Washington Rules for Exchange Facilitators
State law requires facilitators to prove fund safeguards before you sign an agreement.
Bonding or Trust Protection
Washington law requires facilitators to hold a fidelity bond, or keep your funds in a qualified escrow or trust that meets the statute. Ask which option your facilitator uses, and request written proof before you sign anything.
Insurance and Bonding Requirements
State law also requires facilitators to carry errors and omissions insurance, or meet a statutory alternative. This protects you if the facilitator makes a mistake handling your funds. Request current proof of coverage as part of your due diligence, not after funds move.
Disclosures Before You Sign
The statute requires facilitators to give you evidence of bonding or insurance, along with required disclosures, before you sign an agreement. It also requires a notice stating facilitation is not regulated by a state or federal agency. Read that notice carefully.
Sources
Educational only, not tax advice. Your CPA must confirm tax treatment, timing, participation, basis, and filing before you act.
Common questions
Clear answers first. If one question changes the deal, bring it into the review before you move money.
Q1Does Washington require bonding for exchange facilitators?+
Yes. Washington law under RCW 19.310 requires facilitators to hold a bond, or keep your funds in a qualified escrow or trust that meets the statute. Ask your facilitator which method they use and request written evidence before you sign.
Q2What insurance should a Washington facilitator carry?+
State law requires errors and omissions insurance, or a statutory alternative. This protects you if the facilitator makes an error handling your exchange funds. Ask for current proof of coverage before you sign any agreement.
Q3Is a Washington exchange facilitator regulated by the state?+
Washington's statute requires a notice stating that facilitation is not regulated by a state or federal government agency. That is why bonding, insurance, and written disclosures matter. Verify them yourself before you commit any funds.
Want Help Vetting Your Facilitator?
Book a Real Estate Review to walk through your property and timeline, then use the 1031 Readiness Checklist to confirm bonding, insurance, and disclosures before you sign.
Want Help Vetting Your Facilitator?
Book a Real Estate Review to walk through your property and timeline, then use the 1031 Readiness Checklist to confirm bonding, insurance, and disclosures before you sign.
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