Montana Condo Lien Foreclosure Runs on the Construction Lien Rules; Non-Condo HOAs Have No Statutory Lien

Montana is not a Uniform Common Interest Ownership Act state and it has no super-lien. Title 70 of the Montana Code Annotated contains one and only one common-interest chapter, chapter 23, the Unit Ownership Act, and its title says what it reaches: condominiums. The single homeowners-association part elsewhere in Title 70, part 9 of chapter 17, contains exactly one section, § 70-17-901, and that section is about use restrictions, not money. Title 71, the liens title, runs from construction liens through loggers', crop, threshers', fertilizer, health care provider, agister's, hotel and oil and gas owners' liens and never creates an association assessment lien. The absence is structural, not an inference from silence.

Where a condominium lien does exist, its priority is deliberately weak. Section 70-23-607(1) makes the lien prior to all other liens and encumbrances on the unit except tax and assessment liens and a first mortgage or trust indenture of record. Montana wrote no dollar or month carve-out ahead of that mortgage, so nothing of the association's claim jumps the lender. That is the point most easily got wrong by analogy to neighbouring states, and it is why the practical value of a Montana condominium lien depends on the equity left after the first lender is paid.

Section 70-23-608(1) supplies the machinery. Proceedings to foreclose the § 70-23-607 lien shall conform as nearly as possible to the proceedings to foreclose liens created by Title 71, chapter 3, part 5, and the lien may be enforced by the manager acting on behalf of the association of unit owners. That is a judicial foreclosure route, not a trustee's sale. Part 5 supplies the surrounding rules the association inherits: § 71-3-562 requires all actions under that part to be commenced within two years from the date the lien is filed, § 71-3-561 governs parties, § 71-3-563 governs rules of practice, and § 71-3-564 provides for arbitration of lien disputes. The two-year clock is the deadline an association board most often misses, because the lien itself sits recorded and looks alive long after the window to sue on it has closed.

Section 70-23-608(2) is the release valve, and in Montana it is usually the better route. An action to recover a money judgment for unpaid common expenses may be maintained without foreclosing or waiving the lien securing the claim. An association can therefore sue the owner personally, collect on the judgment, and still hold the recorded lien in reserve.

Foreclosure carries two further provisions that shift the economics. Section 70-23-609(1) says that in any foreclosure suit against a unit, the unit owner is required to pay a reasonable rental for the unit if the bylaws so provide, and the plaintiff is entitled to the appointment of a receiver to collect that rent, so a Montana condominium's bylaws can turn a delinquent unit into a cash-flowing asset during the litigation. Subsection (2) lets the manager bid on the unit at the foreclosure sale, unless the declaration prohibits it, and then acquire, hold, lease, mortgage and convey it.

The two limits that matter to buyers are in the following sections. Under § 70-23-610, a purchaser who obtains title as a result of foreclosure of the first mortgage or trust indenture is not liable for any common expenses chargeable to the unit that became due before the purchaser acquired title, and the unpaid share becomes a common expense of all unit owners including that purchaser. So a lender's foreclosure wipes the arrears and spreads them across the membership. A voluntary sale works the opposite way: § 70-23-611 makes the grantee jointly and severally liable with the grantor for all unpaid common expense charges up to the conveyance, subject to a payoff protection. On a prospective purchaser's request the manager shall make and deliver a statement of the unpaid charges, and the grantee is then not liable, and the unit not subject to a lien, for any unpaid charges in excess of the amount set out in that statement.

The remedy sequence is set by the statute rather than by the declaration. To create the lien at all, § 70-23-607(2) requires the association, acting through its manager, to record in the county where the unit lies a claim containing a true statement of the account due after deducting all just credits and offsets, the name of the owner or reputed owner if known, and a description of the property sufficient to identify the unit. Subsection (3) requires the claim to be verified by the oath of a person having knowledge of the facts and filed with the recording officer in the book kept for liens under Title 71, chapter 3, part 5, indexed as deeds are indexed.

An unverified or unrecorded claim is not a lien. Once recorded, the association has two years from the filing date to bring the action, under § 71-3-562 as imported by § 70-23-608(1). Alongside foreclosure, § 70-23-506 lets an association enforce compliance with the bylaws, rules and covenants by action. For a Montana subdivision that is not a condominium, none of this applies: the association's claim is a contract claim on the recorded declaration, enforceable under § 70-17-210, which names the association or other governing body among those who may initiate a legal action to enforce covenants and which also supplies an owner the abandonment defence when no enforcement action has been taken for the period prescribed in § 27-2-202.