Memorandum of Land Contract

In depth

A memorandum of land contract is a one or two page summary recorded in the county land records to put the world on constructive notice that a buyer has an equitable interest in the property. It typically lists the parties, the legal description, the date of the contract, and a reference to the unrecorded full agreement. Misconception: many buyers think recording the full contract is required; in most states a memorandum is sufficient and preserves financial privacy. Practically, recording a memorandum protects the buyer against the seller's later sale or refinance, blocks junior liens from leapfrogging the buyer, and supplies a paper trail if litigation arises. Sellers should require the memorandum be released upon default or payoff, and buyers should always record promptly after closing.