State Foreclosure Law Library

montana

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Montana — Tax & Mortgage Foreclosure

Legal information, not legal advice. Verify against the cited primary sources before acting. Last verified: 2026-06-01.

Montana is a tax-lien state with a distinctive assignment model. The county treasurer does not auction liens to the public at the delinquency stage. Instead, after taxes go delinquent the county itself becomes the possessor of the tax lien (the “tax lien sale” is, in effect, a sale to the county) (MCA § 15-17-125, § 15-17-214). A private investor acquires a position only by purchasing an assignment of the county’s tax lien under MCA § 15-17-323, paying the delinquent taxes, penalties, interest, and costs, and giving statutory pre-purchase notice. Redemption runs for 36 months from the date of the first day of the tax lien sale (24 months for certain vacant/unimproved special-assessment lots) (MCA § 15-18-111). If the lien is not redeemed and the assignee perfects the statutory § 15-18-212 notice, the treasurer issues a tax deed.

Critically, Montana reformed its surplus rule in 2019 by SB 253 (Ch. 317, L. 2019) — four years before tyler-v-hennepin-county (2023). For occupied residential property, the assignee no longer takes a windfall deed; instead the treasurer must sell the property at public auction (MCA § 15-18-219, § 15-18-220) and return the surplus over the tax debt to the legal titleholder of record (MCA § 15-18-221). That structure makes Montana effectively compliant with Tyler for occupied homes, though a gap remains for non-residential property, where the assignee may still take a tax deed directly under MCA § 15-18-211 without an auction or surplus return (a potential post-Tyler vulnerability flagged below). Mortgage debt is foreclosed predominantly non-judicially under the Small Tract Financing Act (trust indentures on ≤40 acres, Title 71, Ch. 1, Part 3), with no post-sale redemption and no deficiency; judicial mortgage foreclosure (Title 71, Ch. 1, Part 2) carries a 1-year statutory redemption (MCA § 25-13-802) but also bars deficiencies on owner-occupied single-family residences (Chunkapura).

0. Identity & Classification

  • Recording unit: county (count: 56). [Source: Montana has 56 counties — general knowledge; flagged in needs_verification for an official count cite.]
  • Tax sale type: tax lien (certificate) with assignment. The county is the default possessor of the lien (MCA § 15-17-125); investors buy an assignment (MCA § 15-17-323). For occupied residences the back end converts to a public-auction tax-deed with surplus return (MCA § 15-18-219 to -221). [Source: mca.legmt.gov — § 15-17-125, § 15-17-323, § 15-18-219/-220/-221]
  • Tax foreclosure process: administrative — the county treasurer issues the tax deed (or conducts the auction) after statutory notice; no court action is required to vest title. A separate quiet-title action is available/used to clear title (MCA § 15-18-411). [Source: mca.legmt.gov — § 15-18-211, § 15-18-411]
  • Mortgage foreclosure process: both — predominantly non-judicial trustee’s sale under the Small Tract Financing Act (Title 71, Ch. 1, Part 3); judicial foreclosure available under Title 71, Ch. 1, Part 2.
  • Selling authority: county treasurer (tax lien possession, assignment, tax deed, and § 15-18-220 auction); trustee (deed-of-trust / trust-indenture sale); sheriff (judicial / execution sale).
  • Statutory home: Tax liens — Title 15, Ch. 17 — https://mca.legmt.gov/bills/mca/title_0150/chapter_0170/parts_index.html ; Tax deeds / redemption / surplus — Title 15, Ch. 18 — https://mca.legmt.gov/bills/mca/title_0150/chapter_0180/parts_index.html ; Small Tract Financing Act — Title 71, Ch. 1, Part 3 — https://mca.legmt.gov/bills/mca/title_0710/chapter_0010/part_0030/sections_index.html
  • Tyler v. Hennepin compliance: reformed_post_Tyler / effectively compliant pre-Tyler (residential). SB 253 (Ch. 317, L. 2019) created the public-auction + surplus-return mechanism for occupied residential property in MCA § 15-18-219 through § 15-18-221, returning surplus to the “legal titleholder of record” — enacted before Tyler (2023). Open gap: non-residential property may still be deeded directly to the assignee under § 15-18-211 without auction/surplus, which is the residual Tyler exposure. [Source: mca.legmt.gov — § 15-18-221 History “En. Sec. 3, Ch. 317, L. 2019; amd. Sec. 9, Ch. 17, L. 2021”]

