Understanding the Memorandum of Agreement in Real Estate and How to File It
Learn what an MOA does, when to use it, and how to record it properly to protect your deal.
Austin Beverigde
Tennessee
, Goliath Teammate
Are you feeling overwhelmed by the complexities of real estate agreements? You’re not alone. Many people find themselves confused about the Memorandum of Agreement (MOA) and how it fits into their real estate transactions. This guide will clarify what an MOA is and provide a straightforward process for filing it.
Quick Answer: A Memorandum of Agreement in real estate is a document that outlines the terms of an agreement between parties involved in a transaction. To file it, draft the MOA, ensure all parties sign it, and then record it with the appropriate local government office. This process helps protect your interests and provides legal clarity in real estate dealings.
What is a Memorandum of Agreement in Real Estate?
A Memorandum of Agreement (MOA) is a legal document that summarizes the key terms of an agreement between two or more parties in a real estate transaction. While it is not a full contract, it serves as a record of the parties' intentions and can be used to prevent misunderstandings.
Key Components of an MOA
Parties Involved: Names and contact details of all parties.
Property Description: A clear description of the property involved.
Terms of Agreement: Summary of the key terms, including price and conditions.
Signatures: Signatures of all parties to validate the agreement.
Date: The date when the agreement is signed.
How to File a Memorandum of Agreement
Filing an MOA is a straightforward process that involves several key steps. Here’s how to do it effectively:
Step 1: Draft the MOA
Begin by drafting the MOA. Be clear and concise, ensuring all key components are included. You can use templates available online for guidance.
Step 2: Get Signatures
Once the MOA is drafted, present it to all parties for their signatures. This step is crucial as it makes the document legally binding.
Step 3: File with Local Authorities
After obtaining signatures, file the MOA with the appropriate local government office, usually the county recorder or clerk’s office. This step provides public notice of the agreement.
Step 4: Keep Copies
Ensure that all parties retain copies of the filed MOA for their records. This is important for future reference and potential disputes.
Costs Involved in Filing an MOA
The costs associated with filing a Memorandum of Agreement can vary based on location and local regulations. Here are some potential expenses to consider:
Filing Fees: Local government offices may charge a fee for recording the document.
Legal Fees: If you hire an attorney to draft or review the MOA, you may incur additional costs.
Notary Fees: If you choose to have the document notarized, there will be a fee for that service.
Timeframe for Filing an MOA
The timeframe for filing a Memorandum of Agreement can vary based on several factors:
Drafting: Depending on complexity, drafting can take a few hours to several days.
Signatures: Gathering signatures may take a few days, especially if parties are in different locations.
Filing: Once signed, filing with local authorities is usually immediate, but processing may take a few days.
Checklist for Filing Your MOA
Draft the MOA using a clear template.
Ensure all parties review and agree to the terms.
Obtain signatures from all parties.
File the MOA with the local government office.
Keep copies for your records.
Common Mistakes to Avoid
When filing a Memorandum of Agreement, it’s important to avoid common pitfalls:
Inadequate Details: Failing to include all necessary details can lead to confusion and disputes.
Missing Signatures: Not obtaining signatures from all parties can invalidate the agreement.
Not Filing: Forgetting to file the MOA with local authorities can leave your agreement unprotected.
FAQs
What is the purpose of a Memorandum of Agreement?
The purpose of an MOA is to outline the key terms of an agreement between parties in a real estate transaction. It serves as a record to prevent misunderstandings and provides legal clarity.
Is a Memorandum of Agreement legally binding?
While an MOA is not a full contract, it can be legally binding if it includes all necessary elements, such as signatures and clear terms. It’s advisable to consult a legal professional to ensure its enforceability.
How long does it take to file an MOA?
The time it takes to file an MOA can vary, but generally, it can be completed within a few days, including drafting, obtaining signatures, and filing with local authorities.
Can I file an MOA without a lawyer?
Yes, you can file an MOA without a lawyer, especially if you use a template. However, consulting a legal professional can help ensure that the document is properly drafted and enforceable.
What happens if I don’t file the MOA?
If you don’t file the MOA, the agreement may not be recognized by third parties, and it may leave your interests unprotected in case of disputes. Filing provides public notice and legal protection.
