Nevada Memorandum of Contract of Sale

In Nevada, a Memorandum of Contract of Sale (also called a Memorandum of Agreement or Memorandum of Land Contract) is a valuable legal tool used to publicly document the existence of a real estate contract—without recording the full contract itself. It's especially important in transactions involving installment contracts, delayed closings, or equitable interests. Here's a breakdown of why and when to use it:

WHY Use a Memorandum of Contract in Nevada
1. Protect Buyer’s Equitable Interest
In land contracts or contracts with delayed transfer of title, the buyer gains an equitable interest before legal title is conveyed. A memorandum:
Protects the buyer by giving constructive notice to third parties.
Prevents the seller from fraudulently reselling or encumbering the property.

2. Avoid Recording the Full Contract
The actual contract may contain:
Private financial terms,
Personal agreements,
Or contingencies not intended for public view.
The memorandum is a summary—it protects privacy while putting the world on notice.

3. Prevent Title Problems
If a buyer records a memorandum and the seller tries to sell the property again, a title company will see the memorandum and flag it as a cloud on title.
This discourages improper resale or further encumbrance by the seller.

4. Assist with Financing or Assignments
A recorded memorandum can help the buyer show lenders, investors, or assignees that they have an interest in the property.
Especially useful in assignable land contracts or "subject-to" financing scenarios.

WHEN to Use a Memorandum of Contract in Nevada
Use a Memorandum at the time of contract execution or shortly after, especially in these situations:

Installment Sale / Land Contrat----------Buyer has equitable interest for years before title passes

Delayed Closing----------Contract is signed but closing may take months or years

Buyer is making improvements before closing----------Protects buyer’s interest during occupancy

Buyer intends to assign contract----------Recorded memorandum signals to assignees and lenders there’s a valid interest

Contract allows for possession before title transfer----------Prevents seller from misusing ownership during possession period

Seller has multiple obligations (like probate or divorce)----------Ensures the buyer’s interest is visible despite seller’s legal entanglements

Legal Basis in Nevada:
NRS 111.315: Recording documents provides constructive notice—protecting against future purchasers.

Nevada is a race-notice jurisdiction: priority goes to a subsequent purchaser only if they’re without notice and record first. The memorandum defeats that.

Purpose:
Protecting buyer’s interest---------Title passes later, but buyer pays or occupies now

Privacy---------You want to avoid disclosing full contract terms

Notice to third parties----------You want the public record to reflect buyer’s claim

Assignment / lending----------You need a recordable instrument to show interest

Legal leverage----------You want to cloud title if seller attempts to breach

FOR USE IN NEVADA ONLY.