US Montana Broker License Exam Set Two

The legal principle guiding this scenario is found in Article II, Section 29 of the Montana Constitution, which mandates that private property shall not be taken or damaged for public use without just compensation paid for the full extent of the loss. In cases of a partial taking, such as the one described, the calculation for just compensation is not limited to the fair market value of the land that is physically acquired by the government. Instead, it must encompass two primary components. The first is the fair market value of the portion of the property that is actually condemned and taken. The second, and critically important, component is severance damages. Severance damages represent the diminution in market value of the property that remains with the owner after the partial taking. These damages arise because the remaining parcel may have been reduced in size, had its shape altered, lost access, or been negatively impacted in its utility and overall value due to the separation or the nature of the public project. In this case, bisecting the ranch separates the operational center from essential grazing land and a water source, which demonstrably reduces the value and utility of the remaining property. Therefore, the full extent of the loss includes not only the value of the condemned strip but also the financial damage inflicted upon the remainder of the ranch.

The core legal principle at issue is the Montana statute of limitations for trespass on real property. According to Montana Code Annotated section 27-2-207, the period prescribed for the commencement of an action for injury to or trespass on real property is two years. An encroachment, which is the unauthorized physical intrusion onto an adjoining property, is legally considered a form of trespass. In this scenario, the neighbor’s concrete patio has been encroaching on the property for seven years. The cause of action for the trespass arose when the patio was constructed and first encroached upon the land. The two-year window to file a lawsuit to compel the removal of the encroaching structure began at that time. The fact that the property was sold to a new owner does not restart or toll the statute of limitations. Since seven years have passed, the two-year period has long since expired. Therefore, the new owner’s legal right to force the neighbor to remove the patio through a trespass lawsuit is likely extinguished. While the encroachment remains a cloud on the title and a material fact, the specific legal remedy of a forced removal via a trespass action is barred by the passage of time. This is distinct from a potential claim of adverse possession, which has a five-year statutory period in Montana but also requires the claimant to have paid all taxes levied and assessed upon the disputed property during that period, a condition rarely met in simple encroachment cases.

No binding contract was formed between Elias and Anya. The analysis begins with Anya’s initial offer. When Elias received this offer and changed a material term—the closing date—he did not accept the offer. Under Montana contract law, this action constituted a rejection of Anya’s original offer and the creation of a new offer, known as a counteroffer. This is an application of the mirror image rule, which requires an acceptance to be an unconditional agreement to the exact terms of the offer. Any modification creates a counteroffer, which terminates the original offer. Consequently, the irrevocability period mentioned in Anya’s original offer became null and void as her entire offer was terminated. The new offer on the table was Elias’s counteroffer, which Anya now had the power to accept or reject. However, an offeror retains the right to revoke their offer at any point before it is accepted by the offeree, provided the revocation is communicated. In this scenario, Elias, through his broker, communicated the revocation of his counteroffer to Anya’s broker. This communication occurred before Anya communicated her acceptance. The revocation was effective upon receipt by Anya’s agent. Therefore, when Anya’s broker later attempted to communicate her acceptance, there was no longer a valid offer to accept. The offer had been extinguished by the prior revocation. Without a valid offer and a corresponding acceptance, there is no mutual assent or “meeting of the minds,” which is an essential element for the formation of a legally binding contract. Elias is therefore not bound to Anya and is free to accept the other party’s offer.

The legal analysis hinges on Montana Code Annotated (MCA) 37-51-313(5)(a), which explicitly requires that any written agreement for the sale of real estate, including a listing agreement, must contain a definite expiration date. The termination clause in the scenario states the agreement is effective “until the property is sold or until terminated by mutual written consent.” This language does not provide a specific calendar date for termination and is therefore considered indefinite. According to Montana law, a listing agreement that fails to include a definite expiration date is void and unenforceable from its inception. It is not merely voidable or subject to interpretation as a different type of listing. Because the entire contract is void, all of its provisions, including the clause detailing the broker’s commission, are also unenforceable. The broker cannot legally compel the seller to pay a commission based on an agreement that violates a fundamental statutory requirement. This rule is in place to protect consumers from being locked into perpetual or unexpectedly long-term agreements with brokers and ensures clarity and certainty for all parties involved. A broker using such an agreement is in violation of Montana license law and could face disciplinary action from the Montana Board of Realty Regulation.