1. Tax Sale Mechanics

  • What is sold: a tax lien; the county is the possessor by default (MCA § 15-17-125). Investors acquire by assignment (MCA § 15-17-323).
  • Bidding method: not a competitive auction at the lien stage — assignment is essentially first-come at a fixed statutory price (delinquent taxes + penalties
    • interest + costs + assignment fee). Competitive bidding occurs only at the back-end residential tax-deed auction under § 15-18-220 (highest-bid deed). [Source: mca.legmt.gov — § 15-17-323, § 15-18-220]
  • Interest / penalty (redemption accrual): interest on delinquent taxes accrues at 5/6 of 1% per month (10% per annum), plus a 2% penalty, under MCA § 15-16-102. The redemption amount includes these plus subsequent taxes at the same rate (MCA § 15-18-112). [Source: mca.legmt.gov — § 15-18-112 (refers to rate in § 15-16-102); corroborated by Gallatin County Treasurer]
  • Minimum bid composition (residential § 15-18-220 auction): delinquent taxes, penalties, interest, costs, the amount the assignee paid (incl. fees), plus an amount equal to one-half of the most recent assessed value as the opening bid. [Source: mca.legmt.gov — § 15-18-220]
  • Sale frequency / typical month: tax lien attaches no later than the first working day in August each year (MCA § 15-17-125). Assignment notice may not be mailed earlier than August 15 (MCA § 15-17-323). [Source: mca.legmt.gov — § 15-17-125, § 15-17-323]
  • Venue / platforms: county treasurer’s office; assignment is over-the-counter (not a public online lien auction). [Source: county treasurer pages — Gallatin, Missoula]
  • Registration & deposit: assignee must give certified-mail pre-purchase notice to the assessed owner, mailed ≥2 weeks before purchase, not earlier than Aug. 15 and not more than 60 days before purchase (MCA § 15-17-323). Residential auction bidders post a deposit set in the § 15-18-220 notice.
  • Subsequent taxes (“subs”): the assignee pays later years’ delinquencies; these are added to the redemption amount with interest at the § 15-16-102 rate (MCA § 15-18-112). [Source: mca.legmt.gov — § 15-18-112]

2. Right of Redemption → see right-of-redemption

  • Pre-sale right: the owner may pay delinquent taxes at any time before a lien attaches/assigns; redemption is the operative right after attachment.
  • Post-sale period: 36 months from the date of the first day of the tax lien sale, or 60 days after the § 15-18-212 notice is given, whichever is later; 24 months for certain residential/commercial lots with delinquent special assessments and no structures (MCA § 15-18-111). [Source: mca.legmt.gov — § 15-18-111]
  • Who may redeem: the owner, the holder of an unrecorded or improperly recorded interest, the occupant, or any interested party (mortgagees, contract vendors, recorded lienholders) (MCA § 15-18-111). [Source: mca.legmt.gov — § 15-18-111]
  • Amount formula: property tax lien amount + penalties + interest (10%/yr; 5/6 of 1% per month) + costs + subsequent taxes at the same rate, plus the assignment fee (MCA § 15-18-112, § 15-16-102). [Source: mca.legmt.gov — § 15-18-112]
  • Premium to certificate holder: none beyond statutory interest/penalty; Montana does not bid down interest, so the holder earns the fixed § 15-16-102 rate.
  • Procedure: redemptioner pays the county treasurer; the treasurer files the redemption (MCA § 15-18-113) and distributes proceeds (MCA § 15-18-114). [Source: mca.legmt.gov — § 15-18-113, § 15-18-114]
  • Extinguishment: the right ends when the redemption period expires and the treasurer issues a tax deed (or, for residences, conducts the § 15-18-220 auction). Defective § 15-18-212 notice voids the deed (see Module 6).
  • Special tolling: the § 15-18-411 quiet-title statute contains provisions for indigent / disabled owners; SCRA and bankruptcy operate as federal overlays. See bankruptcy-automatic-stay, scra-protections. [Detail flagged in needs_verification.]

