Montana Code Annotated 2023



Part 11. Conversion of Condominium to Townhouse

Effect Of Conversion

70-23-1104. Effect of conversion. Regarding a conversion pursuant to 70-23-1101, the following provisions apply:

(1) (a) A townhome or townhouse unit, including the structural elements and land beneath the unit as described in the surveyed site plan in 70-23-1101(2)(a)(iv), must be considered to be owned in fee simple by the unit owner.

(b) A portion of the land depicted as common area on the surveyed site plan described in 70-23-1101(2)(a)(iv) must be considered to be owned in common by all of the converted townhome or townhouse unit owners. The percentage of the undivided interest of each unit owner in the common area must be considered to be the same as the percentage of undivided interest owned by the owner in the common elements prior to the conversion.

(c) A lien affecting a townhome or townhouse unit is a lien against the fee simple interest of the unit owner in subsection (1)(a) and the undivided interest in the common area described in subsection (1)(b). The conversion, by itself, may not be considered to have an effect on the existing priorities of any liens concerning the converted townhome or townhouse units.

(2) The owners, lienholders, and title insurers may rely on the amended declaration's legal description of the unit provided by the surveyed site plan in 70-23-1101(2)(a)(iv) with regard to the future conveyance of individual townhome or townhouse units.

(3) Section 71-1-108 applies to the fee simple title to the land beneath a townhome or townhouse unit acquired by the mortgagor pursuant to the conversion.

(4) Because the amended declaration must provide for the continuation of the association of unit owners pursuant to 70-23-1101(2)(a)(iii)(B), the unit owners may not be required to form a new association of unit owners.

(5) The townhome or townhouse may not be considered removed from the provisions of this chapter solely by virtue of the conversion.

(6) If the conversion procedures in 70-23-1101 are followed, a unit owner or lienholder may not bring an action concerning the conversion, including a foreclosure based solely on the conversion, against any party associated with the conversion, including but not limited to the association of unit owners, title insurers, escrow providers, or lienholders. A person who brings an action concerning the conversion is liable for damages and attorney fees and costs to defend the action.

(7) If a foreclosure of a unit is conducted using the original condominium legal description in the trust indenture or mortgage, it will result in the foreclosure of the converted townhome or townhouse.

(8) A conversion does not constitute a removal pursuant to this chapter.

History: En. Sec. 4, Ch. 323, L. 2019.