Montana Real Estate Broker Exam — All Questions

A new environmental ordinance leaves a landowner with no economically viable use of a parcel, although the government takes no title to it. The owner's strongest constitutional claim is:

• a.The ordinance is void because zoning cannot restrict use
• b.A regulatory taking entitling the owner to payment✓
• c.Escheat has occurred and the state now owns the parcel
• d.Spot zoning, since only this parcel lost its value

Regulation that goes so far it denies an owner all economically viable use is treated as a regulatory taking, and just compensation is owed even though the government never took title. Arguing that zoning simply cannot restrict use fails, because regulating land is a valid exercise of the police power and owners have no right to the most profitable use. Escheat moves property to the state only when an owner dies with no will and no heirs, which has nothing to do with an ordinance. Spot zoning describes singling out one parcel for a different classification, not a general environmental rule applied to a class of land.

Reviewing a title report, a broker finds an old recorded covenant, written decades ago, that bars resale of the lot to members of a specified race. Its legal effect today is:

• a.It binds the buyer because it was recorded before purchase
• b.It is void, so a court will never enforce it or enjoin it✓
• c.It stays valid until the homeowners association removes it
• d.It is enforceable by the association but not by an owner

A private restriction that discriminates on a protected basis is void and unenforceable under the federal Fair Housing Act and the Civil Rights Act of 1866, so no court will order compliance or enjoin a violation, and the association has no power the courts would back. Recording rescues nothing, because an illegal restriction gains no force from sitting in the public record. No association vote is required to strip it of effect, although many states let an owner have the language formally struck. Valid CC&Rs, by contrast, are enforced privately by injunction brought by an owner or the association. A broker must never repeat or give effect to such language.

A grantor signs and notarizes a deed naming a nephew as grantee, locks it in a safe deposit box, and tells no one. The grantor later dies. What is the deed's effect?

• a.Title passed when the grantor signed the deed
• b.Title passed because the deed was acknowledged
• c.No title passed, because delivery never occurred✓
• d.Title passes when the estate later records it

A deed operates only when the grantor delivers it with the present intent to pass title and the grantee accepts, and both must happen while the grantor is alive. Signing accomplishes nothing while the instrument stays under the grantor's control in a box no one knows about. Acknowledgment before a notary serves recording, not validity, so notarizing it changes nothing here. An estate representative cannot supply the delivery the grantor failed to make, and recording an undelivered deed does not revive it. The nephew takes only through the will or the intestacy statute, which is why closings hand over the executed deed rather than merely signing it.

A deed is signed by a competent grantor and handed to a grantee who accepts it, but the grantor's signature was never notarized. As between those two parties, the deed is:

• a.Void, since notarizing is a validity requirement
• b.Valid, though it cannot be recorded as it stands✓
• c.Valid only if the grantee later pays a recording fee
• d.Voidable at the option of the grantor's creditors

Acknowledgment is a recording requirement, not an element of a valid deed. Delivered and accepted, the deed transfers title between grantor and grantee even with no notary, but the recorder will reject it, leaving the grantee exposed to later purchasers and lienholders who record first. Calling it void confuses the two ideas: validity turns on a competent grantor, an identifiable grantee, words of conveyance, an adequate legal description, the grantor's signature, and delivery and acceptance. Paying a fee cannot cure a missing acknowledgment, because the recorder cannot accept the instrument at all. Creditors of the grantor gain no power to undo a completed conveyance.

In a deed, which clause opens with the words 'to have and to hold' and defines the extent of the estate the grantee is receiving?

• a.The granting clause containing the words of conveyance
• b.The habendum clause, following the granting clause✓
• c.The acknowledgment taken before a notary public officer
• d.The legal description identifying the land conveyed

The habendum clause follows the granting clause, begins with the traditional phrase 'to have and to hold,' and spells out the estate conveyed, for example a fee simple absolute or a life estate. The granting clause holds the words of conveyance that actually transfer the interest and names the grantee. The acknowledgment is the notary's certificate that the signature is genuine, which the recorder requires but the transfer does not. The legal description identifies the land by metes and bounds, lot and block, or government survey, and it fixes what is conveyed rather than how much of an estate. Reading both clauses tells a broker exactly what the buyer is getting.

A relocation company that has owned a home for three months conveys it, warranting title only against defects that arose during its own ownership. The deed it delivers is a:

• a.Bargain and sale deed implying ownership without covenants
• b.General warranty deed covering the entire chain of title
• c.Quitclaim deed conveying only the interest actually held
• d.Special (limited) warranty deed covering the grantor's period✓

Warranting only against defects created or suffered while the grantor held title describes the special or limited warranty deed, the customary instrument for corporate, relocation, and fiduciary sellers who cannot vouch for what earlier owners did. A general warranty deed reaches back through the whole history of the property and offers the broadest protection, which is more than this seller is giving. A quitclaim carries no warranties at all and passes only whatever interest the signer happens to hold. A bargain and sale deed implies that the grantor owns the property but adds few or no covenants. A buyer taking narrower covenants should lean on an owner's title policy.

A title search shows that a seller's former spouse may still hold a possible interest in the property. What is the usual instrument used to release that interest and clear the record?

• a.A quitclaim deed from the former spouse✓
• b.A general warranty deed from the former spouse
• c.A trustee's deed issued after a foreclosure
• d.A correction deed fixing the legal description

A quitclaim releases whatever interest the signer may hold, with no warranties attached, which makes it the standard tool for removing a cloud such as a possible marital interest, a stale easement claim, or a name discrepancy. Demanding a general warranty deed asks the former spouse to guarantee title he or she may never have owned, and it is normally refused. A trustee's deed is what the trustee under a deed of trust issues to the purchaser at a foreclosure sale. A correction deed reforms a mistake in an earlier deed between the same parties and cannot release an outsider's claim.

A court-appointed personal representative sells a decedent's home during probate, and the buyer's broker asks what instrument will convey title. The answer is:

• a.A trustee's deed given after a nonjudicial foreclosure
• b.A sheriff's deed issued following a judicial sale
• c.A general warranty deed with full title covenants
• d.An executor's or personal representative's deed✓

Estate property is conveyed by an executor's deed when a will names the executor, or by a personal representative's or administrator's deed when the court makes the appointment; these deeds recite the court authority and give only limited covenants. A trustee's deed comes from the trustee under a deed of trust after a nonjudicial foreclosure sale. A sheriff's deed, called a referee's deed in some states, follows a judicial sale ordered by a court. A general warranty deed is not used, because a fiduciary will not personally guarantee title against the acts of the decedent or of owners further back in the chain.