The core of this problem is to distinguish between a general lien and a specific lien and to understand the scope of a judgment lien in Montana. 1. Identify the lien type: A lien created by a court decision in a lawsuit is a judgment lien. 2. Classify the lien: A judgment lien is a general, involuntary, statutory lien. It is general because it does not arise from a debt related to a specific asset. Instead, it arises from a general obligation established by the court. 3. Determine the scope of attachment: A general lien attaches to all property, both real and personal, owned by the debtor within the jurisdiction where the lien is recorded. In this case, the judgment lien from the Montana District Court, once properly docketed, will attach to all of Alistair’s real property in Gallatin County. This includes his primary residence in Bozeman and his rental cabin near Big Sky. It also attaches to his non-exempt personal property, such as the antique vehicles. 4. Conclusion: The lien is not limited to a single piece of property or only to personal property; it encumbers all of the debtor’s assets in the county. In Montana real estate law, it is crucial to understand the distinction between different types of encumbrances, particularly liens. Liens can be classified as either specific or general. A specific lien attaches to a single, particular piece of property. Common examples include a mortgage, where the loan is secured by the specific house being purchased, or a mechanic’s lien, which is filed against the specific property where construction work was performed but not paid for. The debt is directly tied to that asset. In contrast, a general lien is a claim against all property owned by a debtor, not just one specific item. It attaches to all real and personal property the debtor holds within the county where the lien is recorded. Judgment liens, which result from a court’s final decision in a lawsuit, are a prime example of a general lien. The underlying lawsuit in this scenario was for a business contract breach, unrelated to any specific real estate. Therefore, the resulting judgment lien does not target a single property. Once Beatrice dockets the judgment with the Clerk of the District Court, it encumbers all of Alistair’s real property in that county and his personal property, making it a powerful collection tool that affects his ability to sell or refinance any of his assets.

This is a conceptual question and does not require a mathematical calculation. The Public Land Survey System, or PLSS, which is the standard for legal descriptions in Montana, is based on a grid of lines. The primary north-south lines are called principal meridians, and the primary east-west lines are called base lines. From this intersection, the land is divided into squares called townships, which are six miles by six miles. These townships are further divided into 36 one-mile-square sections. A standard section contains 640 acres. However, a fundamental challenge in projecting a square grid onto a spherical surface like the Earth is the convergence of longitude lines. In the PLSS, the north-south lines, known as range lines, are not perfectly parallel; they converge as they extend northward toward the North Pole. To manage this convergence, the system incorporates correction lines, typically every 24 miles north and south of the base line. Adjustments are made along these lines. The inaccuracies and discrepancies caused by this convergence are systematically pushed to the north and west boundaries of each township. Consequently, the sections along the northern and western tiers of a township, specifically sections 1, 2, 3, 4, 5, 6, 7, 18, 19, 30, and 31, are often fractional and do not contain exactly 640 acres. These irregular parcels are often designated as government lots. This is a planned feature of the survey system, not an error.

The core principle at play is situs, also known as area preference. This economic characteristic of land is often considered the most significant factor in determining property value. Situs refers to the value people place on a specific location due to economic, social, and environmental factors, rather than the physical attributes of the land itself. In this case, the parcel near a major Montana city and recreational hub possesses a high degree of situs. Its proximity to employment centers, educational institutions, and desirable amenities creates a strong preference among potential buyers and renters. This preference translates directly into higher economic value and potential for profit, even if the land itself has physical disadvantages like being rocky or having limited water rights. The other parcel, despite its superior physical qualities like size and fertility, suffers from a lack of situs due to its remote location. The investment decision is driven by the economic advantages conferred by the location’s desirability, which outweighs the physical characteristics of the land. This illustrates that in real estate, the adage “location, location, location” is a direct reference to the power of situs. Permanence of investment and scarcity are also relevant economic concepts, but situs is the primary driver behind the specific choice made between these two distinct parcels.

The buyer’s ability to enforce the seller’s verbal promise is extremely limited under Montana law. The foundational principle is the Statute of Frauds, specifically MCA 28-2-903, which mandates that contracts for the sale of real property must be in writing to be enforceable. While the initial Buy-Sell Agreement meets this requirement, the core issue is the subsequent verbal modification. Montana Code Annotated 28-2-1602 directly addresses this, stating that a contract in writing may be altered only by another contract in writing or by an executed oral agreement. An “executed oral agreement” is one where the terms have been fully performed. In this situation, the seller’s promise to leave the personal property was an oral agreement attempting to alter the written contract. Because the seller did not perform the promise—he removed the boat lift—the oral agreement was not executed. Therefore, it is not a valid and enforceable modification of the written Buy-Sell Agreement. The presence of an integration clause further strengthens the seller’s position by formally declaring that the written document represents the entire and final agreement between the parties, superseding all prior or contemporaneous discussions and promises. A court would almost certainly look to the four corners of the written agreement, which did not include the boat lift, and find the subsequent, unexecuted oral promise to be unenforceable.

