Articles

Due Diligence Considerations When Buying an HOA Parcel in Montana

Consider the impact of the following documents on your use and enjoyment of an HOA parcel before buying: Homeowner Association Records and Budgets. Financial or other governing entity documents include boards of directors meeting minutes minutes and financial statements. Even a simple three-member road, septic, or water system maintenance agreement should have financial records related to that maintenance. You need to ask for those records for your review and approval within the due diligence period negotiated…

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Considerations on Legal Due Diligence in Montana

Preliminary title reports are the source of basic legal due diligence information. The list of exceptions documents included in the preliminary title report references exceptions to title insurance coverage and, as such, may represent circumstances that could impair the parcel’s value. Typical documents found listed as exceptions documents are deeds, easements, surveys, plat maps, and CC&R’s. Require a minimum of ten days for legal review and evaluation of the preliminary title report, and the exceptions…

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Due Diligence Considerations When Purchasing Outside a Municipality in Montana

The typical buyer of a residential parcel located in a municipality does not run into significant due diligence challenges when purchasing real estate. Parcels located within a municipality with one- to four-unit zoning and created by a platted subdivision require significantly less due diligence because typically: 1) easements are referenced, 2) road access is required, 3) zoning is well-defined, and 4) water, sewer, and power are provided. Outside of a municipality, many circumstances can impede the…

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Seller Disclosures in Montana

Montana law does not provide many protections when it comes to seller disclosures. Sellers may complete a property disclosure form, but Montana does not require it. Montana law requires a seller’s agent to disclose all relevant and material information concerning conditions not known or discoverable by the seller. A seller’s agent is not required to verify statements made by the seller or to inspect the property. A seller’s agent must disclose any adverse material facts…

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Considerations on “Buyer Beware” in Montana

As in other states that are considered “black-letter law” states, Montana real estate contracts are subject to well-established technical legal rules that are no longer subject to reasonable dispute. Montana courts assume as a matter of law that you have performed physical and legal due diligence, are familiar with contract provisions and understand their effect on your transaction, and are generally aware of risks associated with the parcel. Further, as a general matter, Montana courts…

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What is “Notice?”

What is meant by the word “Notice?” In most legal jurisdictions in the United States, there are three types: Actual, Inquiry, and Constructive. Actual. Actual notice is based in sensory experience. If you saw, smelled, heard, felt, or tasted it, you are said to have had actual notice. For example, if you see a road, you have actual notice that the road exists. Inquiry. Inquiry notice is the sensory experience that causes a reasonable person…

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General Considerations When Buying Real Estate in Montana

This article is the first in a series of articles about buying and selling real estate in Montana. These considerations are not legal in nature, but are general recommendations based on over twenty years of real estate experience both as a Realtor® and as a real property attorney in the Inland Northwest. Because buyers and sellers, wherever they live, generally buy or sell real estate less than four times in their lifetime, and a real…

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Exclusions & Exceptions to Title Insurance

Why are Exclusions and Exceptions to Title Insurance so important? The standard title insurance form used in whole or part by industry participants is the 2006 Owner’s Policy of Title Insurance produced by the American Land Title Association. The standard ALTA insurance form starts with the following language: “American Land Title Association Owner’s Policy Adopted 6-17-06 COVERED RISKS  SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B (bold italics added) AND THE CONDITIONS,…

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Special Exceptions to Title Insurance

Title insurance insures against risks incurred to title when you buy land. However, when you read through a title insurance policy, you’ll find that certain risks are not covered. These uncovered risks to title are colloquially called “special exceptions.” Background The American Land Title Association (ALTA) is the national trade association for the title insurance industry. Founded in 1907, the Association has developed a set of forms, the ALTA title insurance forms, used voluntarily by title insurers across the…

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What is a Title Search?

What is a Title Search? What is a title search? A title search is a report of the public documents record, typically performed by a title company, regarding a specific parcel of land. The search involves documents located in the Recorder’s Office of the county the property is located in. These documents may include: Mortgages Deeds Rights of way Covenants Judgments affecting the title to, or the use of, the property The results of the…

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