After closing under a general warranty deed, a buyer discovers a recorded utility easement that the deed never disclosed. Which covenant did the grantor breach?

• a.Quiet enjoyment, a promise against eviction by better title
• b.Seisin, a promise that the grantor owns the estate conveyed
• c.Against encumbrances, a promise of no undisclosed burdens✓
• d.Further assurance, a promise to sign curative papers

The covenant against encumbrances promises that no liens, easements, or similar burdens exist beyond those the deed discloses, so a recorded easement left unmentioned breaches it at the moment of delivery. Seisin promises the grantor actually owns the estate being conveyed, which is not the trouble when ownership is sound but burdened. Quiet enjoyment shields the grantee from later eviction by someone holding superior title, and an easement holder's use is not an eviction. Further assurance obliges the grantor to sign additional documents needed to perfect title. A general warranty deed carries all of these along with the right to convey and warranty forever.

A neighbor has openly farmed and fenced a strip of an absentee owner's land, excluding others and never asking permission. To take title by adverse possession the neighbor must prove:

• a.Payment of the owner's property taxes for every year
• b.Open, notorious, continuous, hostile, and exclusive possession✓
• c.A written agreement signed by the record title owner
• d.A recorded deed describing the disputed strip of land

Adverse possession requires possession that is open and notorious, continuous, hostile in the sense of being without permission, and exclusive, held for the statutory period set by state law. Some states add payment of taxes or color of title, but those elements are not universal, so a broker should never assume them from another state's rule. A written agreement from the record owner would destroy the claim outright, since permission defeats hostility. Recording a deed creates no possession and cannot manufacture the required years of use. Adverse possession is one form of involuntary alienation, alongside descent, escheat, foreclosure, eminent domain, and accretion.

An owner dies leaving no will, and after a diligent search no heirs can be located. A broker asked to list the property should understand that title:

• a.Passes by devise to the beneficiaries named in a will
• b.Descends to the decedent's nearest surviving creditors
• c.Vests permanently in the administrator the court appoints
• d.Escheats to the state, an involuntary transfer of title✓

Escheat is the state's claim to property when an owner dies intestate and no heirs can be found, and it is a classic involuntary transfer rather than a voluntary one by deed or will. Devise is a gift of real property by will, so it cannot operate where there is no will and no named beneficiary. Descent carries property to heirs under the intestacy statute, but creditors are paid as claimants out of the estate and never inherit the land itself. An administrator has authority to manage and convey estate property during probate, not to own it permanently. Each state sets its own escheat procedure and waiting period.

A search reveals an old mortgage of record that was paid off but never released, and the lender no longer exists. Which step clears that cloud so title is marketable?

• a.Ordering an abstract of title with an attorney's opinion
• b.Buying an owner's title policy that insures over it
• c.Filing a quiet title action asking a court to clear it✓
• d.Recording a correction deed signed by the current seller

A quiet title action asks a court to determine ownership and extinguish a stale or unreleasable claim, which is the practical cure when the mortgagee has vanished and no release can be obtained. An abstract of title with an attorney's opinion summarizes and evaluates the recorded chain; it reports the cloud rather than removing it, and it offers no indemnity. An owner's policy may insure over a known risk, but insurance pays for loss and leaves the defect on the record for the next buyer to confront. A correction deed fixes a drafting error between the original parties and cannot release a third party's lien.

A seller deeds a parcel to one buyer and later deeds the same parcel to a second buyer, who records first. Which framework decides who owns the land?

• a.A federal recording statute applied in all fifty states
• b.The state's recording act, race, notice, or race-notice✓
• c.The order in which the two deeds were signed and dated
• d.The county recorder's discretion over competing claims

Priority between competing grantees is governed by the recording act of the state where the land lies, and the schemes differ: a pure race state protects whoever records first, a notice state protects a later purchaser who took without notice of the earlier deed, and a race-notice state protects one who took without notice and recorded first. No federal statute governs land recording. Signing dates do not decide the contest, which is precisely why a public recording system exists. Recorders act ministerially and have no power to resolve claims. Because the gap between closing and recording is the danger zone, a broker should press for prompt recording.

A buyer pays for a lender's title policy at closing and asks the broker whether it also protects the buyer's equity in the home. The correct answer is that the policy:

• a.Protects both parties equally up to the full purchase price
• b.Protects the buyer once the mortgage has been fully repaid
• c.Protects the buyer against defects arising after closing
• d.Protects only the lender, declining with the balance✓

A lender's, or mortgagee's, policy insures only the lender's security interest, and its coverage shrinks as the principal is paid down, ending altogether when the loan is satisfied. It never covers the buyer's equity, which is why a separate owner's policy is offered at closing for a one-time premium and lasts as long as the insured holds an interest. Repaying the mortgage does not convert the lender's coverage into the buyer's; it extinguishes it. And no title policy insures defects that first arise after its date. Brokers should explain this plainly before a buyer waives owner's coverage to save money.

Six months after closing, a contractor the buyer hired records a mechanic's lien against the home. The buyer files a claim under the owner's title policy. The insurer will most likely:

• a.Deny, because the defect arose after the policy was issued✓
• b.Pay, because owner's policies cover all future liens
• c.Pay, because the standard exceptions were removed
• d.Deny, because only a lender may file a title claim

Title insurance looks backward: it covers defects that already existed when the policy was issued but were not discovered or excepted, not events that happen later. A lien for work the buyer ordered after closing is a new problem the buyer must resolve directly. Buying extended coverage removes standard exceptions and broadens what is insured as of the policy date, but it does not push coverage forward in time. Owners plainly may claim under their own policies; the lender's policy is the one limited to the lender. Extended coverage typically depends on a current survey, which reveals encroachments and boundary issues a records search alone cannot.

A buyer tours a house and finds an occupant who is not the seller living there under an unrecorded lease. What kind of notice does that occupancy give the buyer?

