Seller disclosure requirements in Montana

Is a disclosure form required by law?

Yes. Part 5 of Chapter 20 of Title 70 of the Montana Code Annotated is titled “Residential Real Property Disclosure Requirements.” The Legislature added it by Chapter 375, Laws of 2023. It applies to any transfer of “residential real property,” defined as property with one to four dwelling units or an individually owned unit in a structure of any size. The definition includes mixed residential and commercial use, a manufactured home declared an improvement to real property, and a condominium (MCA 70-20-501).

The seller must deliver the statement “prior to or contemporaneously with the execution of a contract.” The seller may deliver it directly or through the seller’s real estate agent, to the buyer or the buyer’s agent (MCA 70-20-502(1)).

The sections I read do not prescribe a state form. They set the minimum content, so check with your agent or attorney about which form is used in your transaction.

What the disclosure must cover

The statement must list any adverse material fact the seller actually knows. The law defines an adverse material fact as a condition that would materially reduce the property’s monetary value, affect structural integrity, or present a documented health risk to occupants (MCA 70-20-501(1)). At a minimum, it covers these areas (MCA 70-20-502(1)):

• Legal ownership, title, or the seller’s ability to transfer the property
• Water service and water source
• The wastewater treatment system
• Utility connections
• The buildings, including water intrusion and problems with any well, septic system, roof, foundation, plumbing, electrical system, heating system, windows, doors or appliances
• Additions or alterations made without a building permit
• Hazardous materials or pest infestations on the property or in the immediate area
• Settling, soil, standing water or drainage problems
• Testing or treatment for asbestos, radon, lead-based paint, mold, methamphetamine, fuel or chemical tanks, or contaminated soil or water
• Any other adverse material fact the seller knows about

The statement must also say, in terms substantially similar to the law’s wording, that it reports only what the seller actually knows. It must say that the seller is not required to investigate the property, that it is not a warranty, and that it does not replace the buyer’s own inspections (MCA 70-20-502(2)).

The buyer’s right to rescind

If the seller gives the statement after the contract is signed, the buyer has 3 days from delivery to rescind. The buyer does this by delivering a separately signed written statement of rescission to the seller or the seller’s agent. The parties can agree otherwise in writing, and the buyer can waive this right in the offer (MCA 70-20-504).

Which sales are exempt?

The written statement is not required for these transfers (MCA 70-20-503):

• Transfers by court order, such as probate, a writ of execution, a bankruptcy trustee, eminent domain or specific performance
• Transfers between spouses in a divorce or legal separation
• Foreclosure transfers: a deed to a lender by a borrower in default, a foreclosure sale, a trustee’s sale, a deed in lieu of foreclosure, and a later resale by the lender who acquired the home that way
• Transfers between co-owners
• Transfers to a spouse, child or parent of the seller or of another owner
• Sales where the buyer waived the disclosure statement in the contract

What does the statement mean for the seller?

The statement is a disclosure by the seller only, not by the agent. It is not a warranty of any kind (MCA 70-20-505). A seller is not responsible for errors that come from a reliable third party, such as a local government agency (MCA 70-20-505(3)). The sections I read set no penalty for an incomplete form, and I did not research Montana court decisions on misstatements. If a seller left out a known defect, ask an attorney about your options.

Licensed agents have their own duty. A seller’s agent must disclose to the buyer or the buyer’s agent any adverse material facts about the property that the agent knows. The agent is not required to inspect the property or verify the seller’s statements (MCA 37-51-313(3)(a)).

Federal lead-based paint rule (homes built before 1978)

The EPA’s Lead-based Paint Disclosure Rule applies to most housing built before 1978. Before a buyer is bound by a contract, the seller and the seller’s agent must (EPA):

• Give the buyer the EPA pamphlet Protect Your Family From Lead In Your Home
• Disclose any known lead-based paint or hazards, and hand over available records and reports
• Include a Lead Warning Statement in or attached to the contract
• Give the buyer 10 days to test for lead-based paint, unless the parties agree in writing to a different period or the buyer waives it

The EPA says the rule does not cover foreclosure sales, housing built after 1977, or housing already tested and found free of lead-based paint.

Related: the home inspection cost guide, Montana foreclosure, and Montana license lookup.