What is a memorandum of sale?

A memorandum of sale is a document used in a real estate transaction that outlines the terms and conditions of the sale agreement between the buyer and seller. It is a written record of the key details of the transaction, including the purchase price, the property address, and any contingencies or conditions that must be met before the sale can be completed.

The seller’s solicitor or conveyancer usually prepares the memorandum of sale, and is provided to the buyer’s solicitor or conveyancer. Both parties must agree to the terms outlined in the memorandum before the sale can proceed. Once both parties sign the memorandum of sale, it becomes a legally binding document.

The memorandum of sale is an essential document in the real estate transaction process as it ensures that both parties are clear on the terms and conditions of the sale. It also serves as a record of the agreement in case any disputes or issues arise during the transaction.

FAQ memorandum of the sale

What information is typically included in a memorandum of sale?

A memorandum of sale typically includes the names of the buyer and seller, the property address, the purchase price, and any contingencies or conditions that must be met before the sale can be completed.

Is a memorandum of sale a legally binding document? 

Once both parties have signed the memorandum of sale, it becomes a legally binding document.

Who prepares the memorandum of sale? 

The seller’s solicitor or conveyancer usually prepares the memorandum of sale.

Can changes be made to the memorandum of sale after signing it? 

Changes can be made to the memorandum of sale if both parties agree and sign a revised document.

What happens after the memorandum of sale is signed? 

The conveyancing process begins after the memorandum of sale is signed. This includes conducting property searches, obtaining a mortgage (if necessary), and preparing the transfer documents. Once all of the necessary steps have been completed, the sale can be completed, and the property can be transferred to the buyer.

Is a memorandum of sale required in all real estate transactions? 

No, a memorandum of sale is not required by law in all real estate transactions, but it is a common practice in many countries to use one.

How is the memorandum of sale different from the sales contract? 

The memorandum of sale is a shorter document that outlines the key terms and conditions of the sale agreement, while the sales contract is a more detailed document that includes all of the terms and conditions of the sale.

Can a buyer back out of a sale after signing a memorandum of sale? 

It depends on the specific terms and conditions outlined in the memorandum of sale. If the buyer included contingencies or conditions that allow them to back out of the sale, they may be able to do so. However, if there were no contingencies or conditions allowing the buyer to back out, they may be legally obligated to complete the sale.

Can a seller back out of a sale after signing a memorandum of sale? 

It depends on the specific terms and conditions outlined in the memorandum of sale. If the seller included contingencies or conditions that allow them to back out of the sale, they may be able to do so. However, if there were no contingencies or conditions allowing the seller to back out, they may be legally obligated to complete the sale.

How long is a memorandum of sale valid?

 The validity period of a memorandum of sale depends on the terms and conditions outlined in the document. Some memorandums of sale may have an expiration date, while others may remain valid until the sale is completed or until one of the parties backs out.

Is a memorandum of sale the same as a receipt of deposit? 

No, a memorandum of sale and a receipt of deposit are two different documents. The memorandum of sale outlines the key terms and conditions of the sale agreement, while the receipt of the deposit confirms that the buyer has paid a deposit toward the purchase price.

Can a memorandum of sale be used for a commercial property transaction? 

Yes, a memorandum of sale can be used for any type of real estate transaction, including commercial property transactions.

What happens if there is a dispute over the terms outlined in the memorandum of sale?

 If there is a dispute over the terms outlined in the memorandum of sale, the parties may need to seek legal advice to resolve the issue. The memorandum of sale may be used as evidence in a court of law if necessary.

Can a memorandum of sale be amended or cancelled? 

Yes, a memorandum of sale can be amended or cancelled if both parties agree to the changes and sign a revised document.

Who keeps the original copy of the memorandum of sale? 

The original copy of the memorandum of sale is usually kept by the solicitor or conveyancer who prepared it. However, the buyer and seller may receive a copy of the document for their records.