• a.Actual notice, given by the seller's written disclosure
• b.Constructive notice, given by the public record
• c.No notice at all, since the lease was not recorded
• d.Inquiry notice, requiring the buyer to ask about it✓

Someone in possession who is not the seller puts a buyer on inquiry notice: the buyer is charged with whatever a reasonable investigation of that occupancy would have turned up, including an unrecorded lease or an option to purchase. Actual notice is what a party genuinely knows, typically from a disclosure or a conversation, and no one has told this buyer anything. Constructive notice comes from the public record, which by definition cannot reveal an unrecorded lease. Treating an unrecorded interest as invisible is the classic error, because possession is itself notice. A broker should always ask who occupies a property and on what terms.

A Montana licensee is served with a notice charging unprofessional conduct. To contest the charge, the licensee must submit a written request for a hearing that reaches the department within:

• a.10 days after receipt of the notice
• b.21 days after receipt of the notice✓
• c.45 days after receipt of the notice
• d.60 days after receipt of the notice

The window is set by 37-1-309(2), MCA: a request for a hearing must be in writing and received in the offices of the department within 21 days after the licensee's receipt of the notice, and failure to request a hearing constitutes a default on the charges, after which the board may decide the case on the facts available to it. The shorter period belongs to a different procedure — a trust-account citation under 37-51-324(5) gives 5 business days to pay or dispute — and reading that deadline across to a disciplinary notice loses the licensee two weeks of the time the statute actually allows. The longer periods track other timetables in the licensing scheme, such as the 45 days a board has under 37-1-307(1)(e) to grant or deny a complete application and the 60 days a licensee gets under 37-1-321(2) to cure a deficiency before an administrative suspension; neither governs a request for a contested-case hearing. Once a hearing is held, Title 2, chapter 4 governs the proceeding, and a person disciplined by the board may appeal to district court under 37-1-313(1).

After finding unprofessional conduct by a Montana real estate licensee, the board may impose a fine of no more than:

• a.$1,000 for each violation
• b.$2,500 for each violation
• c.$5,000 for each violation✓
• d.$10,000 for each violation

The sanction menu is at 37-1-312(1), MCA, and subsection (1)(g) authorizes 'payment of a fine not to exceed $5,000 for each violation,' with the fines deposited in the state general fund. The cap is per violation rather than per case, so a course of conduct producing several violations can produce several fines. The other figures are real Montana numbers attached to other things: $1,000 is the civil fine for a property manager's trust-account citation under 37-56-106(3), $2,500 is the maximum per-claim deductible on the board's group professional liability policy under 37-51-325(4)(b)(iii), and $10,000 is the baseline maximum deductible for a firm policy under 37-51-325(7)(c). None of them is the disciplinary fine ceiling. Alongside a fine the board may revoke or suspend the license, impose probation for a period not to exceed 3 years, restrict the practice, require remedial education, or censure the licensee.

A Montana broker misses the renewal date and does not renew for eight months. Under the general licensing statute, that broker is:

• a.practicing lawfully until the license terminates
• b.practicing on a lapsed but valid license
• c.exempt from discipline once the license expires
• d.practicing without a license if practice continues✓

Montana distinguishes a lapsed license from an expired one. Under 37-1-141(3), MCA a licensee may reactivate a lapsed license within 45 days after the renewal date, and 37-1-141(6)(a) says a licensee who practices with a lapsed license 'is not considered to be practicing without a license.' Past that 45-day window the license is expired, and 37-1-141(6)(b) is explicit: 'A licensee who practices after a license has expired is considered to be practicing without a license.' Eight months out, this broker is well past 45 days, so continuing to practice is unlicensed practice. Nor does expiry buy immunity: 37-1-141(9) keeps the board's disciplinary jurisdiction alive for 2 years after the date the license lapsed. An expired license can be reactivated within 2 years under 37-1-141(4), and one not renewed within 2 years of the most recent renewal date automatically terminates and cannot be reactivated at all.

A distinctive feature of Montana real estate regulation is that it:

• a.Prohibits property management by anyone other than a broker
• b.Separately licenses property managers under Title 37, Chapter 56 MCA✓
• c.Requires every broker to also hold a certified appraiser license
• d.Licenses property managers through the Department of Revenue

Managing rental property for others is its own licensed occupation in Montana, and the chapter moved. Property manager licensure used to sit in Title 37, chapter 51, part 6, now captioned "Licensure of Property Managers (Repealed)" and repealed by Sec. 17, Ch. 482, L. 2023. It now sits in Title 37, chapter 56, where 37-56-103 provides that a person may not practice as a property manager unless actively licensed under Title 37, chapter 1, and that part, and 37-56-102 places the licensing and rulemaking power with the department rather than with the Board of Realty Regulation; the board's power under 37-51-202 runs only to licences issued under chapter 51. A candidate citing chapter 51 for property managers is citing a repealed part. The separate credential does not fence brokers out: 37-56-104(2) says a broker or salesperson licensed under Title 37, chapter 51, may act as a property manager, and a salesperson may not act as one without a supervising broker. That is why describing the state as prohibiting property management by non-brokers has it backwards, and why 37-51-103(1)(i) exempts licensed property managers from the broker licensing provisions instead of forbidding them. Routing the credential through the revenue department confuses a tax agency with the occupational regulator, and appraisal is a separate discipline with its own credential.

Before a Montana licensee may openly advertise property belonging to another person, the licensee must have:

• a.a verbal listing authorization from the property owner
• b.a signed listing agreement valid on the advertisement date✓
• c.a written offer of cooperation from the listing broker
• d.an owner's written consent filed with the board office

Section 37-51-321(2)(a), MCA makes it unlawful for a broker or salesperson 'to openly advertise property belonging to others, whether by means of printed material, radio, television, or display or by other means, unless the broker or salesperson has a signed listing agreement from the owner of the property,' and the same sentence adds that the listing agreement 'must be valid as of the date of advertisement.' A verbal authorization does not satisfy a requirement written in terms of a signed agreement. An offer of cooperation from another broker is a different thing: 37-51-321(2)(b)(i) separately permits including other brokers' cooperating listings in materials given to prospective customers, and ARM 24.210.428(3) allows internet advertising of another firm's listings where both the listing agent and the owner have consented, but neither converts into authority to advertise property with no signed listing behind it. And nothing in the chapter routes owner consent through the board; the consent lives in the listing agreement between the owner and the broker.

