Montana • Reserve study / underfunding
Is your Montana condo's reserve underfunded — and does the state require funding?
A reserve study can read as reassuring while quietly showing your Montana building is years behind on saving for its roof, elevators, or façade. What matters is how funded the reserves actually are — and what Montana requires.
The short answer
Montana does not require a reserve study and does not require the association to fund it. No reserve study or funding mandate. MUOA requires assessment/collection of common expenses but sets no reserve floor and prescribes no reserve-disclosure form; HOAs have no statutory reserve duty at all. A board can run a thin or zero reserve and remain compliant. Any reserve obligation comes only from the declaration. A thin reserve is the most common reason a special assessment lands later, so the study-versus-actual-balance gap is the number that matters. CondoSignal reads your reserve study and budget against Montana's rules. Free.Montana at a glance
Reserve study
Not required
None — no statutory study or funding floor
Reserve funding
Not required
Underfunding is legal here
Super-lien
None
Resale disclosure
Cancellation right
None — no statutory rescission or cooling-off period
What Montana requires
No reserve study or funding mandate. MUOA requires assessment/collection of common expenses but sets no reserve floor and prescribes no reserve-disclosure form; HOAs have no statutory reserve duty at all. A board can run a thin or zero reserve and remain compliant. Any reserve obligation comes only from the declaration. Whether a thin reserve is merely risky or actually out of compliance depends on that rule — which is the first thing to establish.
Why underfunding becomes an assessment
No statutory cap on regular-assessment increases or special assessments — other than the §70-17-901 limit on retroactively tightening use restrictions, the declaration is the only guardrail. Leading triggers: wildfire/wind-hail insurance deductibles and premium spikes, snow/ice and freeze-thaw damage, frozen-pipe losses, and deferred capital work in under-reserved resort associations. The 'percent funded' figure in the study, compared to the actual reserve balance, tells you how exposed you are.
What it means for collection and resale
Not a super-lien state. Under §70-23-607 the association's common-expense lien is prior to other liens except tax/assessment liens and a first mortgage or trust indenture of record — no priority window ahead of the mortgage. A senior nonjudicial trustee's sale under the Small Tract Financing Act generally extinguishes the association lien; the purchaser takes free of the prior owner's delinquency. No statutory association resale certificate with prescribed contents and no buyer cancellation right tied to the association documents. A seller must disclose known material defects and any HOA relationship/fees/rules, but no association-prepared package is required. Protection comes from negotiated contingencies and the 2025 HOA record-access right, exercised through the seller.
Your rights in Montana
As a Montana owner, your reserve information and any approved special assessments should appear in the association's budget and resale disclosures (none — no statutory rescission or cooling-off period). None of this is legal advice — confirm against the current statute and a licensed professional in your state.
What to check
- Find the reserve study's 'percent funded' figure.
- Compare the recommended contribution to what's budgeted.
- Confirm whether Montana mandates reserve funding.
- Check the remaining life of the roof, elevators, and façade.
- Look for a reserve catch-up or a recent special assessment.
- Check the study's date — an old study understates today's costs.
Sources
- Mont. Code Ann. Title 70, Ch. 23 — Unit Ownership Act(High)
- Mont. Code Ann. §70-23-607 — common-expense lien; priority(High)
- SB 300 (2019) — §70-17-901 covenant-amendment protection(High)
Educational only — not legal, financial, or engineering advice. Confirm against the current statute and, where it matters, a Montana-licensed professional.
FAQ
Frequently asked questions
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