Every deferred exchange runs on two federal deadlines, and the first one arrives fast. From the day a relinquished property transfers, an investor has exactly 45 calendar days to put replacement candidates in writing and deliver that list to the qualified intermediary. There is no grace period built into the statute, no allowance for a slow lender or a broker on vacation, and the rules governing how many properties can appear on that list are stricter than most sellers expect walking into closing. Understanding which counting rule applies before the list is drafted is what keeps a strong exchange from being disqualified by a technicality months later.
When the Clock Starts and Why the Date Matters
The 45 days begin on the date title to the relinquished property actually transfers, not the date a purchase agreement is signed or the date proceeds are wired to the qualified intermediary. Sellers occasionally confuse this with the closing they scheduled weeks earlier, then discover the recorded transfer date, sometimes pushed a day or two by a title company or a Multnomah County recording backlog, is what actually starts the count. Confirming the exact recorded date with the qualified intermediary the same week of closing removes the single most common source of a miscounted deadline. Weekends and federal holidays are not skipped in the count, so a transfer late in a given week can leave less working time than the raw day count suggests.
The Three-Property Rule
Under the three-property rule, an investor can identify up to three replacement candidates without regard to their combined value. A seller who closed a $2.1M Swan Island industrial building could list a $1.8M property, a $2.9M property, and a $3.4M property on the same identification, since the rule caps the count rather than the price. Most Portland-metro exchanges run under this rule simply because three well-screened candidates, with financing and title already checked, cover most outcomes without needing a longer list.
The 200 Percent Rule
When an investor wants more than three candidates on the list, the 200 percent rule allows it, provided the combined fair market value of every identified property does not exceed twice the value of the relinquished property. A $2M relinquished sale supports an identified list worth up to $4M in total, spread across as many properties as needed. This rule tends to appear when an investor is chasing several smaller assets, such as a handful of Gresham or Hillsboro flex units, rather than one larger replacement. It also gives more room to include a backup candidate or two without worrying about the strict three-property cap, provided the combined pricing math still clears the 200 percent ceiling.
The 95 Percent Rule Investors Miss
A third rule exists for lists that break both of the caps above, and it is the one most sellers have never heard of until it becomes their only remaining option. Under the 95 percent rule, an investor can identify an unlimited number of properties at any combined value, but only if at least 95 percent of the total identified value is actually acquired by day 180. Because that threshold is measured by value acquired, not by count, a single dropped property on an otherwise long list can retroactively disqualify the entire exchange if it pushes the acquired total below 95 percent.
What Counts as a Valid Identification
A valid identification names a specific, unambiguous property, typically a legal description or street address, delivered in writing to the qualified intermediary before midnight on day 45. Verbal mentions to a broker, a property saved in a listing portal, or an email that only references a neighborhood do not satisfy the requirement. Once delivered, the list generally locks, though a revised identification made before the 45-day window itself closes can still replace an earlier one filed days before. A common mistake is delivering the list to a broker or attorney instead of the qualified intermediary directly, which can leave the identification unenforceable even when the paperwork itself is otherwise correct. Regardless of which counting rule ultimately governs a given list, the practical constraint is almost always time rather than the statute itself, so a Beaverton or Tigard candidate that looks clean on paper can still stall on financing if underwriting only begins in the final week.
Common 1031 Exchange Questions
When does the 45-day period actually start?
It starts on the date the relinquished property transfers title, which is usually the recorded closing date, not the date the purchase agreement was signed or funds were wired to the qualified intermediary.
Can I identify more than three replacement properties?
Yes, under either the 200 percent rule, which caps combined value at twice the relinquished property's price, or the 95 percent rule, which requires acquiring at least 95 percent of the identified value by day 180.
What happens if I miss the 45-day deadline?
The exchange generally fails if no written identification is delivered by day 45, and the held proceeds typically become taxable in the year the relinquished property was sold.
Can I change my identified properties after delivering the list?
A replacement identification submitted before the 45-day window itself expires can supersede an earlier one, but once day 45 passes, the list is locked and cannot be revised.
Does identifying a property mean I'm obligated to buy it?
No. Identification only reserves a candidate for the acquisition period; an investor can drop identified properties from consideration as long as the remaining list still satisfies whichever counting rule applies.
