Memorandum of Contract

A memorandum of contract is a short document recorded in county land records to give public notice that a purchase contract exists on a property.

A memorandum of contract is a short document recorded in the county land records to give public notice that a purchase contract exists on a property. It does not restate the whole deal — usually just the parties, the property's legal description, and the fact that a contract is in force. Once recorded, it shows up in any title search, which means a title company will not close a competing sale without dealing with it first.

That is the point. Say you contract a house at $140,000 and a competing investor knocks on the seller's door offering $150,000. Without a memorandum, the seller might just sign with them and close before you find out. With one recorded, the second buyer's title search surfaces your contract, the closing stops, and your equitable interest in the deal is protected while you enforce your agreement or negotiate a resolution.

What beginners get wrong: using the memorandum as a weapon instead of a shield. A recorded memorandum is a cloud on title, and recording one without a valid contract — or refusing to release one after a deal dies — can expose you to a slander-of-title claim and real damages. Record it to protect a legitimate deal you intend to perform on, release it promptly when the deal ends, and follow your county's recording requirements, which vary. This is not legal advice.