Under the Board of Realty Regulation's advertising rule, every advertisement a Montana licensee places must include:

• a.the licensee's name and the licensee's board license number
• b.the supervising broker's name and the board's telephone number
• c.the licensee's name and a statement that a licensee placed it✓
• d.the brokerage's franchise name and the property's street address

ARM 24.210.428(1), adopted effective 23 August 2025 in place of the repealed internet-advertising rule, requires that any form of advertising by a licensee, directly or indirectly, include a truthful, accurate, and detailed description of the property or service advertised, the licensee's name, and a statement that the advertisement is made by the licensee or a brokerage company; in an internet advertisement a link to that information may be used. A license number is not among the required elements, and neither is the board's telephone number. The supervising broker's name is required on a salesperson's license under 37-51-308(2)(b), not in every advertisement. A street address is expressly not required — the repealed rule asked only for the city, town, or county, and the current rule asks for a detailed description rather than an address. Franchise branding has its own trap: under 37-51-321(1)(a) a broker advertising under a franchise name must incorporate the broker's own name or trade name in the franchise name or logotype.

A listing agreement negotiated by a Montana salesperson becomes valid only when it has been:

• a.reviewed, signed, and dated by the supervising broker✓
• b.acknowledged in writing by the board within ten days
• c.witnessed by a second licensee of the same brokerage
• d.recorded with the clerk and recorder of the county

ARM 24.210.607(3), the salesperson-supervision rule that replaced ARM 24.210.601 effective 21 February 2026, carries the requirement forward verbatim: 'A listing agreement negotiated by a salesperson is not valid until it is reviewed, signed, and dated by the supervising broker.' The validity of the agreement therefore turns on an act by the supervising broker, which is the point — supervision in Montana is a licensed duty, not a courtesy. The board plays no part in validating individual listing agreements; its role is licensing and discipline under 37-51-202. A second licensee's signature is not a Montana requirement and would not cure a listing the supervising broker never saw. Recording belongs to instruments affecting title to land, and a listing agreement is a contract for services between the owner and the broker rather than a conveyance.

A Montana salesperson wants to take listings for a second brokerage while remaining with the current one. Under the licensing statute this is:

• a.permitted if both supervising brokers agree in writing
• b.permitted if the second brokerage is in another county
• c.prohibited unless the salesperson holds a broker license
• d.prohibited except for a temporary association allowed by rule✓

Section 37-51-309(1), MCA states that 'a salesperson may not be associated with, be under contract to, or perform services for more than one supervising broker, except on a temporary basis as provided in 37-51-302,' and 37-51-309(5) adds that only one license issued to a salesperson is in effect at one time. The exception is narrow and procedural: ARM 24.210.607(2) lets a supervising broker temporarily transfer supervision of a salesperson to another supervising broker on written notice, a copy of which must reach the board within three business days, and a temporary transfer may not exceed 60 days in any 12-month period unless the board extends it for good cause. Mutual agreement between two brokers does not create a second permanent association; the temporary-transfer procedure is the only route. Geography is irrelevant to the rule. And upgrading to a broker license does not authorize divided allegiance — a broker who supervises salespersons needs a supervising broker endorsement under 37-51-301(2), which is a different question entirely.

A Montana licensee who is not a member of the trade association uses the term 'Realtor' in marketing. Under the license law this is:

• a.unprofessional conduct sanctionable by the board✓
• b.a private trademark matter outside the board's reach
• c.permissible because the term describes the occupation
• d.permissible if the licensee discloses non-membership

Section 37-51-321(1)(d), MCA lists as unprofessional conduct the 'use of the term "realtor" by a person not authorized to do so or using another trade name or insignia of membership in a real estate organization of which the licensee is not a member.' It is therefore a licensing offense in Montana, sanctionable under 37-1-312, and not merely a dispute between the licensee and the trademark owner — the statute makes the board a second enforcer alongside whatever private remedy exists. The term is not a generic description of the occupation: Montana's own vocabulary for the occupation is 'broker' and 'salesperson', defined at 37-51-102(4) and 37-51-102(19). And disclosure does not cure it, because the prohibition is on the use of the term by an unauthorized person rather than on any impression the use leaves; the statute offers no disclosure exception.

A Montana buyer is out of state and asks her agent to sign an addendum on her behalf. The agent may do so only with:

• a.a recorded email in which the buyer approves the terms
• b.the supervising broker's written authorization on file
• c.a written power of attorney from the buyer✓
• d.a signed acknowledgment from the opposing licensee

ARM 24.210.641(1)(h) makes it unprofessional conduct to be 'falsifying documents, placing any party's signature on a document, or altering or amending a document on behalf of any party without authority of a written power of attorney from the party.' The rule names the instrument, and only that instrument will do: authority to sign for a principal has to come from a written power of attorney, not from an email approving the substance of the deal. A supervising broker cannot supply the authority either, because the authority being exercised belongs to the client and not to the firm. Nor can the other side's licensee confer it. If the buyer approves the terms by email but no power of attorney exists, the correct course is to have the buyer sign — electronically if need be — because ARM 24.210.641(1)(l) separately requires licensees to document agreements in writing and have them signed by the parties.

A Montana licensee telephones a buyer to say the seller has accepted the buyer's offer. Under board rule the licensee may say this only if the licensee:

• a.holds a document signed by the seller showing acceptance✓
• b.has the seller's verbal confirmation of the acceptance
• c.has the listing broker's assurance of the acceptance
• d.has recorded the seller's acceptance in the transaction file

ARM 24.210.641(1)(i) makes it unprofessional conduct to be 'advising that an offer or counter offer has been accepted without the licensee having in the licensee's possession a document signed by the party evidencing the party's acceptance.' The test is possession of a signed document, which is why a verbal confirmation from the seller is not enough however credible it sounds, and why an assurance relayed by the listing broker is not enough either — neither puts a signed writing in this licensee's hands. Writing a note in the file records the licensee's belief rather than the seller's signature, so it does not satisfy a rule aimed at the document itself. The same instinct runs through the board's rules generally: ARM 24.210.641(1)(l) requires agreements and any changes between execution of the buy-sell and closing to be documented in writing and signed by the parties.