The legal analysis proceeds as follows: 1. Identify the nature of the estate conveyed by Amelie to the historical society. The specific language used in the deed, “for so long as the property is maintained as a public museum,” is crucial. This phrasing creates a fee simple determinable estate. 2. A fee simple determinable is a type of defeasible fee that automatically terminates upon the occurrence of a specified event or the violation of a stated condition. The grantor retains a future interest known as a possibility of reverter. 3. The condition for the estate is that the property must be “maintained as a public museum.” 4. The historical society’s action of ceasing museum operations and leasing the property for commercial retail constitutes a clear breach of this condition. 5. Due to the nature of a fee simple determinable, the moment the condition was breached, the estate held by the historical society automatically terminated. 6. Consequently, title to the property automatically reverted to the grantor, Amelie. No legal action is required for the title to revert, although an action to quiet title may be necessary to make the reversion a matter of public record. Amelie’s interest, the possibility of reverter, became a present possessory estate in fee simple absolute. This situation is distinct from a fee simple subject to a condition subsequent, which would use language like “on the express condition that” or “provided that.” In that case, the grantor would hold a right of entry, and the termination of the grantee’s estate would not be automatic; the grantor would have to take affirmative action, such as filing a lawsuit, to reclaim the property. The “for so long as” language is the key determinant here, triggering an automatic reversion of title upon the breach of the condition, vesting a fee simple absolute estate in Amelie.

Step 1: Identify the legal status of the pre-existing airstrip. The airstrip was legally established and in continuous operation before the county enacted new zoning that prohibits it. This classifies the airstrip as a legal nonconforming use. Step 2: Analyze the developer’s proposed action. The developer intends to subdivide the surrounding land and integrate the airstrip as an amenity for the residents of the new \(25\)-lot community. Step 3: Apply the legal principles governing nonconforming uses in Montana. The core principle of nonconforming use is that while the use is “grandfathered” and allowed to continue, it is disfavored by zoning law. The long-term goal of zoning is to eventually eliminate such uses. Consequently, the law places strict limitations on them. A nonconforming use may not be enlarged, expanded, or intensified. Changing the use from a small private strip for a single owner to an amenity for \(25\) different homeowners would be considered a significant intensification and expansion of that use. Step 4: Evaluate the interaction with subdivision regulations. Under the Montana Subdivision and Platting Act (MSPA), a local governing body must approve the subdivision plat. The governing body cannot approve a plat that proposes an illegal land use. Since the expansion of the nonconforming airstrip use is illegal, the subdivision plan as proposed would be rejected on these grounds. While environmental and sanitation reviews by the Department of Environmental Quality are mandatory for subdivisions, they address different aspects of the development. The fundamental inability to legally expand the nonconforming use is the primary obstacle to the specific plan involving the airstrip’s continued operation as an amenity for the new community.

The agreement between Elias and Chandra is best classified as unilateral, express, and executory. A unilateral contract is formed when one party makes a promise in exchange for the other party’s performance of a specific act. Here, Elias promised to pay a commission in exchange for the act of Chandra finding a suitable buyer. Chandra was not obligated to search for a buyer, but by performing the act, she accepted the offer and formed the contract. It is not a bilateral contract, which would involve an exchange of promises, such as Chandra promising to use her best efforts to find a buyer. The contract is express because the terms were explicitly stated in words by Elias. He clearly articulated the required performance (finding a buyer at a specific price) and the compensation (a five percent commission). This is distinct from an implied contract, where the agreement would be inferred from the parties’ conduct and actions rather than their words. Finally, the contract is executory at the moment the buyer is presented. An executory contract is one in which one or more parties have not yet fulfilled all of their obligations. In this scenario, Chandra has fully performed her obligation by procuring a ready, willing, and able buyer. However, Elias has not yet performed his obligation, which is to pay the commission. Because a primary obligation remains unfulfilled, the contract as a whole is still considered executory. It will only become an executed contract once Elias pays the commission and all obligations are discharged. It is also important to note that under Montana’s Statute of Frauds, an agreement for real estate commission is generally required to be in writing to be enforceable in court, but this does not change the fundamental classification of the agreement as it was formed.

The calculation to determine the contribution of the improvement is as follows: Market Value After Improvement: $780,000 Market Value Before Improvement: $750,000 Cost of Improvement: $45,000 The value of the contribution is the difference in market value, not the cost of the item. Contribution = Market Value After Improvement – Market Value Before Improvement Contribution = \($780,000 – $750,000 = $30,000\) The principle of contribution is a fundamental concept in property appraisal. It states that the value of any particular component or improvement to a property is determined by how much it adds to the overall market value of the property as a whole. This value is not necessarily equal to the cost of the improvement. In this scenario, the geothermal heating system cost $45,000 to install. However, an appraisal of the market data indicates that the property’s value only increased by $30,000 after the installation. Therefore, the actual contribution of the heating system to the property’s value is $30,000. This demonstrates a key aspect of this principle: an improvement can be functionally adequate and desirable, but its cost may not be fully recovered in the form of increased market value. This situation is often referred to as an item suffering from some form of depreciation or being a partial over-improvement for the specific market, where buyers are not willing to pay a dollar-for-dollar premium for that specific feature. A supervising broker must understand this to properly advise clients on the potential return on investment for proposed renovations.

