Senate bill NO. 247

INTRODUCED BY S. Fitzpatrick

By Request of the ****

A BILL FOR AN ACT ENTITLED: "AN ACT REVISING COVENANT LAWS; PROVIDING THAT THE 8-YEAR STATUTE OF LIMITATIONS FOR OBLIGATIONS ON A CONTRACT APPLIES TO COVENANTS; limiting who may initiate legal action to enforce covenants; revising when a covenant is deemed abandoned; limiting when covenants may be enforced if a governing body has not met for a period of time; AMENDING SECTION 27-2-202, MCA; and providing an immediate effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Covenant enforcement and abandonment. (1) Only the governing body of a development or a parcel owner within a development can initiate a legal action to enforce covenants, conditions, or restrictions.

(2)        A covenant, condition, or restriction is deemed abandoned for purposes of enforcement if no enforcement action has been undertaken for the prescribed period in 27-2-202. Once a covenant, condition, or restriction is abandoned pursuant to this section, the governing body is precluded from undertaking a different interpretation or enforcement action against a similarly situated parcel owner in the same development.

(3)        When the governing body formed within covenants, conditions, or restrictions has not met for a period of 15 years, it constitutes substantial noncompliance, and the governing body is prohibited from taking any enforcement action regarding the covenants, conditions, or restrictions recorded against the land to the extent the covenants, conditions, or restrictions are not otherwise necessary to comply with applicable federal, state, and local laws, ordinances, and regulations.

Section 2. Section 27-2-202, MCA, is amended to read:

"27-2-202. Actions based on contract or other obligation. (1) The period prescribed for the commencement of an action upon on any contract, covenant, obligation, or liability founded upon on an instrument in writing is within 8 years.

(2)        The period prescribed for the commencement of an action upon on a contract, account, or promise not founded on an instrument in writing is within 5 years.

(3)        The period prescribed for the commencement of an action upon on an obligation or liability, other than a contract, account, or promise, not founded upon on an instrument in writing is within 3 years."

Section 3. Codification instruction. [Section 1] is intended to be codified as an integral part of Title 70, chapter 17, part 2, and the provisions of Title 70, chapter 17, part 2, apply to [section 1].

Section 4. Effective date. [This act] is effective on passage and approval.