Homeowners’ associations in Montana are not regulated by a government agency. Instead, most HOAs are set up as nonprofit organizations and are therefore subject to the Montana Nonprofit Corporation Act. In 2019, the state government passed State Bill No. 300 which limits the ability of HOAs to restrict the use of private property; giving more power back to the homeowner.
Since there are no formal regulations regarding HOAs specifically, community rules can vary drastically. Community associations have the freedom to create and enforce as many or as few regulations as they see fit as long as they do not contradict state or federal laws.
Homeowners Association’s Rights and Responsibilities
The primary purpose of an HOA is to protect property values and provide maintenance to any common elements within the community such as streets, sidewalks, pools, and clubhouses. To raise funds for repair costs, the association can impose regular assessments on homeowners according to the community Articles of Incorporation and Bylaws.
If an account becomes delinquent, the HOA has the power to place liens on the property and, in extreme cases, can even foreclose on the property despite on-time mortgage payments.
It is the responsibility of the association board of directors to maintain detailed records including accounting records, member information, minutes to all official meetings, financial statements, the most recent annual report, articles of incorporation, bylaws, and any amendments made. The board is also responsible for preparing an annual report that is to be turned into the Secretary of State.
Homeowners have the sole ability to make amendments to governing documents. The board of directors may propose changes or additions to community bylaws but cannot make them official without the approval of at least 2/3 of association members.
Annual member meetings are mandatory to discuss and vote on any proposed association changes and elect board members. Notice for member meetings must be provided at least 10 days, but no more than 60 days, before the meeting takes place. If notice is sent out via mail, at least 30 days’ notice is required. Special meetings may be called in addition to the annual meetings with a signed petition from at least 5% of the voting power.
Unless otherwise stated in the community Covenants, Conditions, and Restrictions (CC&R), each community member is allowed one vote.
In 2019, the Montana state government passed State Bill 300 that limits HOA power and protects homeowners’ rights to use their property. HOAs can no longer force homeowners to comply with more rigorous restrictions than they agreed to when they purchased the property. If chicken coops were allowed when the property was purchased, the HOA, even with a 2/3-member vote, cannot enforce a restriction on chicken coops for homeowners that did not give their written consent.
For a homeowner to be exempt from new HOA regulations under SB0300, they must request an exemption with the HOA. The HOA will then file the exemption with the county clerk so that it can be officially recorded. The member will be responsible for any filing fees.
Once a property is sold, all exemptions expire.
Community Association Law in MT
HOA rules in Montana vary widely. It is important to read and understand all community regulations before purchasing property in an HOA-managed community. Most homeowners’ associations require the signing of a contract upon purchase.
To ensure that your community association is being run following all state and local laws, it helps to have a professional on your side. CSM has a team of experienced professionals that have worked with communities in almost every state in the US. Specializing in HOA financial management, we can help your board of directors manage association finances, write and submit documents, and prepare for audits. If you have any questions regarding state HOA laws and regulations, give us a call at (865) 315-7505, contact us online or email us at firstname.lastname@example.org.