No calculation is required for this question. A Montana land trust is a specific legal arrangement where a trustee holds both legal and equitable title to a parcel of real estate. However, the core feature of this trust is that the beneficiary retains full management and control over the property. This control is exercised through a power of direction, which is a contractual right outlined in the unrecorded trust agreement. The beneficiary can direct the trustee to perform actions such as mortgaging, leasing, or selling the property. For a real estate broker, this is the most critical aspect. When a beneficiary wants to sell property held in a land trust, the broker’s primary responsibility is to confirm that the beneficiary indeed possesses this power of direction. The listing agreement and subsequent purchase agreement are initiated based on the beneficiary’s instruction. The trustee’s role is to act solely upon these directions and execute the necessary legal documents, such as the deed, at closing. The beneficiary’s interest in a land trust is legally considered personal property, not an interest in real property. This distinction is significant for matters like probate, liens, and transferability, but for the act of listing and selling, the broker’s authority flows directly from the beneficiary’s power of direction over the trustee who holds the title.

The basis for qualification is the fully indexed rate. The fully indexed rate is calculated as: \[ \text{Fully Indexed Rate} = \text{Index} + \text{Margin} \] Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, specifically the Ability-to-Repay (ATR) and Qualified Mortgage (QM) rules, lenders are required to make a reasonable, good-faith determination that a consumer has the ability to repay a loan. For an Adjustable-Rate Mortgage, this assessment cannot be based solely on the lower introductory or “teaser” rate. Instead, the lender must underwrite the loan using the fully indexed rate, which is the interest rate calculated by adding the margin to the index value at the time of origination. This ensures the borrower is qualified based on a more realistic long-term payment obligation, rather than just the initial, temporarily low payment. This regulation was implemented to prevent the practice of qualifying borrowers for loans they could not afford once the interest rate adjusted upwards after the initial fixed period. A supervising broker in Montana must ensure their licensees understand this critical federal requirement to protect consumers from potentially unaffordable payment shock and to ensure the lending process is compliant with federal law, which is a key part of their fiduciary duty. The lifetime cap is a separate feature that limits the maximum interest rate over the entire loan term, but it is the fully indexed rate that serves as the primary basis for the initial qualification.

The foundational land grid system in Montana is the Government Survey System, also known as the Rectangular Survey System, which is based on the Montana Principal Meridian and its corresponding base line. When dealing with a historical parcel that was originally described using a metes and bounds system, especially one with ephemeral or non-existent monuments like trees or rock piles, a new survey is essential for establishing a clear, modern, and legally defensible boundary. A licensed surveyor must first interpret the original metes and bounds description and locate the parcel’s boundaries as accurately as possible within the framework of the surrounding Government Survey System sections. This process resolves ambiguities and creates a definitive perimeter for the land being conveyed. Once this parent parcel is accurately defined, the process of subdivision can begin. For creating numerous smaller lots for a residential development, the Lot and Block system is the standard and most efficient method. The surveyor creates a subdivision plat, which is a detailed map showing the dimensions, lot numbers, block numbers, streets, and easements. This plat, once approved by the relevant local authorities and recorded in the county clerk and recorder’s office, becomes the official legal reference. The legal description for each individual lot then simply refers to its specific lot number, block number, and the name and recording information of the subdivision plat. This layered approach, starting with the GSS, reconciling the historic metes and bounds through a new survey, and then creating a new Lot and Block description via a recorded plat, provides the greatest legal certainty and simplifies future transactions.

The legal conclusion is that Glacier View Outfitters, LLC holds title to the property in severalty. In Montana, as in other states, real property can be held in various forms of ownership. Tenancy in severalty, also known as sole ownership, is a form of ownership where title is vested in one person or a single legal entity. The term severalty comes from the fact that the owner’s interest is severed and kept separate from the interests of all other parties. While it is common to think of a single individual holding title in severalty, it is crucial to understand that a legal entity, such as a corporation or a Limited Liability Company (LLC), is recognized by law as a single legal person. Therefore, when an LLC acquires real estate and the deed names the LLC as the grantee, the LLC itself owns the property as a single unit. The individual members of the LLC do not hold direct title to the real estate; instead, they own an interest in the LLC. The LLC, as the sole owner on the deed, holds the entire bundle of rights. This is distinct from concurrent ownership forms like tenancy in common or joint tenancy, where two or more natural persons or entities would hold title together. The scenario describes a single grantee, Glacier View Outfitters, LLC, which means it is the sole owner, and the form of ownership is tenancy in severalty.

