Michigan Full Discharge of Memorandum of Contract Forms

Michigan statute MCL 565.361 governs the release of a Memorandum of Contract related to land contracts, mortgages, or security assignments.
Here's how it affects the release: If a party has fully fulfilled its obligations under a land contract (e.g., the buyer has paid in full), the seller must execute a conveyance of land or provide a release of security interests.

Requirement to Provide a Release or Discharge: When a land contract mortgage or security assignment is fully satisfied, the party holding the interest (usually the seller or lender) must provide a discharge or release.

Failure or Refusal to Provide a Release: If a party fails or refuses to execute the required release or discharge after full payment, they may be subject to legal penalties and enforcement actions.
Marketability of Title: The statute ensures that once obligations are met and the necessary releases are executed, the property’s title is marketable, meaning it can be freely transferred or sold.

Enforcement & Penalties: If a seller or lender wrongfully withholds a release, the buyer or borrower can seek enforcement through legal action.

Subordination to Other Interests: The statute clarifies that certain real estate interests may take priority over a land contract, affecting the order of enforcement.

Effect on the Release of a Memorandum of Contract: A Memorandum of Contract is often recorded in place of a full land contract to put the public on notice of an agreement. When obligations are fulfilled, this statute requires the release of such a memorandum to clear the title.

Failure to release the memorandum after obligations are satisfied could lead to legal action and possible penalties under this law.