1. Memorandum Removal
Once a deal is successfully completed and the property is sold, you do not need to take any action to remove the memorandum. However, if the contract is canceled for any reason, you must file a memorandum removal or release. Failure to do so can lead to legal action against you for clouding the property's title. This step ensures a clean title for the seller and any future buyers.
2. Why is Memorandum Removal So Critical?
A memorandum must be removed from the public record under specific circumstances.
When the deal is canceled. If, for any reason, the agreement between the wholesaler and the seller is canceled, the wholesaler must file a memorandum removal. Failure to do so can lead to legal action from the seller, who is now unable to sell their property to anyone else because the public record shows a lingering claim on it. This is a critical step to avoid potential litigation. When the property is sold. If the deal successfully closes, the memorandum is automatically removed as part of the closing process. The title company handles this, as the memorandum is paid off or resolved along with any other liens (like a mortgage) on the property. Therefore, there's no need for the wholesaler to file a separate removal document. 3. The Removal Process: How It Works
Removing a memorandum is a quick and simple process, especially in today's digital world.
Electronic Filing: The most common method is electronic filing. The wholesaler can send an affidavit or other designated legal document to a service like E-Docs Recording. Speed: According to the speaker, the process is not a "long process" or a "long wait." Electronic filings are typically processed and recorded within 24 to 48 hours. Cost: The cost is generally per document, not a monthly or ongoing fee, making it an efficient way to handle single-deal transactions. Record-Keeping: The speaker recommends downloading a copy of all filings to a USB or personal storage device, even if the electronic filing service's portal holds them. This is a good practice for maintaining personal records. 4. Does a Memorandum Protect the Wholesaler or the Assignee?
It protects the wholesaler. The memorandum protects the wholesaler's interest in the contract up until the deal closes. It protects the deal. The memorandum is valid and provides protection to the wholesaler until the closing of the deal. The protection is not tied to the wholesaler's LLC but to the deal itself. This is important because a seller can still back out of a contract even if an assignment has been made, and the memorandum ensures the wholesaler's rights are protected until the very end. From signing memorandums to closing, every deal starts with Prexium leads. Secure more deals now 👉
Memorandum Removal