SENATE BILL NO. 300
INTRODUCED BY K. BOGNER, J. ELLSWORTH, J. FIELDER, S. HINEBAUCH, C. KEOGH, M. MACDONALD, J. SMALL, D. ZOLNIKOV
AN ACT GENERALLY REVISING REAL PROPERTY LAWS TO PROTECT REAL PROPERTY RIGHTS; PREVENTING HOMEOWNERS' ASSOCIATIONS FROM IMPOSING MORE ONEROUS RESTRICTIONS ON A PROPERTY OWNER THAN THOSE RESTRICTIONS THAT EXISTED WHEN THE PROPERTY OWNER ACQUIRED THE REAL PROPERTY; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Homeowners' association restrictions -- real property rights. (1) (a) A homeowners' association may not enter into, amend, or enforce a covenant, condition, or restriction in such a way that imposes more onerous restrictions on the types of use of a member's real property than those restrictions that existed when the member acquired the member's interest in the real property, unless the member who owns the affected real property expressly agrees in writing at the time of the adoption or amendment of the covenant, condition, or restriction.
(b) When a member claims the benefit of this subsection (1), the member shall request that the homeowners' association record, or allow recording of, the exception applicable to the member. Upon request by the member, the homeowners' association, the member, or a designee shall record the member's exception with the office of the county clerk and recorder of the county where the real property is situated. The member shall provide the homeowners' association with the date the real property was conveyed to the member and shall pay the recording fees for the document setting forth the exception.
(2) A successor-in-interest to a member's real property may not claim the benefit of subsection (1) to the extent that the homeowners' association entered into, amended, or enforced a covenant, condition, or restriction before the successor-in-interest purchased the real property, even if the covenant, condition, or restriction was not enforceable against the previous owner pursuant to subsection (1), unless the successor-in-interest is owned by or shares ownership with the previous member or unless the successor-in-interest is a lender that acquired the real property through foreclosure.
(3) This section does not apply to a covenant, condition, or restriction:
(a) that is not subject to enforcement by a homeowners' association; or
(b) that is required in order to comply with applicable federal, state, and local laws, ordinances, and regulations.
(4) Nothing in this section may be construed to prevent the enforcement of a covenant, condition, or restriction limiting the types of use of a member's real property as long as the covenant, condition, or restriction applied to the real property at the time the member acquired the member's interest in the real property.
(5) Nothing in this section invalidates existing covenants of a homeowners' association or creates a private right of action for actions or omissions occurring before [the effective date of this act]. However, after [the effective date of this act], unless the member has consented as provided by subsection (1), a homeowners' association may not enforce a covenant, condition, or restriction in such a way that limits the types of use of a member's real property that were allowed when the member acquired the affected real property.
(6) As used in this section, the following definitions apply:
(a) "Homeowners' association" means:
(i) an association of all the owners of real property within a geographic area defined by physical boundaries which:
(A) is formally governed by a declaration of covenants, bylaws, or both;
(B) may be authorized to impose assessments that, if unpaid, may become a lien on a member's real property; and
(C) may enact or enforce rules concerning the operation of the community or subdivision; or
(ii) an association of unit owners as defined by 70-23-102 subject to the Unit Ownership Act.
(b) "Member" means a person that belongs to a homeowners' association and whose real property is subject to the jurisdiction of the homeowners' association.
(c) "Person" means one or more individuals or a legal or commercial entity.
(d) "Real property" has the meaning provided in 70-1-106, except that it is limited to real property governed by a homeowners' association.
(e) "Types of use" means the following lawful types of use of the real property:
(i) use for residential, agricultural, or commercial purposes, unless the use was impermissible according to the written or recorded restrictions;
(ii) the ability to rent the real property, including the land and structures on the real property, for any amount of time; and
(iii) the ability to otherwise develop the real property in accordance with applicable federal, state, and local laws, ordinances, and regulations, unless the ability was impermissible according to the written or recorded restrictions.
Section 2. Restriction on covenants by association of unit owners. An association of unit owners shall abide by the provisions of [section 1].
Section 3. Codification instruction. (1) [Section 1] is intended to be codified as an integral part of Title 70, and the provisions of Title 70 apply to [section 1].
(2) [Section 2] is intended to be codified as an integral part of Title 70, chapter 23, and the provisions of Title 70, chapter 23, apply to [section 2].
Section 4. Severability. If a part of [this act] is invalid, all valid parts that are severable from the invalid part remain in effect. If a part of [this act] is invalid in one or more of its applications, the part remains in effect in all valid applications that are severable from the invalid applications.
Section 5. Effective date. [This act] is effective on passage and approval.
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Prepared by Montana Legislative Services