The process of appraisal involves reconciling the values derived from the three primary approaches: the Sales Comparison Approach, the Cost Approach, and the Income Approach. Reconciliation is not an averaging of the values. Instead, the appraiser gives more weight to the approach considered most reliable and relevant for the specific property type and the quality of available data. For a unique, income-generating historic property with no recent comparable sales, the Sales Comparison Approach is unreliable. Expanding the search for comparables over a wide geographic area would introduce significant dissimilarities, making adjustments speculative and diminishing the credibility of this method. The Cost Approach is also problematic. Calculating the cost to reproduce a 19th-century building with period-specific materials and craftsmanship is exceptionally difficult and may not reflect what a buyer would actually pay in the market. Furthermore, estimating accrued depreciation for a 130-year-old structure is highly subjective, particularly when balancing physical and functional obsolescence against historical significance, which can be a form of appreciation. Therefore, the Income Approach becomes the most credible and supportable method. The property has established income streams from both commercial and residential leases. This data is current, verifiable, and directly reflects the property’s economic utility and the return an investor could expect. An appraiser can analyze the leases, market rents, operating expenses, and apply a capitalization rate derived from the market for similar investment properties, even if they are not historically identical. In the final reconciliation, the value indicated by the Income Approach would be given the most significant weight because it is based on the most reliable and relevant data available for this specific property.

Step 1: Identify all liens on the property. The liens are a general real property tax lien, a construction lien, and a mortgage lien. Step 2: Determine the priority of the general real property tax lien according to Montana law. Under Montana Code Annotated (MCA) 15-16-403, a tax lien for real property taxes is a first and prior lien upon the property and has precedence over all other liens. Therefore, the property tax lien is first in priority. Step 3: Determine the priority between the construction lien and the mortgage lien. Under MCA 71-3-542, a construction lien’s priority attaches as of the date of the commencement of the work or improvement. The commencement of work was on March 10. Step 4: Identify the date the mortgage lien attached. The mortgage was recorded on April 20, which establishes its priority date. Step 5: Compare the priority dates of the construction lien and the mortgage. The construction lien’s priority date (March 10) is earlier than the mortgage’s priority date (April 20). Therefore, the construction lien has priority over the mortgage. Step 6: Establish the final priority order for the distribution of foreclosure proceeds. Based on the analysis, the order is: 1st – Property Tax Lien, 2nd – Construction Lien, 3rd – Mortgage Lien. In Montana, the rules governing the priority of liens are critical for determining the order of payment from foreclosure sale proceeds. Different types of liens are subject to different priority rules. General real property tax liens hold a superior position, often referred to as super-priority. State statute grants these tax liens precedence over all other encumbrances, including mortgages and construction liens, regardless of when the other liens were recorded or attached. This ensures that government entities can collect necessary tax revenue. For other liens, the principle of “first in time, first in right” generally applies, but the determination of “time” varies. For a mortgage, its priority is established on the date it is officially recorded with the county clerk and recorder. However, Montana’s construction lien law contains a special provision known as the “relation-back” doctrine. This doctrine establishes the priority of a construction lien not from the date it is filed, but from the date work first commenced or materials were first furnished to the job site. Consequently, a construction lien can have priority over a mortgage that was recorded after work began, even if the lien itself was filed long after the mortgage was recorded. This protects contractors and suppliers who have invested labor and materials into a property.

The seller, Elias, had direct knowledge of a recurring, significant material adverse fact regarding the property—the seasonal well water contamination. His failure to disclose this on the Montana Required Disclosures Statement and his active misrepresentation by marking “No” to known water issues constitutes a breach of his statutory duty. Under Montana law, a seller must disclose all known material facts affecting the property’s value or a buyer’s decision to purchase. The inclusion of an “as-is” clause in the purchase agreement does not relieve the seller of liability for fraudulent concealment or failure to disclose known latent defects. The listing broker, Anja, also bears responsibility. While her standard visual inspection did not reveal the issue, the seller’s comment that the well gets “a bit silty” put her on notice of a potential problem. This statement is a red flag. According to the duties outlined in MCA 37-51-313, a broker must exercise reasonable skill and care and disclose all relevant and material information concerning the transaction that is known to the agent. Knowing there was a potential water issue, even if downplayed by the seller, created a duty for Anja to disclose this specific information to the buyer. Her failure to convey this known potential defect is a breach of her professional duties. Therefore, liability is shared. The seller is liable for active, fraudulent misrepresentation, and the broker is liable for failing to disclose a known potential material fact that was communicated to her, regardless of her own visual inspection results.

