3.2 Montana Property Ownership and Rights

Understanding Montana ownership forms and the way water and mineral rights attach (or detach) is core state-portion material.

Forms of Ownership

Fee simple absolute

The most complete ownership: the right to use, sell, lease, mortgage, and devise, of indefinite duration. Most residential title is held in fee simple.

Joint tenancy (with right of survivorship)

Two or more owners holding equal undivided interests with right of survivorship — when one dies, their share passes automatically to the surviving joint tenants, outside probate.

Tenancy in common

Two or more owners without survivorship. On death, an owner's share passes to their heirs or devisees, not the co-owners. Shares may be unequal, and it is the default when co-ownership is created without specifying survivorship.

Community property with right of survivorship

Montana is NOT a community property state. However, Montana lets married couples hold property as community property with right of survivorship — but only by express written agreement.

Exam trap: Do not assume Montana spouses automatically own as community property. There is no automatic community property in Montana — it must be created by written agreement.

Montana Homestead Protection

Montana's homestead declaration shelters a substantial amount of an owner-occupant's home equity from many (not all) creditors. The protected amount is set by statute and is periodically adjusted — it has increased over time (for example, the cap was raised well above older figures and exceeds $400,000 under recent law), so cite "the statutory homestead amount, which adjusts over time" rather than a stale fixed dollar figure on the exam unless a current number is supplied.

Caution on stale numbers: Older study materials cite $250,000 or $350,000. Montana's homestead cap has been raised and adjusts over time. Know the concept and the exceptions (mortgages, taxes, mechanics' liens are not blocked); treat any specific dollar figure as time-sensitive.

Water Rights as Property

In Montana, water rights are real property interests that are separate from land ownership.

Types of water rights

A buyer cannot assume water rights "come with the land." Diligence — often via the DNRC and a water-rights contingency — is essential.

Severance, Estates, and Recording

Montana also tests how ownership interests are created, limited, and recorded:

• Life estate — ownership for the duration of someone's life, then passing to a remainderman or reverting to the grantor. A life tenant may use the property but cannot commit waste that harms the future interest.
• Easements — a right to use another's land (e.g., a ditch easement for irrigation, or an access easement to reach a landlocked parcel). An easement appurtenant runs with the land; an easement in gross benefits a person/entity (like a utility).
• Encumbrances — liens (mortgages, tax liens, mechanics' liens) and deed restrictions/covenants limit the owner's bundle of rights.
• Recording — Montana is a race-notice recording state in effect: recording a deed in the county where the land sits gives constructive notice and protects priority. Always record promptly.

Exam tip: A landlocked Montana parcel is a classic fact pattern — the buyer needs a recorded access easement, and the absence of legal access is a material defect.

Mineral Rights and Severed Estates

Montana's resource economy makes mineral rights a recurring topic. Mineral rights can be severed from surface rights, creating a split estate.

Exam tip: Always check the chain of title for a prior mineral reservation. A buyer of the surface may discover that a previous owner severed and kept the minerals — and that the mineral owner can access the surface to develop them. The same severance logic applies to water rights: confirm what actually transfers.