In Montana, selling a house means you have to get familiar with the seller’s property disclosure statement and requirements. Although Montana is a “non-disclosure state”, sellers still have to disclose property defects to the prospective buyers. Since it’s the seller’s responsibility to disclose these known defects that could affect the sold home’s quality.
Montana’s statutes require a few mandatory disclosures—and much more of the seller’s property disclosure statement. And typically, the buyer must inspect and confirm the mentioned issues in the form. If you’re not sure what to disclose and don’t know other provisions the Montana law requires, here’s a quick guide you can read.
Here are the three disclosure requirements you need to know if you are selling a property in Montana:
- Federal Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards
- Montana Seller’s Property Disclosure Statement
- Fiduciary Relationship
Residential Lead-Based Paint Hazard Reduction Act
The Residential Lead-Based Paint Hazard Reduction Act passed in 1992 requires the disclosure of any lead-based paint or chipped paint in any housing built before 1978.
Every purchaser of residential real estate property built before the year 1978 is notified and obligated to comply with the disclosure of information on lead-based paint hazards. Lead-based paint and/or Lead-based Paint Hazards may cause a serious health risk to children that could cause “permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory.” A risk assessment for lead-based paint is essential and must be implemented to prevent lead poisoning. Sellers should provide the buyer with any information/pamphlets on lead-based paint hazards.
The home seller is given a 10-day period to perform a paint inspection or risk assessment for lead-based paint or any related hazards. To get a lead hazard inspection certified (EPA administers) firm, you can visit this site here.
Montana Seller’s Property Disclosure Statement
According to the Montana Code Annotated (M.C.A. 37-51-102(23), the seller’s agent is required to disclose to the seller all relevant and material property defects to the Property Disclosure Statement. With the seller’s agent’s best knowledge concerning the said transaction “that is known or discoverable by the seller” (M.C.A. 37-51-313(2)(c). Besides, the seller’s agent must also notify the buyer of any “adverse material facts” that could harm the quality of property or the person’s decision to continue with the contract or transaction. M.C.A. § 37-51-313(3)(a).
Here is the following information that a seller should disclose as required by the state and to Montana seller’s disclosure property disclosure statement or requirements.
Refrigerators, Microwave, Range, Dishwasher, Garbage Disposal, Oven, Trash Compactor, Freezer, Washer, Dryer
Components and Built-in Systems
Water Softener, Water Conditioners, Exhaust Fans, Central Vacuum System and Components, Water Heater, Ceiling Fan, Intercoms, Washer/Dryer Hookups, T.V. Antenna, Remote Controls, Satellite Dish, Central Sound Systems, Wiring for Phone, Cable and Internet, Security Alarms, Smoke Detectors, Fire Alarms, Garage Door Openers, and Security Gates
Wiring, Outlets, Switches, Services, Shorts, Alterations, and Overloads
Pipes, Drains, Faucets, Fixtures, Sump Pumps, and Toilets
Heating, Ventilation and Air-Conditioning Systems
Includes Furnaces, Central Air Conditioning, Compressors, Heat Pumps, Electrical Heating Systems, Solar Systems, Gas Leaks, Thermostats, Wall/Window AC Evaporator Coolers, Humidifiers, Propane Tanks
Additional Heat Sources
Gas, Pellet, Wood Stoves or Fireplaces — Compliance with Air Quality Laws, Chimney Cleanliness, Chimney Fires and Adherences to Codes in Installation
Walls, Ceiling, Utility Bills, Vapor Barrier, and Formaldehyde or Asbestos Insulation
Other Basic Components
Interior Walls, Ceilings, Exterior Walls, Floors, Windows, Doors, Window Screens, Slabs, Driveways, Sidewalks, Fences
Leakage, Flooding, Evidence of Water or Moisture, and Fuel Tanks
Footings, Depth, Cracking, and Reinforcement
Rain Gutters, Deterioration, Leakage, Ice Build Ups and Structural Condition
Well Production, Water Quantity, and Quality Abandoned Wells and Water Rights
Pools, Outdoor Living, Ancillary Buildings
Window Screens, Pool, Spa, Pool/Spa Heater, Hot Tub, Sauna, Patio/Decking, Built-In Barbecue, Gazebo, Fountains, Water Features, Underground, Sprinklers Systems and Controls, Partially Landscaped or Un-landscaped Yard, Garage, Shop, Barn, Carport
Waste Dump or Disposal or Landfill or Gravel Pit or Commercial Use in the Property
Existing or proposed, which may cause smoke, smell, noise, or other nuisance, annoyance, or pollution.
