Replacement Property Identification

Building an identification list in Orlando usually means pulling candidates from more than one submarket at once, since downtown office, Lake Nona medical space, I-4 corridor multifamily, and net lease pads along the tourism corridors rarely all move on the same timeline. The list has to be written and delivered before day 45 regardless of which submarket is still finalizing its own diligence.

A working candidate list gets sorted by how far along each property's diligence is, rather than only by preference, so a strong candidate that is still waiting on a lease abstract or insurance quote does not silently fall behind a weaker one that happened to finish review first. Properties near downtown, Winter Park, and the I-4 corridor often clear diligence at different speeds because of how their ownership and lease records are organized.

Keeping that list visible in one place, updated as each candidate's diligence status changes, is what prevents a late surprise from forcing a rushed decision in the final days of the window.

An identification notice has to describe each property with enough detail that there is no reasonable doubt about which asset is meant, which usually means more than a street address and requires confirming the legal description matches title records before delivery.

• Full legal description matched to title
• Street address and parcel identification number
• Unit or suite number where the property is part of a larger building
• Confirmation the description matches the purchase contract

The written identification has to reach the qualified intermediary, in writing, before midnight on day 45, and that delivery gets scheduled for several days ahead of the deadline rather than the deadline day itself. Building in that buffer accounts for a last-minute description correction or a delayed signature without threatening the deadline itself.

Confirming receipt with the QI, rather than assuming an email or fax went through, closes the loop on a step that cannot be redone if it is missed.

A named property can fall out of contract after identification for reasons outside anyone's control, whether that is a financing denial, a title problem, or a seller who backs out, and the exchange can still succeed if a viable backup was named on the same list. This is the practical reason a list resting on a single strong candidate carries more risk than one with a real second option.

Reviewing backup candidates with the same diligence discipline as the lead choice, rather than treating them as a formality, is what makes the backup actually usable if it is needed.

The candidate list gets shared with the broker, lender, and tax advisor as soon as it is drafted, not held back until the identification decision is nearly final, since each advisor may flag something the others would not catch on their own. A lender might know a specific submarket has slower appraisal turnaround, while a tax advisor might flag a boot concern on a candidate that otherwise looks strong.

Circulating the draft list early, then updating it as feedback comes in, keeps the final identification from being a solo decision made without the full picture the rest of the team could have provided.

How many properties can be named, and does that depend on which rule applies?

Under the three-property rule, up to three properties can be identified regardless of value; under the 200 percent rule, more than three can be named as long as their combined value does not exceed twice the relinquished property's value; and the 95 percent rule allows naming any number if the investor ultimately acquires at least 95 percent of the total value identified. Which rule fits best depends on how many strong candidates exist and how confident the investor is in each one.

What makes a property description 'unambiguous' for identification purposes?

An unambiguous description generally means a legal description or an address and parcel number specific enough to leave no doubt about which property is meant, matched against title and the purchase contract. A vague reference, an unbuilt property without adequate specificity, or a description that conflicts with the contract can create problems later.

Can a written identification be changed after it's delivered to the QI?

An identification can be revised or replaced as long as the change is made and delivered before the 45-day deadline expires; after that date, the list is locked. This is why keeping the working candidate list updated throughout the window matters, since a late-breaking issue with one property can still be addressed if there is time left before day 45.

Does sending marketing material for a property count as identification?

No. Identification requires a specific written notice delivered to the qualified intermediary describing the replacement property, and a broker's listing sheet, an email mentioning interest, or a verbal conversation does not satisfy that requirement on its own. The formal notice has to be prepared and delivered separately, even if marketing material was shared earlier.

What happens if none of the identified properties end up closing?

If none of the properties on a valid identification list close within the 180-day exchange period, the exchange fails and the transaction is generally treated as a taxable sale of the relinquished property. This is the core reason backup candidates are reviewed with real diligence rather than named as a formality.