A Release of Memorandum of Contract (or Release of Memorandum of Purchase Agreement) can be executed by Buyers and Sellers and is typically executed by the seller to formally cancel or release the notice of a purchase agreement that has been recorded in the public records. Here are the key reasons why a seller should execute a Release of Memorandum of Contract:

1. Clearing Title for Future Sales When a Memorandum of Purchase Agreement is recorded in the public records, it creates a cloud on the title, which could prevent the seller from selling the property to another buyer or refinancing it. If the original purchase agreement is terminated (due to failure to close, breach of contract, or mutual cancellation), executing a release is necessary to remove any claims or encumbrances tied to that agreement. Without a release, the public record would still show that the property is under contract, potentially causing future buyers or title companies to hesitate in moving forward with another sale.

2. Preventing Future Legal Disputes Failing to execute a release of the memorandum could lead to legal disputes if a buyer claims they still have an interest in the property. By executing a release, the seller clearly indicates that the previous agreement has been canceled or fulfilled, preventing any future claims by the buyer under that contract. Often the buyer requests a release when the subject contract is fulfilled, allowing them to refinance or sell.

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