If the property is not on a public street note any Driveway Agreements, Private Easements, and Legal Disputes Concerning Access
Hazard Insurance/ Damages/ Claims
If the property is inhabitable real property as defined in the Montana Radon Control Act. Owner represents that to the best of Owner’s knowledge the Property has or has not been tested for radon gas and/or radon progeny and the property has or has not received mitigation or treatment for the same. If the property has been tested for Radon Gas and or Radon Progeny, attached are any test results along with any evidence of mitigation or treatment.
If the Property is inhabitable real property as defined in the Montana Mold Disclosure Act, the Owner represents to the best of Owner’s knowledge that the Property has or has not been tested for mold and that the Property has or has not received mitigation or treatment for mold. If the Property has been tested for mold or has received mitigation or treatment for mold, attached are any documents or other information that may be required under Montana law concerning such testing, treatment, or mitigation.
If the Property is inhabitable real property, the Owner represents to the best of Owner’s knowledge that the Property has or has not been used as a clandestine Methamphetamine drug lab. If the Property has been used as a clandestine Methamphetamine drug lab, attached are any documents concerning the use of the Property as a clandestine Methamphetamine drug lab.
Note: Read and review the disclosure form carefully before marking yes or no. Answer each aspect of the property defect to the best of your knowledge. If in doubt, you can contact your real estate agent or lawyer for a bit of advice or opinion.
Although there’s a seller’s disclosure to be completed, the buyer still has to investigate potential issues with the property. The Montana statutes typically implement the caveat emptor or buyer beware clause in the sales contracts which means it’s not the seller’s obligation to fix the discovered defects if the buyer ever finds one after purchasing.
However, there are two significant exceptions to the caveat emptor rule buyers and sellers should know. First is if a home seller intentionally prevented or barred a buyer from performing a house inspection to verify the defects M.C.A. §§ 27-2-102(3)(b).
Second is the so-called implied warranty of habitability (implemented by the Montana Supreme Court during 1982). Essentially, it’s the builder’s responsibility to discover and prevent property issues or harms—and thus be liable under an implied warranty of habitability. The buyer then could sue the builder for certain defects—soil condition, broken windows, bent plumping, cracked walls, or destroyed floors—although the builder reported a guarantee that the house was “constructed in a workmanlike manner and is suitable for habitation.” Chandler v. Madsen 197 Mont. 234, 249, 642 P.2d 1028, 1031 (1982).
Furthermore, regarding the disclosure and warranty requirements, or to “the sale of a newly constructed residence that has not been previously occupied and where the seller is the builder or a developer who has built or had the residence built for the purpose of resale”, the Montana Code gives “an express warranty that is valid for a period of least 1 year from the date of the sale of the residence.” (M.C.A. § 28-2-2202)
A fiduciary relationship means the seller places confidence and reliance on the prospective buyer. It’s a kind of affiliation that puts one person a sense of legal duty or delegated trust for the benefit and interest of the other party. In this sense, this requires good faith and honesty—which also needs different requirements.
Since there are different types of fiduciary relationships, you have to contact or talk to your real estate agent or attorney to what kind of disclosure you have included.
The Montana Code Annotated 72-31-414: Fiduciary and Authority posits that “the legal duties imposed on a fiduciary charged with managing tangible property apply to the management of digital assets, including (a) the duty of care; (b) the duty of loyalty; and (c) the duty of confidentiality.”
What if the seller fails to disclose any of this information to the buyer?
If found guilty of intentionally misinterpreting any information, the buyer could take legal action to the buyer. This means the transaction could not be continued or the home sale is voided in consequence. As such, the seller will have to pay for substantial monetary damages and must take full responsibility for the court costs.
The Montana law doesn’t condone dishonesty or misleading of any material information when selling a property. Such an act isn’t advisable and could end up losing a lot of reputation and money from you. To avoid any legal trouble, you should honestly disclose any known defects to the prospective buyer. If you’re not familiar with the provisions of law stated, you can contact your real estate attorney or agent for professional advice or opinion.
Note: All the information mentioned above is just a guide for real estate sellers in Montana. It is still best to seek legal advice from experts if you have any clarifications.
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