What is a Memorandum of Sale?
A memorandum of sale is a legal document that specifically records the details of a sale of property. It usually includes the following: the names of both the seller and the buyer, and the solicitors that are representing both parties. The documents will also contain details of transaction.
It is an important legal document as it contains key information on a property sale for all parties and is a first port of call for any cross referencing.
The memorandum of sale is usually issued to the relevant parties as soon the sale has been confirmed. It should be circulated as quickly as possible – nowadays it is usually emailed as this is the fastest method.
Although the memorandum of sale is not legally binding and either party could still pull out after it is issuedIt can take two or three months for the sale to complete after the issue of the memorandum of sale.
Why is a memorandum of sale important?
Signing a memorandum of sale is usually seen as the first step of the buying/selling process. As previously stated it is not a legally binding document, but it can be said to be a precursor to the sales contract and plays an extremely important part in the initial motions leading towards completion. Many property sales are initially agreed over the phone and because of this a memorandum of sale provides evidence of this agreement.
Issues with a memorandum of sale
Many problems occurring at this stage of the process are a result of buying within a property chain. A property chain occurs when the seller or buyer’s ability to complete the transaction depends on another sale.
Although the memorandum of sale can seem overwhelming, as it contains so much information, it is an important document that allows all parties to familiarise themselves with the terms of sale. It is, however, recommended that you seek legal advice to clarify the content of the document.