A Montana broker wants to split a commission with a broker licensed in Idaho who referred a client. The Montana broker may pay that share if the Idaho broker:

• a.holds a Montana nonresident salesperson license as well
• b.files an irrevocable consent to service with the department
• c.is named in the listing agreement signed by the seller
• d.performed no service in Montana for which a fee is paid✓

Section 37-51-306(1), MCA bars a licensed broker from employing or compensating an unlicensed person for the acts the chapter regulates, then supplies one exception: 'a licensed broker may pay a commission to a licensed broker of another state or jurisdiction if the nonresident broker has not conducted and does not conduct in this state a service for which a fee, compensation, or commission is paid.' Everything turns on where the service was performed, and the referral survives only because the out-of-state broker stayed out of the Montana side of the work. A Montana nonresident license would make the person a Montana licensee, which is a different route to the same money rather than the exception in the statute. The irrevocable written consent to service of process in 37-51-306(2) is a condition placed on nonresident licensees, not a license substitute for an unlicensed out-of-state broker. And naming someone in a listing agreement cannot confer a license the chapter requires.

A person sues in a Montana court to collect a commission on a real estate sale. To maintain the action the person must allege and prove that at the time the claim arose the person:

• a.had a written commission agreement with the seller
• b.was licensed as a broker or salesperson in Montana✓
• c.had performed services of measurable value for the client
• d.had registered the transaction with the licensing board

Section 37-51-401, MCA closes the courthouse door to unlicensed brokerage: a person acting in the capacity of a real estate broker or salesperson in Montana 'shall not be permitted to bring or maintain any action in the courts for the collection of compensation for the sale or lease or otherwise disposing of real estate without first alleging and proving that such person was a duly licensed real estate broker or real estate salesperson ... at the time the alleged cause of action or claim arose.' Licensure is thus an element of the pleading, and it is tested as of the date the claim arose rather than the date of trial. A written agreement may be needed to prove the contract's terms, and quantum-meruit style proof of valuable services may matter in other kinds of case, but neither substitutes for the licensure allegation this section demands. No statute requires transactions to be registered with the board, so that is not a precondition to suit either.

A Montana broker buys a listed property for the broker's own account and advertises it for resale. Under the license law the broker must:

• a.place the transaction in a separate corporate entity's name
• b.obtain board approval before advertising the property
• c.surrender the listing to another firm before advertising
• d.disclose the dual capacity as broker and principal in the ads✓

Section 37-51-321(1)(g), MCA makes it unprofessional conduct to be 'acting in a dual capacity of broker and undisclosed principal in a transaction, including failing to disclose in advertisements for real property the person's dual capacity as broker and principal.' The clause was written to reach exactly this fact pattern, and the cure it names is disclosure in the advertising itself. Interposing an entity does not help; it is the concealment that the statute punishes, and a corporate wrapper makes the principal less visible rather than more. There is no board pre-approval mechanism for advertising a licensee's own property. And handing the listing to another firm is not required — a licensee may deal for the licensee's own account, provided the dual capacity is disclosed. Related traps sit nearby: ARM 24.210.641(1)(ll) forbids acting as a dual agent in a transaction in which the licensee is a principal, and ARM 24.210.641(1)(pp) forbids submitting a competing offer as a principal against the licensee's own client.

A Montana licensee recommends a title company in which the licensee's spouse is a part owner. Under board rule the licensee must disclose:

• a.the family and financial relationship with that company✓
• b.the fee the title company will charge for its services
• c.the names of two competing title companies in the area
• d.the licensee's total earnings from prior referrals to it

ARM 24.210.641(1)(e) makes it unprofessional conduct to be 'engaging or recommending the services of an attorney, title company, appraiser, escrow agent, maintenance service, or other like person or entity, on behalf of a principal, third-party, or other person, without disclosing any family relationship, financial relationship, and/or financial interest that the licensee or real estate agency with which the licensee is associated may have in that person or entity being engaged or recommended.' The disclosable thing is the relationship, and a spouse's ownership stake is both a family and a financial one. The rule does not require the licensee to publish the vendor's fee schedule, to name competitors, or to tally past referral income; those may be good practice but they are not what the rule commands, and a licensee who volunteers them while staying silent about the spouse has disclosed everything except the conflict. A separate clause, ARM 24.210.641(1)(d), also requires consent from whoever is obligated to pay for the service before engaging it on their behalf.

A Montana seller tells the listing agent that a previous occupant died by suicide in the house. Under the statutory definition, that fact is:

• a.an adverse material fact requiring written disclosure
• b.excluded from the meaning of adverse material fact✓
• c.an adverse material fact only if the buyer asks about it
• d.a matter the licensee must report to the licensing board

Montana defines the term and then carves this out. Section 37-51-102(1)(a), MCA defines an 'adverse material fact' as one significant enough to affect a person's decision to buy or sell, and 37-51-102(1)(b) adds that 'the term does not include the fact that an occupant of the property has or has had a communicable disease or that the property was the site of a suicide or felony.' Because the duties in 37-51-313 to disclose adverse material facts are framed around that defined term, a stigma of this kind falls outside them by operation of the definition rather than by the licensee's judgment. The exclusion is not switched on by a buyer's question — the fact simply is not an adverse material fact under the chapter. And nothing in the chapter turns a property's history into a report to the board; the board receives complaints about licensee conduct under 37-1-308, not property histories. Physical conditions are treated differently: a fact that materially affects value or structural integrity, or presents a documented health risk to occupants, remains squarely within 37-51-102(1)(a)(i).

When must a Montana seller agent give the seller the written initial relationship disclosure?

• a.At the time the first offer is presented to the seller
• b.At the time negotiations with a buyer commence
• c.At the time the property is entered in the listing service
• d.At the time the listing agreement is executed✓

Section 37-51-314(2)(a), MCA fixes the moment: 'The initial disclosure, as provided in subsection (6), must be made to the seller at the time the listing agreement is executed.' The buyer-side mirror image is 37-51-314(3)(a), which times the buyer's initial disclosure to the execution of the buyer broker agreement. The commencement of negotiations is the trigger for a different document — the subsequent disclosure under 37-51-314(2)(b) and (2)(c), given to the seller where the licensee is a seller subagent and to the buyer or buyer agent when negotiations start. Presentation of an offer and entry into a listing service are not disclosure triggers anywhere in the section. A third timing rule is worth carrying alongside these: under 37-51-314(4)(a) a statutory broker's initial disclosure goes to the buyer at the time the statutory broker first endeavours to locate property for the buyer.

