In Pennsylvania, a Release of Memorandum and Notice of Agreement is typically used to formally terminate or release a previously recorded Memorandum of Contract (also called a Notice of Agreement). This document is filed with the county recorder's office to clear any claim or cloud on the property title that resulted from the initial memorandum. Here's why and when it should be used:

Why is a Release of Memorandum and Notice of Agreement used?
Clear the Property Title: When a Memorandum of Contract or Notice of Agreement is recorded, it puts the public on notice that a contractual agreement exists regarding a specific piece of property. This can "cloud" the property’s title, making it difficult for the owner to sell or refinance the property. A release removes that cloud.

End a Legal Obligation: If the contract between the buyer and seller (or parties involved in the agreement) is terminated, canceled, or fulfilled, the Memorandum of Contract is no longer relevant, and recording a release ensures that no one can claim that the property is still bound by that agreement.

Avoid Potential Disputes: By recording a release, the parties involved are formally acknowledging that the agreement has been discharged, preventing future disputes regarding the validity or enforceability of the initial contract.

When should a Release of Memorandum and Notice of Agreement be used?
After a Contract is Fulfilled or Closed: If the terms of the original contract (e.g., a real estate purchase agreement) have been fully performed (e.g., the sale has closed), the memorandum is no longer needed, and releasing it ensures the title is clear.

If a Deal Falls Through: If the contract is terminated or canceled before the deal is completed (e.g., the buyer or seller backs out, or there’s a mutual agreement to cancel), a release is necessary to officially reflect that the agreement is no longer in effect.

Upon Request of the Parties: Sometimes, a party may request that the memorandum be released to facilitate a new transaction (e.g., a new buyer is interested, or refinancing is needed), and clearing the title is essential for moving forward.
What Happens If a Release Is Not Filed?

Clouded Title: If a Memorandum of Contract is not released, it can cloud the title, making it difficult or impossible for the property owner to sell or finance the property.

Legal Issues: The existence of a recorded Memorandum can lead to legal disputes or claims that the agreement is still valid, even if the underlying contract has been terminated.

Process to File a Release: Draft the Release of Memorandum: This legal document typically needs to reference the original Memorandum of Contract, including the recording details (Instrument #, etc.).

Signatures: The release should be signed by the appropriate parties (usually both the buyer and seller or other parties to the original agreement).

Notarization: The document should often be notarized before it is filed.

File with County Recorder’s Office: The release is then recorded with the local county recorder’s office where the original Memorandum was filed, clearing the title.

In summary, a Release of Memorandum and Notice of Agreement is used in Pennsylvania to formally remove a previously recorded memorandum from the public record once the associated contract is no longer in effect. It ensures that the property's title is clear, facilitating future transactions and avoiding legal complications.

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