Montana HOA Budget Approval

Section 1: Overview, how HOA budgets are approved in Montana

Montana keeps one traditional condominium statute on the books — the Montana Unit Ownership Act, Mont. Code Ann. § 70-23-101 et seq. — and no comprehensive statute for planned communities at all. So for most communities, the recorded declaration and bylaws, not a state code section, govern how a budget gets approved.¹ The model is simple to state: the board adopts the budget under the declaration and bylaws, and no statutory ratification step sits on top of it. Planned communities fall outside the condominium statute entirely; they run on their CC&Rs and on the corporate formalities of the Montana Nonprofit Corporation Act.² Montana mandates no reserve study, requires no reserve funding, and caps no assessment increase — it leaves every one of those questions to the governing documents.³ Add it up, and Montana lands firmly in the declaration-primary camp: the rules for adopting a budget and setting assessments come from the recorded instrument, not the state code. The quick-reference table and the description that follow point to the few statutory provisions that exist and flag the many the statute never touches.

Section 2: The budget approval mechanism

Montana's Unit Ownership Act is a traditional condominium framework, and it does not spell out budget mechanics. Where the statute says nothing, the recorded declaration and bylaws control — which is why most rows below read "Not specified by statute."

2A. Quick-Reference Budget Mechanics Table

2B. The budget process

For condominiums, the Unit Ownership Act builds a framework for ownership, common-expense allocation, liens, and records — but it hands the budget-adoption process to the bylaws and declaration. The statute requires the community to charge common expenses to unit owners according to each owner's percentage of undivided interest in the common elements.⁵ It also requires the bylaws to state how the association collects each owner's share of those expenses, which confirms that the operative collection and budgeting rules live in the governing documents, not the code.⁶ What the statute does not do is say who proposes the budget, how the board adopts it, whether owners vote on it, what notice must precede a vote, or what happens if owners object. None of those steps appears in Title 70, chapter 23. Where the statute stays silent, the recorded declaration and bylaws control, and no statutory default fills the gap.

Planned communities sit outside the condominium statute altogether. Montana has never enacted a central statute to govern planned-community HOAs, so those associations lean on their CC&Rs and, where incorporated, on the Montana Nonprofit Corporation Act for corporate procedure.⁷ The Nonprofit Corporation Act supplies the board, member, meeting, and record formalities, but it sets no budget-approval threshold and no assessment mechanism.² The result: a planned community's budget process is whatever its declaration and bylaws say it is. Montana's targeted Title 70 provisions on homeowners' associations deal with covenant restrictions and political signage, not budgets, and they create no budget-adoption procedure.⁸

2C. Variation and the corporate-law overlay

Because the statute says nothing about budget mechanics, the recorded declaration becomes the operative source for budget adoption and assessments in both condominiums and planned communities. The declaration and bylaws decide whether the board adopts the budget alone, whether owners ratify it, and how the association approves special assessments and increases. For the large share of associations that incorporate as nonprofits, the Montana Nonprofit Corporation Act runs alongside the declaration, supplying director, member, meeting, and record-keeping rules.² Those corporate rules carry no budget-approval threshold, so they never substitute for the declaration on financial questions. Where the declaration is silent, Montana common law on covenants and contracts fills the space — and Montana courts read restrictive covenants strictly and enforce governing documents as written, which makes compliance with the declaration's own terms the central question in any budget or assessment dispute.

Section 3: Budget-adjacent obligations

Reserves in the budget

Montana imposes no statutory reserve-study or reserve-funding requirement on condominiums or planned communities; the declaration and bylaws decide whether and how a community funds reserves.³

Special assessments

The Unit Ownership Act sets no special-assessment approval threshold or procedure. For both condominiums and planned communities, the declaration governs special assessments.¹

Assessment increase limits

Montana sets no statutory percentage cap on assessment increases. Any limit on raising regular assessments comes from the recorded declaration and bylaws, not from the code.³

Financial review, audit, and disclosure tied to the budget cycle

The condominium statute ties no audit or financial-review requirement to a budget cycle. It does require the manager to keep detailed, chronological records of receipts and expenditures affecting the common elements, and to make those records and the supporting vouchers available for unit owners to examine at convenient weekday hours.⁴ The Act also gives the association a lien for unpaid common expenses — the statutory enforcement tool that stands behind an adopted budget.⁹