A Montana licensee representing the seller is asked to also represent the buyer on the same property. The licensee may proceed only with:

• a.the signed written consent of both the seller and the buyer✓
• b.the signed written consent of the party who first engaged
• c.the supervising broker's written designation of the licensee
• d.an oral acknowledgment from each party before negotiations

The all-capital statement that 37-51-314(6)(b), MCA requires in the initial disclosure ends: 'A BROKER OR A SALESPERSON MAY NOT ACT AS A DUAL AGENT WITHOUT THE SIGNED, WRITTEN CONSENT OF BOTH THE SELLER AND THE BUYER.' Section 37-51-314(5) adds that the licensee must disclose the potential or actual dual agency and receive consent before or at the time the dual agency arises, and ARM 24.210.641(1)(mm) makes acting as a dual agent without a written agreement from each principal unprofessional conduct. Consent from only the first client leaves the second client unrepresented in the eyes of the statute. A supervising broker's designation produces something different: under 37-51-102(12) and (13) an in-house buyer or seller agent designate acts exclusively for that one party and 'may not be considered a dual agent' under 37-51-102(10), which is the structure firms use to avoid dual agency rather than to create it. Oral acknowledgment fails on the face of a provision that says signed and written.

A Montana licensee shows property to a buyer without any written agreement and without disclosing a different relationship. Under the chapter the licensee is presumed to be:

• a.a buyer agent by virtue of assisting the buyer
• b.a seller subagent under the listing broker
• c.a statutory broker who represents neither party✓
• d.a dual agent owing duties to buyer and seller

Montana's default is the statutory broker. Section 37-51-102(23)(a), MCA defines a statutory broker as 'a broker or salesperson who assists one or more parties to a real estate transaction without acting as an agent or representative of any party,' and 37-51-102(23)(b) supplies the presumption: a broker or salesperson 'is presumed to be acting as a statutory broker unless the broker or salesperson has entered into a listing agreement with a seller or a buyer broker agreement with a buyer or has disclosed, as required in this chapter, a relationship other than that of a statutory broker.' Agency here is created by a written agreement or a disclosure, not by helpfulness, so assisting a buyer does not make the licensee a buyer agent. Subagency under 37-51-102(22) arises from an offer of subagency that is accepted, which has not happened. And dual agency requires signed written consent from both sides under 37-51-314(5) and (6)(b). A statutory broker is not without duties: 37-51-313(6) requires disclosure of known adverse material facts to each side and reasonable care, skill, and diligence in putting the transaction together.

A Montana dual agent learns that the buyer would pay more than the price offered. Without written consent the dual agent may not disclose that fact because it is:

• a.confidential information the statute expressly protects✓
• b.an adverse material fact the seller may waive in writing
• c.privileged under the attorney-client rules of evidence
• d.outside the scope of the dual agent's written authorization

Section 37-51-313(8), MCA lists four things a dual agent may not disclose without the written consent of the person to whom the information is confidential: that the buyer is willing to pay more than the offered price; that the seller is willing to accept less than the asking price; the factors motivating either party to buy or sell; and any information a party puts in writing as confidential. The protection comes from the statute itself, so it is not a matter of scope in the agency agreement, and it is not the evidentiary attorney-client privilege, which protects communications with a lawyer rather than with a licensee. Calling it an adverse material fact inverts the section: 37-51-313(7) says a dual agent must disclose adverse material facts regardless of confidentiality considerations, which is precisely why the four items in subsection (8) had to be listed separately as the things that stay confidential. Adverse material facts under 37-51-102(1) concern the property and the parties' ability to perform, not their price flexibility.

After a Montana listing agreement expires, which obligation to the former principal survives?

• a.Accounting for all money and property of the principal✓
• b.Continuing to market the property until a buyer is found
• c.Presenting any offers that arrive after the expiration date
• d.Advising the principal on the terms of a later transaction

Section 37-51-313(12), MCA says that on termination of an agency relationship a broker or salesperson 'does not have any further duties to the principal' except two: to account for all money and property of the principal under (12)(a), and to keep confidential the information made confidential at the principal's direction under (12)(b), subject to listed exceptions such as disclosure required by law, disclosure of adverse material facts, or disclosure reasonably necessary to defend the licensee's conduct. Marketing, presenting offers, and advising are all performance obligations, and 37-51-313(11)(a) ends the relationship at the earliest of completed performance, the expiration date agreed in the listing agreement or buyer broker agreement, or an authorized termination. Once that date passes the licensee owes none of them. A statutory broker's relationship runs on a different clock under 37-51-313(11)(b): it continues until the completion, termination, or abandonment of the transaction that gave rise to it.

Under the Montana license law, a copy of a written instrument must be furnished to a party who executes it:

• a.within three business days after the party executes it
• b.within ten days after the transaction has closed
• c.on the party's written request at any time before closing
• d.at the time the party executes the instrument✓

Section 37-51-321(1)(o), MCA makes it unprofessional conduct to be 'failing voluntarily to furnish a copy of a written instrument to a party executing it at the time of its execution.' Two words carry the weight: 'voluntarily', which means the licensee does not wait to be asked, and 'at the time', which leaves no grace period. A rule keyed to a written request would drop the first of those, and any of the delayed deadlines would drop the second. Three business days is a real Montana deadline attached to something else — ARM 24.210.427(4)(d) gives a broker three business days to deposit monies belonging to others into a trust account. Ten days appears in yet other contexts, such as the notice of a change of business address under 37-51-308(3). Documentation duties continue after execution: ARM 24.210.641(1)(l) requires changes to terms between the buy-sell and the closing to be documented in writing and signed by the parties.

The parties to a Montana sale verbally agree to change the closing date after the buy-sell is signed. Under board rule the licensee must:

• a.note the change in the transaction file and inform the broker
• b.obtain the supervising broker's written approval of the change
• c.document the change in writing and have the parties sign it✓
• d.submit an amended buy-sell to the board for its records

ARM 24.210.641(1)(l) makes it unprofessional conduct to be 'failing to document in writing and obtain signatures by the parties to all agreements,' and adds the specific duty that reaches this fact pattern: 'Licensees shall document in writing, and have signed by the parties, any changes to the terms and provisions of the agreement which occur between the time a buy/sell is executed and the closing of a transaction.' The rule names both steps — the writing and the signatures — so a file note is only half of it, however diligent. Internal approval by the supervising broker addresses supervision rather than the parties' contract, and a firm cannot sign an amendment on the parties' behalf without a written power of attorney under ARM 24.210.641(1)(h). The board does not maintain a registry of transaction documents; the licensee retains them, and ARM 24.210.414 requires the retention to run eight years.

