Montana Residential Purchase and Sale Agreement

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Montana Residential Purchase and Sale Agreement

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Last updated January 23rd, 2023

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The Montana residential purchase and sale agreement is a document completed by a prospective homeowner in order to negotiate the terms of the purchase and sale of real estate. The buyer will record their offer in the agreement, along with any contingencies, the offer expiration date, and whether they will require financing to make the purchase.

It is not uncommon for sellers to reject the buyer’s initial proposal, and various revisions of the agreement may be needed until the parties find the arrangement is mutually beneficial. Once the buyer and seller complete the transaction negotiations and both sign the agreement form, the proprietary rights of the residence are legally transferred to the new owner.

Contents

Realtor Version

Montana Buy-Sell Agreement (Residential) – This form may only be used for real estate transactions by authorized members of the Montana Association of Realtors®.

Download: PDF

 

Required Disclosures (8)

  1. Condominiums
  2. Lead-Based Paint
  3. Methamphetamines
  4. Mold
  5. Newly Constructed Residences
  6. Property Disclosure Statement
  7. Radon
  8. Water Rights Acknowledgement

1) Condominiums

During the process of selling a unit that is part of a larger property (such as a condominium), the seller must ensure that the following disclosure requirements are satisfied:

  1. If the individual or entity acting as the seller is the majority owner of the property, they must inform the prospective buyer of this fact.
  2. The bylaws and regulations that govern the operation of the development and that have been adopted by the owner(s) must be disclosed to the buyer.
  3. A copy of the Unit Ownership Act must be presented upon the buyer’s request.

2) Lead-Based Paint

Individuals transferring real property are obligated to present the buyer with a disclosure for hazardous substances such as lead paint and an informational guide on how to identify and handle such materials (not required for any property built after 1978).

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3) Methamphetamines

If the residence previously harbored a methamphetamine laboratory and has not been decontaminated to the standards outlined in § 71-10-1303 by a certified contractor, the prospective buyer of said contaminated property must be informed of the property’s previous activity involving illegal drug manufacturing and contamination.

4) Mold

The seller of a home is required to notify the buyer of any mold present on the premises. The following statement must be included on at least one (1) document provided to the buyer:

“MOLD DISCLOSURE: There are many types of mold. Inhabitable properties are not, and cannot be, constructed to exclude mold. Moisture is one of the most significant factors contributing to mold growth. Information about controlling mold growth may be available from your county extension agent or health department. Certain strains of mold may cause damage to property and may adversely affect the health of susceptible persons, including allergic reactions that may include skin, eye, nose, and throat irritation. Certain strains of mold may cause infections, particularly in individuals with suppressed immune systems. Some experts contend that certain strains of mold may cause serious and even life-threatening diseases. However, experts do not agree about the nature and extent of the health problems caused by mold or about the level of mold exposure that may cause health problems. The Centers for Disease Control and Prevention is studying the link between mold and serious health conditions. The seller, landlord, seller’s agent, buyer’s agent, or property manager cannot and does not represent or warrant the absence of mold. It is the buyer’s or tenant’s obligation to determine whether a mold problem is present. To do so, the buyer or tenant should hire a qualified inspector and make any contract to purchase, rent, or lease contingent upon the results of that inspection. A seller, landlord, seller’s agent, buyer’s agent, or property manager who provides this mold disclosure statement, provides for the disclosure of any prior testing and any subsequent mitigation or treatment for mold, and discloses any knowledge of mold is not liable in any action based on the presence of or propensity for mold in a building that is subject to any contract to purchase, rent, or lease.”

5) Newly Constructed Residences

The developers of newly built homes that have not yet been occupied are required to provide potential buyers with a written document listing the inspections and tests that have been performed on the property. They must also provide a one (1) year minimum express warranty of the home’s components.

6) Property Disclosure Statement

An inspection of the home is not required before transferring ownership of the property to the buyer; however, it is the seller’s agent’s duty to disclose any adverse facts concerning the property that may deter the buyer from completing the purchase.

7) Radon

The buyer of a residence must receive and sign a document containing the following statement disclosing the health risks associated with radioactive gas:

“RADON GAS: RADON IS A NATURALLY OCCURRING RADIOACTIVE GAS THAT, WHEN IT HAS ACCUMULATED IN A BUILDING IN SUFFICIENT QUANTITIES, MAY PRESENT HEALTH RISKS TO PERSONS WHO ARE EXPOSED TO IT OVER TIME. LEVELS OF RADON THAT EXCEED FEDERAL GUIDELINES HAVE BEEN FOUND IN BUILDINGS IN MONTANA. ADDITIONAL INFORMATION REGARDING RADON AND RADON TESTING MAY BE OBTAINED FROM YOUR COUNTY OR STATE PUBLIC HEALTH UNIT.”

The seller should also provide the results of any radon gas or progeny tests that have been performed on the residence.

8) Water Rights Acknowledgement

If a home that is being transferred to a new owner is supplied by a private water system, the new owner must include in the agreement or other written document a water rights disclosure that states whether there are any water rights associated with the property and whether or not they will transfer with the property. Additionally, the DNRC Water Right Ownership Update (Form 608) must be completed if all water rights are being transferred to the new owner.

Buyer Beware

Statutes: § 37-51-313(3)(a), § 27-2-102(3)(b)

Montana is a state that observes a “Buyer Beware” rule, which holds purchasers of real property responsible for inspecting a property thoroughly to identify any material defects or adverse facts that may dissuade them from finalizing the transfer. If the seller is being represented by an agent, the agent is not required to perform any inspections or verify statements made by the seller. Nonetheless, the seller cannot prevent the buyer from discovering any material defects and is required to provide state-mandated disclosures, including a list of material facts that may potentially deter potential buyer’s.