Section 4: Recent legislative and judicial activity

Recent bills

No bill enacted in the past 24 months amended the Unit Ownership Act's budget, assessment, or common-expense provisions. During the 2025 Regular Session, the 69th Legislature took up House Bill 619, which would have adopted the Uniform Common Interest Ownership Act — drafted by the Montana Bar's Business, Estates, Trusts, Tax, and Real Property section and modeled on the 2021 Uniform Common Interest Ownership Act — as a new comprehensive framework rather than an amendment to Title 70, chapter 23.¹⁰ House Bill 619 did not pass. As House Joint Resolution 50 records, the House Judiciary Committee tabled the bill after members argued that it was "too large and complex to understand after one hearing and needed more review."¹¹ Because lawmakers enacted no qualifying budget or assessment bill, the card below tracks the measure's status rather than a change in the law.

Recent rulings

No Montana Supreme Court decision from the past 36 months interprets the Unit Ownership Act's budget, assessment, or common-expense provisions. The Court's recent HOA-related rulings turn on covenant enforcement and use restrictions, not budgeting. In Brandt v. R&R Mountain Escapes, LLC, 2025 MT 155, decided July 22, 2025, the Court took up whether subdivision covenants bar short-term rentals; Justice Laurie McKinnon wrote that "the unambiguous intent and language of the covenants was to provide for residential country living . . . with only single-family dwellings used for residential, and not commercial, purposes."¹² That decision rests on covenant interpretation, not on assessments or budget adoption, but it shows how the Court reads governing documents — by their plain terms.

Active legislative debates

The live policy question is whether Montana should adopt a comprehensive common-interest-community statute. After House Bill 619 failed, the Legislature passed House Joint Resolution 50 (2025), which requests "an interim study of the Uniform Common Interest Ownership Act" and directs that every part of the study "be concluded prior to September 15, 2026."¹¹

Section 5: National positioning and related coverage

Montana belongs to the declaration-primary group of states, where the recorded instrument — not a detailed state statute — supplies the budget and assessment rules. It sits alongside states such as Arkansas and Mississippi and the condominium-only frameworks of North and South Dakota, and it stands apart from three other models. It is not part of the negative-option Uniform Common Interest Ownership Act family, because Montana has not adopted UCIOA and its condominium statute is not a Uniform Condominium Act enactment.¹³ It does not follow California's assessment-increase-cap model, and it is not among the states that mandate reserve studies or reserve funding.³ For a multi-state operator entering Montana, the implication is direct: the recorded declaration, not a state statute, controls the budget for most communities, so diligence has to focus on each association's governing documents.

HOA Weekly's Montana Budget Approval coverage updates quarterly as the Legislature and the Montana Supreme Court act, including any product of the current interim study. Federal frameworks — the Fair Housing Act, the Americans with Disabilities Act, the Fair Debt Collection Practices Act, the Servicemembers Civil Relief Act, and the FCC's OTARD rule — apply to Montana associations regardless of the state framework.

Footnotes

1. Montana Code Annotated, Title 70, ch. 23, Unit Ownership Act (Condominiums), table of contents ↩
2. Mont. Code Ann. § 35-2-113, Montana Nonprofit Corporation Act, short title ↩
3. Community Associations Institute, Reserve Requirements and Funding for Community Associations ↩
4. Mont. Code Ann. § 70-23-606, Records of receipts and expenditures affecting common elements, inspection ↩
5. Mont. Code Ann. § 70-23-501, Common profits and expenses ↩
6. Mont. Code Ann. § 70-23-308, Contents of bylaws ↩
7. Montana Legislative Services, HOA Governance in Montana, Local Government Interim Committee (Jan. 2024) ↩
8. Mont. Code Ann. § 70-17-901, Homeowners' association restrictions, real property rights ↩
9. Mont. Code Ann. § 70-23-607, Claim for common expenses, priority of lien ↩
10. Montana Legislature Bill Explorer, House Bill 619 (2025 Regular Session) ↩
11. Montana Legislature, House Joint Resolution 50 (2025), interim study of the Uniform Common Interest Ownership Act ↩
12. Brandt v. R&R Mountain Escapes, LLC, 2025 MT 155 (Montana Supreme Court, DA 23-0716, decided July 22, 2025) ↩
13. Community Associations Institute, Uniform Common Interest Ownership Act adopting states ↩