A Montana salesperson receives an earnest money check from a buyer in a brokerage transaction. The salesperson must:

• a.deposit it in the brokerage trust account within three days
• b.place it with the supervising broker as soon as practicable✓
• c.hold it until the seller has accepted the buyer's offer
• d.endorse it to the closing agent named in the buy-sell

Section 37-51-321(1)(r), MCA makes it unprofessional conduct for a salesperson to fail 'to place, as soon after receipt as is practicably possible, in the custody of the salesperson's supervising broker, deposit money or other money entrusted to the salesperson in that capacity by a person,' with an exception only where the money is part of the salesperson's own personal transaction. The salesperson's duty runs to the broker, not to the bank: the three-business-day deposit obligation in ARM 24.210.427(4)(d) is the broker's, and ARM 24.210.427(1) frames trust-account maintenance as the broker's responsibility throughout. Holding the check pending acceptance keeps client money in the hands of the person least accountable for it and postpones the very transfer the statute requires. Endorsing it onward to a closing agent is not the salesperson's call either; under ARM 24.210.427(9) trust funds may go to the closing agent in anticipation of closing only on the written agreement of the buyers and sellers.

A Montana licensee holds rent money collected for an owner and cannot produce an accounting when the owner asks. Under the license law this is:

• a.unprofessional conduct for failing to account for others' money✓
• b.a civil matter between the owner and the licensee alone
• c.acceptable if the licensee later remits the correct amount
• d.excused where the owner signed a management agreement

Section 37-51-321(1)(e), MCA lists as unprofessional conduct 'failing to account for or to remit money coming into the licensee's possession when the money belongs to others.' The duty is stated in the disjunctive — failing to account is itself the offense, so paying up afterwards does not undo the failure to have been able to account in the first place. Because the statute makes it a licensing offense, it is not merely a private dispute; the board may impose any sanction in 37-1-312, and 37-1-316(1)(o) independently reaches misappropriating funds from a client or failing to comply with a board rule on the accounting and distribution of a client's funds. A management agreement authorizes the licensee to hold and apply the money; it does not convert the owner's money into the licensee's or relieve the licensee of the ledger. ARM 24.210.427(7) spells out what the record must show: a chronological record of every receipt and disbursement with dates, parties, amounts, and a running balance.

Before performing the acts of a buyer agent in Montana, a licensee must obtain:

• a.a written offer of subagency from the listing broker
• b.a signed acknowledgment of the agency disclosure form
• c.a written buyer broker agreement from the buyer✓
• d.an oral engagement confirmed in the transaction file

Section 37-51-313(10), MCA requires a licensed broker or salesperson to 'obtain an appropriate written buyer broker agreement or written listing agreement prior to performing the acts of a buyer agent or a seller agent,' and adds the sting in the tail: a licensee who acts as a buyer or seller agent without one 'is nevertheless obligated to comply with the requirements of this chapter.' Skipping the paperwork does not skip the duties. ARM 24.210.641(1)(jj) and (kk) make acting as a buyer agent without a written buyer broker agreement, or as a seller agent without a written listing agreement, unprofessional conduct. An offer of subagency creates a subagent under 37-51-102(8), which is a relationship with the other side's principal rather than an engagement by this buyer. The signed agency disclosure required by 37-51-314 records the relationship but does not create it. And an oral engagement is exactly what 37-51-102(7)'s definition of a buyer broker agreement — 'a written agreement' — excludes.

A Montana seller accepts an offer. A second, higher offer then arrives before closing. The seller agent must:

• a.decline the second offer because the property is under contract
• b.submit the second offer only if the first buyer's financing fails
• c.submit the second offer only after consulting the listing service
• d.submit the second offer unless the seller waived that in writing✓

ARM 24.210.641(1)(n) makes it unprofessional conduct for a seller's agent to fail 'to submit to the seller all offers and counter offers received by the licensee until such time as a pending transaction has been closed or the listing agreement terminates unless the seller waives these obligations in writing.' A contract in hand does not end the duty; only closing, termination of the listing, or a written waiver does. The same clause draws a line the other way that is easy to over-read: seller agents 'are not obligated to continue to actively market the property after an offer has been accepted by the seller unless directed in writing to do so by the seller' — so marketing may stop while the duty to pass on offers continues. Waiting for the first buyer's financing to fail substitutes the licensee's judgment for the seller's, which is the decision the rule reserves to the principal. A listing service's rules are private and cannot displace the board's rule. The buyer side has a mirror duty in ARM 24.210.641(1)(p).

A Montana brokerage wants to run a prize drawing to attract buyers to a new subdivision. Under board rule the drawing is permitted only if entrants:

• a.are told the odds of winning before they enter the drawing
• b.pay no consideration and enter no contract to take part✓
• c.are all licensed or accompanied by a licensed practitioner
• d.have signed a buyer broker agreement with the brokerage

ARM 24.210.641(1)(bb) makes it unprofessional conduct to be 'soliciting, selling, or offering for sale real property by conducting lotteries, raffles, or contests for the purpose of influencing a purchaser or prospective purchaser of real property,' and then draws the line the question turns on: 'Door prizes can be awarded so long as the participant is not required to pay any consideration or enter into any contract arrangement in order to participate in the door prize drawing.' Consideration and contract are the two things that convert a giveaway into the prohibited inducement, so disclosing the odds does not help — the objection is to buying a chance, not to misunderstanding it. Restricting entry to licensees would defeat the marketing purpose without addressing the rule. And requiring a buyer broker agreement to enter is the contract arrangement the rule expressly forbids. The statute reaches the same conduct: 37-51-321(1)(m) lists conducting lotteries to influence purchasers as unprofessional conduct.

To win a listing, a Montana licensee tells the owner that a buyer of the lot next door is certain to resell at a profit within a year. This is:

• a.acceptable if the licensee's market data support the estimate
• b.acceptable if the statement is labeled as an opinion of value
• c.unprofessional conduct as a guarantee of future profits✓
• d.unprofessional conduct only if the resale later loses money

Section 37-51-321(1)(h), MCA lists as unprofessional conduct 'guaranteeing, authorizing, or permitting a person to guarantee future profits that may result from the resale of real property.' The offense is complete when the guarantee is made, so the eventual outcome is beside the point — a lucky prediction is still a prohibited guarantee. Market data can support an opinion but cannot turn a guarantee into a forecast, and the clause does not carve out well-researched guarantees. Labeling the statement an opinion of value does not save it either, because what is being promised is a future gain rather than a present worth; a licensee who wants to speak about value should give a comparative market analysis for what it is. Neighboring clauses reinforce the point: 37-51-321(1)(b) reaches 'making any false promises of a character likely to influence, persuade, or induce', and 37-51-321(1)(c) reaches a continued and flagrant course of misrepresentation.

