Montana Disclosure: Water and Mineral Rights
Montana transactions often involve water and mineral rights that may be severed from the surface. This chapter covers the disclosure issues a Montana broker must manage.
Water Rights
In Montana, water rights are governed by the prior-appropriation doctrine and may be a valuable and separate property interest tied to land use, irrigation, or livestock. Whether water rights transfer with the land, and their priority and status, can materially affect value. A broker should ensure the parties understand and document how water rights are being handled in the transaction.
Mineral and Subsurface Rights
Mineral rights, including oil, gas, and other subsurface interests, may be severed from the surface estate and owned separately. A buyer of Montana land may not automatically receive the mineral rights. Because a severed mineral estate can affect the surface owner's use and value, brokers should disclose known facts and advise buyers to investigate the mineral title.
The Broker's Disclosure Duty
Montana licensees must disclose known material facts about a property to buyers and must not conceal defects. When water or mineral rights are severed or uncertain, that fact can be material to a buyer's decision. The supervising broker should ensure affiliated licensees identify and disclose these issues and recommend appropriate professional investigation.