Process flags · not a scorecard
Qualified intermediary red flags
This page is about how a firm answers, not a list of bad companies. The QI File does not rate intermediaries and does not treat an unpublished field as a demerit. A red flag here is a diligence failure you can observe on a live file: the contracting party is fuzzy, the account title will not be written down, insurance is a brochure number, or someone wants you to skip an independent bank check. Compare published facts in thedirectory. Use thechecklistto record answers.
The legal entity will not sit still
You are about to appoint a qualified intermediary under Treas. Reg. §1.1031(k)-1(g)(4). If the person on the phone, the website brand, and the signature block are three different names — and no one will say which entity holds the cash — stop and get the legal name in writing. A parent logo is not the contracting party.
No account title, no TIN, “we’ll send that after closing”
After closing is when the relinquished-property proceeds move. Ask for the title and TIN first. If the structure is a qualified escrow or qualified trust under §1.1031(k)-1(g)(3), ask for the escrow holder or trustee’s name. Refusal to put title in writing is a process flag. A blank in our directory is not.
Insurance that exists only on a marketing page
“We carry $X million” with no current certificate, no named insured, and no distinction between fidelity/crime and E&O is advertising. Limits go stale. The QI File omits unsourced numbers; you should too until a certificate arrives. Do not copy a number from a third-party blog onto your file.
FEA or CES offered as a government charter
The Federation of Exchange Accommodators is a trade association (1031.org/about-fea, accessed 2026-09-08). CES® is a personal exam designation. If a salesperson says “we are federally licensed” or “FEA licensed us,” that is a definition error. Membership can still be a useful fact — verify it — but it is not a charter. Seehow to read a listing.
Parent logo as the custody answer
“We’re owned by a bank / title underwriter / national brand” answers who owns the stock. It does not answer whose name is on the deposit account, whether proceeds sit in operating cash, or who can wire. Ask the custody questions anyway. Theinstitutionally ownedandindependentlandings are publication filters, not quality grades.
One person can wire, and that is treated as a non-question
Dual written authorization and segregation are different controls. You can have a TIN-titled account that one officer can empty. If the firm will not say who the authorized signers are, treat that as unanswered — then decide with counsel whether you will wire anyway. Mechanics:segregated vs dual-signature.
Please don’t call the bank yourself
Written independent-verify instructions — a number or portal you look up, not a callback from the same email that sent wiring instructions — are how you test the account story. Pressure to skip that step, or to use only a cell phone on the business card, is a process flag. It is also how social-engineering wires happen.
The DST is sold as if it were the QI
A Delaware Statutory Trust interest used as replacement property is typically a securities offering. A QI listing on this site is a custody file. If the same conversation treats those as one product, separate the documents. SeeQI custody vs DST offerings.
What this page is not calling a flag
- A directory cell that says unpublished or unknown.
- Absence from a state we have not sourced a statute for.
- A firm that does not publish reverse or improvement menus if your deal is a plain delayed exchange.
- Independent ownership or institutional ownership, standing alone.
- FEA membership or the lack of it, standing alone.
FAQ
Is an unpublished field a red flag?
No. On The QI File, “unknown” means we could not cite a public source. That is a sourcing gap or a disclosure gap, not a finding that the firm is unsafe. Ask the question in writing. If the firm still will not answer on a live file, that unanswered question is the flag — not the blank cell.
Does a parent-company logo clear custody risk?
No. A bank, title underwriter, or settlement brand is a corporate-control fact. It does not prove account title, segregation from operating cash, or bank-enforced dual authorization. See segregated vs commingled vs dual-signature.
Should I treat FEA or CES as a license?
No. Collapsing a trade-association membership or a personal CES® designation into “we are licensed” is a process red flag. There is no federal QI license. Verify membership on 1031.org and ask which state statute, if any, actually applies.
Related
Sources
- Treas. Reg. §1.1031(k)-1 — law.cornell.edu/cfr/text/26/1.1031(k)-1. Accessed 2026-09-08.
- Federation of Exchange Accommodators — 1031.org/about-fea. Accessed 2026-09-08.
This page is not tax, legal, or investment advice and is not a finding about any named firm.