The total cost of the Special Improvement District (SID) project is $1,200,000, and it benefits 80 properties. The assessment per property is calculated as: \[\frac{\$1,200,000}{80} = \$15,000\] If this amount is amortized over 20 years, the annual principal payment is: \[\frac{\$15,000}{20} = \$750\] Assuming a 5% interest rate, the interest for the first year on the outstanding principal would be: \[\$15,000 \times 0.05 = \$750\] Therefore, the total payment added to the property tax bill for the first year is \( \$750 \text{ (principal)} + \$750 \text{ (interest)} = \$1,500 \). In Montana, a Special Improvement District is a legal mechanism used by municipalities or counties to finance infrastructure projects that provide a direct benefit to a limited and identifiable area. Examples include paving streets, installing sidewalks, or upgrading sewer systems. The cost of these improvements is assessed against the properties that benefit. Once the local governing body, such as a city council, passes a resolution creating the SID and levying the assessment, that assessment becomes a lien on the affected properties. Under Montana Code Annotated (MCA) Title 7, Chapter 12, this special assessment lien holds a special and high-priority status. It is considered on par with and is collected in the same manner as general ad valorem property taxes. This gives it superiority over all private liens and encumbrances, such as mortgages, deeds of trust, or judgment liens, regardless of when those private liens were created or recorded. This principle overrides the standard “first in time, first in right” rule that typically governs lien priority. Consequently, if a property owner defaults and the property is sold to satisfy the liens, the SID assessment and any delinquent general property taxes must be paid from the sale proceeds before any funds are distributed to the holder of a pre-existing mortgage. This statutory priority ensures that public improvements are funded and protects the government’s ability to collect these essential revenues.

The legal framework governing this scenario is the Montana Unit Ownership Act, specifically Title 70, Chapter 23 of the Montana Code Annotated. While the default rule for removing a property from the provisions of the Act requires a recorded instrument signed by all unit owners, the Act also allows the condominium’s declaration to specify a different procedure. In this case, the declaration permits termination with an 80% or greater vote of the undivided interests, and an 85% vote was achieved. This vote is sufficient to legally terminate the condominium regime. Upon the recording of the instrument of removal, the separate interests in individual units are extinguished. According to MCA 70-23-802, the property is then deemed to be owned as a tenancy in common by all the unit owners. Each owner’s undivided interest in the entire property as a tenant in common is equal to the percentage of undivided interest they previously held in the common elements. Because the dissenting owners will not voluntarily sell their new tenancy in common interest, the majority owners’ next legal step is to invoke the right of partition under Title 70, Chapter 29, MCA. Any tenant in common has the legal right to file a partition action in district court. Given that the property cannot be physically divided among 40 owners, the court will almost certainly order a partition by sale, where the entire property is sold and the proceeds are distributed to all owners, including the dissenters, according to their percentage of ownership. This two-step process of termination followed by partition is the established legal method to resolve such a situation.

Step 1: Analyze the client’s primary concerns. The client, Kenji, has two distinct but related misunderstandings about real property. Concern A is about the permanent loss of value due to a natural event (a landslide). Concern B is the belief that another, identical parcel might exist elsewhere. Step 2: Relate Concern A to the physical characteristics of land. The landslide altered the topography and destroyed surface improvements (like a trail or landscaping), but it did not destroy the land itself. The geographic coordinates and the substance of the land remain. This directly relates to the principle of indestructibility. Step 3: Relate Concern B to the physical characteristics of land. The idea of finding an “identical” parcel is a fallacy in real estate. Every parcel is distinct due to its fixed and unique geographical position. No two parcels can occupy the same space. This is the principle of uniqueness, also known as non-homogeneity. Step 4: Synthesize the analysis to determine the most encompassing principle for the broker’s explanation. While indestructibility explains why the land survives the landslide, it is the principle of uniqueness that forms the bedrock of real property value and law. Uniqueness is why specific performance is a remedy for contract breaches and why one property cannot be substituted for another like a commodity. It directly refutes Kenji’s search for an identical parcel and simultaneously establishes that the value of the damaged parcel is tied to its specific, un-replicable location, views, and other attributes, even post-landslide. Therefore, explaining uniqueness is the most critical and comprehensive response to address both of Kenji’s fundamental misunderstandings about the nature of his investment. The physical characteristics of land are fundamental concepts in real estate. Land has three primary physical characteristics: immobility, indestructibility, and uniqueness. Immobility refers to the fact that the geographic location of a parcel of land is fixed and cannot be moved. Indestructibility means that land is durable and permanent; while its surface and improvements can be damaged or destroyed, the land itself remains. Uniqueness, also known as non-homogeneity, posits that no two parcels of land are exactly alike. At the very least, each parcel has its own unique geographic coordinates. This principle is a cornerstone of real estate law and valuation. In the given scenario, the client’s concern about the landslide speaks to the concept of indestructibility—the land itself endures despite surface changes. However, his more fundamental query about finding an identical parcel elsewhere is directly addressed by the principle of uniqueness. A competent broker in Montana must explain that the value of a property, especially a scenic one, is intrinsically tied to its unique location, topography, and views, which cannot be replicated. This uniqueness is why the property has a distinct value and why a direct, one-for-one substitution is impossible, forming the basis for its long-term investment potential regardless of temporary surface damage.

