(a) An agreement authorized by this chapter may be recognized, registered and reinstated in the same manner and with the same effect as the transfer of real estate, except that the protocol will no longer be known to any person for any purpose, two years after the date on which the agreement is registered or reseeded. The registration of the agreement protects the parties from certain types of acts of persons who have not signed the agreement, but who have some claim against the property or against one of the owners. The most common problem of this type is when a creditor tries to collect from one of the owners, and the most dangerous situation is where there is a bankruptcy or a tax guarantee. The agreement protects an owner who is not bankrupt or in debt from creditors, bankruptcies and pawn rights to which the other owner is associated. b) In lieu of the registration of the agreement, a memorandum executed by the parties to the agreement may contain at least the following information: the names of the contracting parties, a description of the property and a declaration that, under this chapter, an arbitration agreement has been concluded concerning that property. Such a memorandum, if recognized and registered or reinstated in the same way as a transfer of real estate, has the same effect as if the agreement itself had been registered or reseeded. To illustrate a disaster frequent enough to avoid the MOU, imagine a situation in which two people agree to share a property equally, but the owner pays 80% of the down payment. The co-owners have an agreement that the owner who paid less of the down payment will reimburse the other owner if the property is sold. Subsequently, the owner, who has paid less down payment, goes bankrupt and his share of the property is taken over by a liquidator. As a general rule, under federal law, the agent is not bound by the agreement, which means that the agent could tax the sale of the property and take over half of the proceeds without repaying the down payment credit.
A properly drafted and recorded Memorandum of Understanding prevents this catastrophic result in most cases. For the Memorandum of Understanding to work, authenticated notarial, and recorded in the public records of the county where the property is located. If the MOU is not mentioned in the district files, it will be useless. In addition, there must be an agreement signed and separated from the agreement. Note that the agreement does not describe what the parties have agreed; their agreement is private and should not be included in public registers. The Memorandum of Understanding contains only the important legal language that produces a „constructive reference” and makes the waiver of sharing rights more effective.