Montana Real Estate Broker Exam — All Questions

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).