The core legal principle at issue is the “time is of the essence” clause within a Montana buy-sell agreement. When this clause is included, it elevates all dates and deadlines specified in the contract to material terms. This means that a failure to perform by a specific date is not merely a minor delay but a material breach of the contract. In this scenario, the financing contingency had a firm deadline of August 1st. The buyer’s failure to secure the loan commitment and provide notice by this date constituted a material breach. This breach immediately gives the non-breaching party, the seller, the right to exercise their remedies. One of these remedies is the unilateral termination of the contract. The seller is not obligated to grant an extension, nor are they required to wait until the final closing date to see if the buyer can eventually perform. The purpose of the clause is to create certainty and prevent parties from being held in limbo by delays. Therefore, upon the buyer’s failure to meet the financing deadline, the seller was within her legal rights to declare the contract terminated and consider other offers. The fact that the buyer secured financing just two days later is irrelevant; the breach had already occurred, and the seller’s right to terminate had vested at the moment the deadline passed without performance.

The determination begins by analyzing the relationship between the parties, which is a commercial landlord (Anya) and tenant (Leo). This relationship invokes the trade fixture doctrine under Montana law. The item in question is an industrial ventilation system, installed by the tenant for the specific purpose of his metal fabrication business. The primary tests for determining if an item is a fixture are the method of attachment, its adaptation to the real estate, the intention of the annexor, and the relationship of the parties. While the system is connected to the building’s ductwork (method of attachment), its primary purpose is adapted specifically to the tenant’s trade, not to the general use of the warehouse building. The most critical factor here is the presumed intent in a commercial lease context. Courts presume that a tenant installs such equipment for their own use in their trade and intends to remove it upon lease termination. This presumption is codified in the concept of trade fixtures, specifically addressed in Montana Code Annotated 70-18-101, which allows a tenant to remove, any time during the continuance of the term, anything affixed to the property for the purposes of trade, manufacture, ornament, or domestic use, if the removal can be effected without injury to the premises. Since the lease is silent, the statutory provision governs. Therefore, the ventilation system is classified as a trade fixture, which is the tenant’s personal property. Leo has the right to remove the system, but he is obligated to repair any damage caused by the removal process, such as patching the connections to the ductwork.

N/A In the state of Montana, the legal framework governing mortgages is based on the lien theory. This is a critical distinction from title theory states. Under the lien theory, a mortgage is not a conveyance of title to the lender, or mortgagee. Instead, it creates a security interest, or a lien, on the property in favor of the mortgagee. The borrower, or mortgagor, retains both legal and equitable title to the property throughout the loan term, even if they are in default. Consequently, the mortgagor’s rights of ownership, including the right to possess the property and the right to collect rents and profits from it, remain intact. Upon a mortgagor’s default, the mortgagee does not automatically gain the right to take possession or seize rental income. The mortgagee’s primary remedy is to initiate foreclosure proceedings according to Montana law. This legal process, whether judicial or non-judicial, is the mechanism through which the mortgagee can force the sale of the property to satisfy the outstanding debt. Only through a specific court order, such as the appointment of a receiver, or upon the completion of the foreclosure sale, would the right to possession and rents be transferred from the mortgagor.

Step 1: Identify the legal status of the water right. The right is described as decreed and appurtenant to the land. Step 2: Apply the relevant Montana statute. Montana Code Annotated (MCA) § 85-2-403(1) governs the transfer of appurtenant water rights. Step 3: Analyze the statute’s presumption. The law states that a right to the use of water appurtenant to land passes with the conveyance of the land, unless a contrary intention is expressly stated in the conveyance document. Step 4: Evaluate the contract documents. The buy-sell agreement and, presumably, the subsequent deed were silent on the water rights. There was no express reservation or exception by the seller, Anya. Step 5: Conclude the legal outcome. Based on the statutory presumption, because the seller did not expressly reserve the water rights in writing, the ownership of the appurtenant water rights transferred to the buyer, Liam, along with the title to the land. In Montana, water law is a critical component of real estate practice. Water rights are classified as real property and are typically appurtenant, meaning they are attached to and benefit a specific parcel of land. The legal principle governing their transfer is well-established. According to state law, when a parcel of land with an appurtenant water right is sold, the water right automatically transfers to the new owner as part of the land itself. This transfer occurs by default unless the seller takes specific, explicit action to prevent it. To retain a water right, the seller must include a clear, unambiguous reservation clause within the deed or other instrument of conveyance. Silence on the matter does not result in retention by the seller. Instead, the law presumes the intention was to include the water right with the land. This principle protects buyers and ensures that the productive capacity of the land, which often depends on water, is not unknowingly severed during a transaction. Therefore, the burden is on the seller to expressly reserve the right if they wish to keep it.

