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 use, title, insurability, or financing of a parcel. The following list represents circumstances of a parcel that represent major areas of potential concern. If purchasing an unplatted parcel, check these before committing to a purchase:

  • Survey. Unless there was a subdivision of a larger parcel and you can find the monument corners for your subject parcel, a ground survey or drone mapping flyover is recommended as a contingency of a purchase contract. A ground survey will determine the true boundaries of the parcel, rather than relying on alleged markers like hedges or fences, which frequently are not accurate representations. A drone mapping flyover will allow analysis of topographic and other features.
  • Zoning. Regardless of the parcel’s zoning, you need to know what is allowed, including conditional uses, and whether a variance may be required for your planned use. Visit your county planning department for zoning information.
  • Septic. If your parcel needs septic wastewater treatment onsite, you may need percolation testing. If there are significant rock outcroppings or other obstructions to provision of an underground septic system, particularly with drainage fields (primary and backup) but also with piping, significant additional expense may be determinative of your purchase decision. It may help to check with your potential neighbors for their experience with their land. Oral representations should be gathered as a first step, but should never be the deciding factor in your purchase decision.
  • Water. A person acquires water rights in Montana by diverting water to a beneficial use. Whether diversion is from surface water or from a well, a permit is required from the Montana Department of Natural Resources and Conservation, Water Rights Bureau. If there is a well on your prospective parcel, you will need to contact the Montana Ground Water Information Center for the well driller’s information. The priority of use in Montana is “first in time, first in right.” If drought conditions occur, water shortages could intensify. In that situation, vacant parcels not served by an existing diversion will likely have no water rights.
  • Special needs. Be sure to account for special needs for your planned use, such as physical accommodations for handicapped persons or assessment of public school education.

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

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