When water or mineral rights on a Montana property are severed or uncertain, the licensee should:

• a.Guarantee the buyer will receive all rights
• b.Say nothing to avoid alarming the buyer
• c.Disclose known material facts to the buyer✓
• d.Wait until after closing to mention it

A Montana licensee's disclosure duty runs to adverse material facts that are known. Under 37-51-313(3)(a), MCA a seller agent must disclose to a buyer or the buyer agent any adverse material facts concerning the property that are known to the agent, and 37-51-313(6)(a)(i) imposes the same duty on a statutory broker; 37-51-102(1)(a)(i) defines an adverse material fact to include one that materially affects the value of the property, which severed or clouded water or mineral rights plainly can. The agent is not required to inspect the property or verify the seller's statements, so the right course is to say what is known and steer the buyer to professionals who can run the ownership down. Guaranteeing that the buyer will receive all rights promises what the licensee has not verified, and 37-51-321(1)(b) reaches false promises likely to influence or induce. Saying nothing is concealment, and 37-51-313(13) directs a licensee to endeavor to ascertain all pertinent facts so as to avoid error, exaggeration, misrepresentation, or concealment. Waiting until after closing is the same failure with worse timing, since the information matters only while the buyer can still act on it.

A Montana broker buys an individual professional liability policy instead of joining the board's group policy. The individual policy must carry a per-claim limit of at least:

• a.$50,000
• b.$100,000✓
• c.$300,000
• d.$1 million

Section 37-51-325(6), MCA sets the floor for a policy issued independently to a licensee: a minimum per-claim limit of $100,000, a minimum annual aggregate limit of $300,000, and a deductible maximum of $2,500 a claim. The same per-claim and aggregate figures govern the board's group policy under 37-51-325(4)(b). The $300,000 figure in the alternatives is the annual aggregate rather than the per-claim limit, and $1 million is the minimum annual aggregate where the policy is issued to the firm the licensee is affiliated with, under 37-51-325(7)(b) — a firm policy also carries a maximum deductible of $10,000 a claim, which may run up to $100,000 only with board approval based on a qualified accountant's letter under ARM 24.210.438. Coverage is not optional: 37-51-325(1) requires continuous coverage during the period of licensure, 37-51-325(8) requires proof at issue and renewal, and 37-51-321(1)(w) makes failing to maintain it unprofessional conduct.

A Montana condominium deed describes the unit but says nothing about the common elements. Under the Unit Ownership Act the buyer receives:

• a.only the unit, with the common interest retained by the seller
• b.only the unit, with the common interest held by the association
• c.the unit plus a common interest fixed by the association's bylaws
• d.the undivided interest in the common elements with the unit✓

Section 70-23-404, MCA is written for exactly this omission: 'The undivided interest in the common elements shall not be separated from the unit to which it appertains and shall be conveyed or encumbered with the unit even though such interest is not expressly mentioned or described in the conveyance or other instrument.' The interest travels with the unit as a matter of law, which is why neither the seller nor the association can be left holding it. The size of that interest is not set by the bylaws either: 70-23-403(1) ties each owner's percentage to the declaration, in the approximate relation that the unit's value at the date of the declaration bears to the combined value of all units sharing the common element, and 70-23-403(2) allows that percentage to change only if all owners with an interest in the element agree and record an amendment. Section 70-23-405 completes the picture by keeping the common elements undivided and voiding any covenant permitting partition.

A Montana property is sold at a trustee's sale under a trust indenture foreclosed by advertisement and sale. After the sale the grantor has:

• a.a one-year right to redeem by paying the sale price
• b.no right of redemption in the property sold✓
• c.a six-month right to redeem by paying the debt in full
• d.a right to redeem until the trustee's deed is recorded

Section 71-1-318(3), MCA states that the trustee's deed 'operates to convey to the purchaser, without right of redemption, the trustee's title and all right, title, interest, and claim of the grantor and the grantor's successors in interest.' That is the defining trade in the Small Tract Financing Act: the borrower loses the redemption period that follows a judicial mortgage foreclosure, and in exchange 71-1-317 bars any deficiency judgment against the grantor once a trust indenture is foreclosed by advertisement and sale. None of the redemption periods offered survives a trustee's sale, and none of them starts at the recording of the trustee's deed — recording under 71-1-318(2) makes the deed's recitals prima facie evidence, and conclusive evidence in favor of subsequent bona fide purchasers, rather than opening a redemption window. The Act is not available for every parcel: 71-1-304(1) allows a transfer in trust only of an interest in real property 'of an area not exceeding 40 acres', and 71-1-304(3) leaves the beneficiary the option of foreclosing judicially instead.

A Montana residential tenancy ends and the manager intends to charge for damage and cleaning. The written list of those charges must reach the departing tenant within:

• a.10 days after the tenancy terminates
• b.14 days after the tenancy terminates
• c.30 days after the tenancy terminates✓
• d.45 days after the tenancy terminates

Security deposits sit in their own chapter, Title 70, chapter 25, rather than in the Residential Landlord and Tenant Act at Title 70, chapter 24. Section 70-25-202(1)(a)(i), MCA requires each landlord, within 30 days after the termination of a tenancy or within 30 days after a surrender and acceptance of the premises, whichever occurs first, to give the departing tenant a written list of any rent due and any damage and cleaning charges, and to deliver with it the difference between the deposit and the permitted charges. The 10-day figure governs the clean case: under 70-25-202(1)(b)(i), where there are no damages, no cleaning required, no unpaid rent and no unpaid utilities, the deposit must be returned within 10 days. The other periods appear nowhere in the chapter. Missing the deadline is expensive — 70-25-203 provides that a landlord who fails to provide the written list "shall forfeit all rights to withhold any portion of the security deposit for the damages or cleaning charges" — and 70-25-201(3)(a) separately bars deducting cleaning charges until written notice has been given to the tenant. Violating chapter 25 is also unprofessional conduct for a licensee under ARM 24.210.641(1)(t).