1. Complete Sections 1.1 through 1.6.

2. Attach the applicable documents required for your exemption(s)

• Boundary Line Relocation: See Sections 2.1.K and 3.1 of the application
• Aggregation: See Section 3.1 of the application
• Mortgage Security: See Sections 2.1.B and 3.1 of the application
• Family Transfer: See Sections 2.1.L and 3.1 of the application
  • Once the completed application is received, your family transfer request will be set for a hearing before the Board of County Commissioners.
• Agricultural Covenant: See Sections 2.1.M and 3.1 of the application

3. All owners of the claimant property must sign the affidavit before a notary public.

4. Submit the application, fee, and all requested attachments to ensure timely processing of your request.

• Claimants may also have their agent or representative sign the affidavit.
• The application can be completed without the assistance of a surveying or engineering firm.
• If the exemption request is approved, a survey of the approved division prepared by a registered land surveyor may be required.
• Please remember that an affidavit means you are swearing that the information you have provided is true and correct.
• Exemption approval will be subject to surveying requirements of MCA 76-3-401 and filing of the survey.
• You are required to pay all levied property taxes prior to filing the survey.
• If your application is approved, you may still need other approvals, such as a building permit, zoning compliance or land use permit, approach permit, sanitation approval, or a floodplain permit.

This is a partial list of the most commonly used exemptions provided for in Montana state law.

• 76-3-201(1)(b) creates a parcel to provide security for a construction mortgage, trust indenture, or lien. This division does not create a transferable parcel unless the property is foreclosed upon, at which time the financial institution takes ownership of the security parcel.
• 76-3-201(1)(c) creates an interest in oil, gas, minerals, or water that is severed from the surface ownership.
• 76-3-201(1)(d) creates cemetery lots.
• 76-3-201(1)(e) creates a parcel by the reservation of a life estate.
• 76-3-201(1)(g) divides land over which the state does not have jurisdiction.
• 76-3-201(1)(h) divides land for right-of-way or utility lots.
• 76-3-203 divides land for certain condominiums, townhomes, and townhouses.
• 76-3-205 divides land for airport land and state-owned lands.
• 76-3-207(1)(a) allows you to relocate property boundaries of a parcel outside a platted subdivision.
• 76-3-207(1)(b) creates a parcel for transfer to an immediate family member, defined as spouse, child, or parent.
• 76-3-207(1)(c) creates a parcel to use for agricultural purposes, and no structure requiring sewage facilities may be located on the parcel.
• 76-3-207(1)(d) allows you to relocate property boundaries of five or fewer lots within a platted subdivision.
• 76-3-207(1)(e) allows you to relocate property boundaries between lots within a subdivision and adjoining lots outside of the subdivision.
• 76-3-207(1)(f) allows you to aggregate parcels or lots.

The Montana Subdivision and Platting Act (SPA) defines how land may be legally divided. Generally, to divide land, a property owner will either subdivide lots according to subdivision regulations or use an exemption to the SPA.   

One type of exemption is the mortgage exemption. The mortgage exemption is a limited purpose exemption which allows creation of a legal description to secure a loan on the property. By law, mortgage exemption parcels may only be transferred by the owner of the property who obtained the mortgage exemption to the financial or lending institution that holds the mortgage.    The mortgage exemption is a lightly used exemption. We estimate that since this statute was adopted in 1973, Missoula County has approved approximately 400 mortgage exemptions. To put that number in perspective, there are approximately 48,000 parcels of land in Missoula County.

The Clerk and Recorder and County Attorney’s office have specified duties to see that transfers of land occur in accordance with the SPA. In Missoula County, however, the Clerk and Recorder’s office has sometimes erroneously recorded transfers of land that didn’t comply with the restrictions on mortgage exemptions. Missoula County must recognize the requirements of the SPA but will allow future recording of certain mortgage exemption parcels, as follows.

