria necessary to perform exchange transactions accurately and ethically.
The purposes of the FEA CES® certification program are to:
Establish nationally recognized standards of knowledge and experience for exchange specialists;
Assess the level of knowledge demonstrated by exchange specialists in a valid and reliable manner;
Encourage professional development in the exchange accommodation field;
Formally recognize individuals who meet the requirements set by FEA; and
Serve the public by encouraging quality Section 1031 exchange services.
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