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 do not award damages when defects were discoverable through physical inspection or public-record document search.

Unlike other states considered consumer-friendly, Montana is a Buyer Beware state that places a high premium on the ability of the individual to represent their own self interest without relying on the state to step in if a circumstance of the parcel is encountered that they did not anticipate.

There are two notable exceptions to this rule.

  1. Fraud or misrepresentation. The first exception is when a buyer is prevented from inspecting a house for physical defects.
  1. Implied warranty of habitability for new construction. The second exception is when a newly built home doesn’t provide a dwelling that is habitable. The implied warranty of habitability is limited to defects that make a house uninhabitable. For a newly constructed residence, not previously occupied, where the seller is the builder or developer and had the home built for resale, Montana Code requires the provision of a warranty from defects that is at least one year long.

While these exceptions provide buyers some recourse, the remedies are limited. Carefully investigate any parcel before purchasing it.

NOTE: This posting is not legal advice. This information is general in nature. Legal advice is based on specific facts.

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