Do you need a real estate attorney to close in Montana?

What does the law require?

I found no Montana statute that says a buyer or seller must use an attorney to close. I read the escrow, attorney-licensing and real estate licensing laws below. If a lender, title insurer or contract asks for an attorney, that is a requirement of the transaction, not of state law.

What the law does regulate:

• Escrow. An “escrow” is a transaction where one person delivers money, a written instrument or title to a third person to hold until a stated event or condition happens. The third person then delivers it under written escrow instructions (MCA 32-7-102(2)). An “escrow business” is a commercial activity of regularly carrying on escrow transactions (MCA 32-7-102(3)).
• Licensing of escrow businesses. Montana’s escrow business law requires a license, issued through the Department of Administration. Its definition of “department” points to Title 2, chapter 15, part 10 (MCA 32-7-102(1)).
• Real estate brokers and salespersons. It is unlawful to act as a broker or salesperson without a license (MCA 37-51-301). A broker’s own trust account is not an escrow account under the escrow law (MCA 32-7-103(2)).

Who handles the closing in practice?

The law names the parties that may hold closing funds without an escrow license (MCA 32-7-103(1)):

Any of these parties may handle the funds in a given sale. The law I read does not say which is most common, so ask your lender and agent who will close your file.

Montana’s escrow law also sets rules for the money. Escrow funds must be kept in a bank, separate from the business’s own money, in accounts labeled as escrow accounts. Interest on those funds goes to the depositing party unless an agreement says otherwise. The business may not disburse until the deposited funds are available to withdraw as a matter of right, and then must disburse within 5 business days (MCA 32-7-117).

Can a non-attorney give legal advice?

Montana defines “practicing law” broadly. It includes holding yourself out as an attorney, appearing in court, and doing “acts, matters, and things that are usually done or performed by an attorney at law in the practice of that profession” (MCA 37-61-201). Practicing law in a court of record without a license is contempt of court (MCA 37-61-210).

The texts I read do not list which closing tasks count as practicing law. If you need advice on the meaning of a contract, a title problem or a boundary dispute, ask a licensed attorney.

What does an attorney cost?

I did not find an official Montana source that sets or reports a typical fee. The cost depends on the attorney and the work involved. Ask for a written estimate before you hire.

Title insurance and escrow charges are separate lines on your closing costs. See Montana closing costs and the title insurance guide.

When is an attorney worth it anyway?

Consider an attorney if you face any of these:

• A title problem, an unclear boundary, a missing easement or a dispute with a neighbor
• A purchase from a family member, an estate or a trust
• A seller who failed to disclose a known defect (Montana seller disclosure)
• A foreclosure or a deed of trust you do not understand (Montana foreclosure)
• A contract you are asked to sign with changes you do not understand

Montana’s Small Tract Financing Act, which covers trust indentures on up to 40 acres, lets a trustee or the trustee’s attorney conduct the sale (MCA 71-1-315(3)), and its definition of a title insurance producer excludes an “approved attorney” (MCA 71-1-303(4)(b)).

To check the license of a real estate agent, lender or inspector you are working with, see how to verify a license in Montana.