The Montana Small Tract Financing Act governs the use of trust indentures for real property financing on parcels of land not exceeding 40 acres. This Act provides for a non-judicial foreclosure process, which is a key alternative to the judicial foreclosure of a traditional mortgage. When a borrower, or grantor, defaults on the loan secured by a trust indenture, the lender, or beneficiary, can instruct the trustee to initiate foreclosure by exercising the power of sale. The process begins with the trustee recording a notice of trustee’s sale in the county where the property is located. This notice must also be mailed to the grantor and any other parties with a recorded interest in the property. A critical timeline is established by the Act: the trustee’s sale cannot take place sooner than 120 days from the date the notice of sale is recorded. During this 120-day period, up until the time of the sale, the grantor has the right to cure the default by paying the delinquent amounts, thereby stopping the foreclosure. However, a defining feature of this non-judicial process is its finality. Once a valid trustee’s sale is completed, the grantor’s rights to the property are extinguished. Unlike a judicial foreclosure of a mortgage in Montana, which provides the borrower with a one-year statutory right of redemption after the sale, a non-judicial sale under the Small Tract Financing Act offers no such post-sale right of redemption. The sale is absolute, and the purchaser at the sale receives a trustee’s deed conveying all of the grantor’s former title.

In Montana real estate practice, resolving ambiguities in legal descriptions follows a well-established hierarchy of evidence. The primary goal is to ascertain the original intent of the parties at the time the parcel was created. When a legal description, such as one found in a recorded Certificate of Survey (COS), contains conflicting elements, or when a monument is lost, surveyors and courts rely on this order of precedence. The highest priority is given to natural monuments, followed by artificial monuments, then adjacent tracts or boundaries, then courses (directions) and distances, and finally, the stated area or quantity of land is considered the least reliable element. In this scenario, the Certificate of Survey legally created a new parcel, effectively carving it out of the larger PLSS-described tract. The boundary of this new parcel is defined by the COS. Even though a key artificial monument (the cedar fence post) is missing, the COS is not void. The proper procedure is to use the other elements within the COS, primarily its recorded courses and distances (the metes and bounds calls), originating from a known and recoverable point of beginning (the SE section corner), to re-establish the most probable original location of that lost monument. This process of retracement relies on the integrity of the data within the recorded survey document. The original PLSS description of the parent tract is subordinate to the specific description of the severed parcel. Likewise, the stated acreage is a calculation based on the boundaries, not a determinant of them.

The conveyance from Genevieve to the Flathead Conservation Trust created a fee simple subject to a condition subsequent. This type of estate is identified by conditional language such as “on the condition that” or “provided that,” coupled with a future interest for the grantor known as a right of re-entry or power of termination. The deed explicitly stated that if the condition was breached, Genevieve or her heirs would have the right to re-enter and repossess. This is distinct from a fee simple determinable, which uses durational language like “so long as” and results in an automatic termination of the estate upon the breach of the condition. In this scenario, the trust breached the condition to maintain the land exclusively as a bird sanctuary by leasing a portion for a cell tower. However, with a fee simple subject to a condition subsequent, the breach does not automatically terminate the grantee’s estate. The trust’s ownership continues, but it becomes a defeasible estate. The power to terminate the estate lies with the holder of the future interest, which in this case would be Genevieve’s heirs since she is deceased. To reclaim the property, the heirs must take affirmative action to exercise their right of re-entry, which typically involves filing a legal action to quiet title. Therefore, immediately following the breach, the trust still holds title, but Genevieve’s heirs now hold a present, exercisable right to terminate that title due to the breach.

The correct course of action is based on the specific resolution process outlined in the Montana Association of Realtors (MAR) Buy-Sell Agreement’s inspection contingency. When a buyer conducts an inspection and finds deficiencies, they can provide the seller with a notice detailing the objections and proposing a resolution, such as repairs or a price reduction. The seller then has the right to respond. In this scenario, the seller’s outright written rejection of the buyer’s proposed repairs creates a critical decision point for the buyer. According to the standard MAR form, upon receiving the seller’s rejection, the buyer has a specified period, typically a few business days, to either waive the inspection contingency and accept the property as is, or terminate the agreement in writing. Terminating based on the failure to reach a satisfactory agreement on inspection issues is the most direct and contractually sound path at this moment. This action is a direct consequence of the contingency’s specific terms being followed to their conclusion. While the low appraisal is also a significant issue that could trigger the appraisal or financing contingency, it has not yet fully matured. The lender has not formally denied the loan, and there might still be an opportunity to renegotiate the price or for the buyer to contribute more cash. The inspection issue, however, has reached a definitive impasse with the seller’s rejection, providing an immediate and clear basis for termination and the return of the earnest money deposit.