1. No Foreclosure/Transfer of Mortgage Exemption Parcel Recorded: When there has been no foreclosure but the owner who created the mortgage exemption parcel has transferred the mortgage exemption parcel as a separate parcel to another party and the transfer was recorded, the new owner may record a future transfer. This will apply regardless of whether the transfer to the new owner occurred before or after 2003. This protects the innocent purchaser of a noncompliant parcel.
   
   
2. No Foreclosure/Transfer of Remainder Recorded: Remainder refers to the property outside the mortgage exemption lot. When the owner of a mortgage exemption remainder has transferred the remainder as a separate parcel to another party and the transfer was recorded, the new owner may record future transfers. This will apply regardless of whether the transfer to the new owner occurred before or after 2003. This protects the innocent purchaser of a non- compliant parcel. 

It’s important to know that recording of a non-compliant mortgage exemption parcel will not constitute a legal opinion about the validity of the title nor will it affect the applicability of other land use laws and regulations to the parcels.

There may be situations where property owners may be able to demonstrate that an unrestricted transfer of a mortgage exemption should occur, based on Missoula County’s actions specific to the property. If a property owner believes they should be able to transfer a mortgage exemption parcel or a remainder without foreclosure, we will consider information unique to the property to determine if recording should occur. The information unique to the property includes, but is not limited to: 

• history of the parcel or remainder;
• mortgage exemption application and approval; 
• the information on the face of the Certificate of Survey;
• development of the property;
• any other information showing Missoula County actions specific to the property which created a reasonable expectation in the creating property owner that the property was not subject to the requirements of the SPA;
• indications of good faith of the property owners; and
• any other considerations unique to the property.     

If it is not possible to identify Missoula County actions specific to the property that can be the basis for recording a non-compliant mortgage exemption parcel or remainder, we can assist in identifying other solutions. Property owners do not need to hire consultants or attorneys to review their mortgage parcels with us. We remain available to discuss any questions property owners may have about mortgage exemption properties before recording or as part of land use planning.

August 15, 2013 

FAMILY TRANSFER HEARING QUESTIONS

Note: Evasion is evaluated based on rebuttable presumptions, below, which are also found in Chapter 8 of the Missoula County Subdivision Regulations.

• State your name for the record:
• Did you buy the property with the intent of dividing it?
• Do you or your transferees intend to transfer the property within the next year?
• Have you talked to anyone at the County about going through subdivision review?

Questions to ask if recipient is not a minor

• Will the property be developed?
• Will the recipient of the property be residing on the property?

Questions to ask if recipient is a minor

• Do you have a trust established for the child(ren) to hold the property?
• Who is the trustee of the trust or who controls it?
• If the property is sold, will the money be held in trust?

 REBUTTABLE PRESUMPTIONS

Section 8.6.14.2 of the Subdivision Regulations

The use of this exemption may be presumed to have been used for the purpose of evading the MSPA if:

1. A transfer of a tract of land by one family member to another, by quitclaim deed, is followed by an attempted use of this exemption on the same tract.
2. The landowner intends to divide land for the purpose of a gift or sale to the landowner’s spouse and/or minor children.
3. The remaining tract is intended to be sold so as to finance construction on a tract gifted and transferred to a spouse.
4. The division is made for the purpose of speculation by the landowner or for resale for the benefit of the landowner by using the grantee as a “straw person.”
5. The remaining tract or the transferred tracts are marketed for non-family related development purposes where benefit to family members appears to be secondary to development purposes.
6. There is no clear intent declared on the occupancy or use of the transferred tracts by receiving family members.
7. The parent purports to act as a guardian and/or conservator for a minor child without establishing a trust instrument and the bona fide assurance that the property will be managed on behalf of the child and not the parent.
8. The proposed division is on a tract that was previously created through use of a family transfer exemption, mortgage security exemption, or occasional sale exemption, or has received preliminary plat approval.
9. The transfer could be accomplished by a different exemption that would be more appropriate for the intended use.