a cooperation clause refers to a provision that is often included in the purchase agreement between the buyer and seller of the properties being exchanged. This clause requires both parties to cooperate with each other and with the qualified intermediary (QI) who is facilitating the 1031 exchange.
The cooperation clause typically includes provisions related to the transfer of documents, funds, and other information necessary to complete the exchange. It may also require the parties to take certain actions, such as signing necessary paperwork, providing notices to relevant parties, or executing necessary agreements, to ensure the exchange can be completed in a timely and efficient manner.
The cooperation clause is important in the 1031 exchange process because it helps to ensure that all parties involved work together to complete the transaction successfully. Without this clause, one party may be able to delay or disrupt the exchange, which could result in negative consequences for all parties involved.