3. Surplus / Excess Proceeds → see surplus-funds, third-party-recovery-rules

  • Belongs to: the legal titleholder of record (former owner), for surplus from a § 15-18-220 residential tax-deed auction (MCA § 15-18-221(3)). [Source: mca.legmt.gov — § 15-18-221]
  • Claim waterfall (residential auction proceeds, MCA § 15-18-221):
    1. To the assignee, if the deed is bought by someone else: the amount paid for the assignment (delinquent taxes, penalties, interest, costs) plus all amounts paid under § 15-18-219(2);
    2. Surplus to the legal titleholder of record, distributed by the treasurer within 30 days of receiving the purchaser’s payment, regardless of residency. [Source: mca.legmt.gov — § 15-18-221(2)–(3)]
  • Filing venue: county treasurer of the county where the property lies (the treasurer distributes automatically to the titleholder of record under § 15-18-221(3); no adversarial claim petition is specified in the section).
  • Claim deadline: the current § 15-18-221 imposes no claimant deadline — the treasurer must pay the titleholder within 30 days of receiving payment. If the titleholder cannot be paid, surplus held by a county treasurer is presumed abandoned and becomes unclaimed property after 5 years under MCA § 70-9-803. [Source: mca.legmt.gov — § 15-18-221, § 70-9-803]
  • Escheat: via the Uniform Unclaimed Property Act — unclaimed treasurer-held surplus is reported/delivered to the Department of Revenue (administrator) and is reclaimable by the owner indefinitely under Title 70, Ch. 9, Part 8. [Source: mca.legmt.gov — § 70-9-803; revenue.mt.gov unclaimed-property]
  • Documentation required: proof of identity / titleholder status to the treasurer; for unclaimed-property reclamation, a claim through the DOR portal. [Detail of treasurer-level documentation flagged in needs_verification.]
  • Third-party recovery (governs whether a surplus-recovery agent may operate):
    • fee_cap_pct: null — Montana sets no fixed percentage cap; instead an “unconscionable” fee in a locate/recovery agreement is unenforceable, and the owner or the administrator may sue to reduce it (MCA § 70-9-825).
    • licensing_required: no specific surplus-recovery license is identified; Montana regulates the agreement, not a finder license (flagged for verification of any private-investigator/finder registration).
    • assignment_of_claim_allowed: the § 15-18-221 surplus runs to the “titleholder of record”; assignment of an unclaimed-property claim is governed by § 70-9-825’s agreement rules.
    • cooling_off_period: a locate/recovery agreement is void and unenforceable if entered into during the period from when the property is presumed abandoned until 24 months after it is delivered to the administrator (MCA § 70-9-825).
    • contract_disclosure_rules: after that window, the agreement is enforceable only if it is in writing, signed by the apparent owner, clearly states the nature of the property and services, and states the value of the property before and after the fee is deducted (MCA § 70-9-825).
    • prohibited_practices: unconscionable compensation (reducible/voidable); agreements within the statutory void window; non-conforming (unsigned / non-disclosing) agreements. [Source: mca.legmt.gov — § 70-9-825]
    • citation: MCA § 70-9-825 (Agreement to locate property), § 70-9-803.
  • Notice to former owner required? Yes — pre-deed § 15-18-212 certified-mail notice; and the § 15-18-221 surplus is paid to the titleholder by the treasurer. [Source: mca.legmt.gov — § 15-18-212, § 15-18-221]

4. Mortgage Foreclosure

  • Process: both. Most residential loans use a trust indenture (deed of trust) on ≤40 acres foreclosed non-judicially by trustee’s sale under the Small Tract Financing Act (MCA § 71-1-304 et seq.). Traditional mortgages and larger tracts are foreclosed judicially (Title 71, Ch. 1, Part 2).
  • Timeline (non-judicial / STFA):
    • Notice of sale: recorded and mailed by certified mail at least 120 days before the trustee’s sale (MCA § 71-1-315);
    • Posting: on the property at least 20 days before the sale;
    • Publication: once each week for 3 successive weeks, last publication ≥20 days before the sale (MCA § 71-1-315);
    • Sale: public auction to the highest bidder by the trustee. [Source: mca.legmt.gov — § 71-1-315]
  • Reinstatement right: Yes — the grantor may cure by paying the entire amount then due (plus costs, trustee/attorney fees) at any time before the trustee’s sale, which reinstates the obligation (MCA § 71-1-312). [Source: mca.legmt.gov — § 71-1-312]
  • Redemption after sale:
    • STFA trustee’s sale: none (no statutory post-sale redemption; § 71-1-318 quid-pro-quo). [Source: nolo.com summary citing § 71-1-318; flagged for direct statute pull]
    • Judicial foreclosure / execution sale: 1 year post-sale redemption (MCA § 25-13-802). [Source: corroborated by nolo.com; statute pull flagged]
  • Deficiency judgment:
    • STFA trustee’s sale: prohibited — “no other or further action … or judgment … for any deficiency” (MCA § 71-1-317). [Source: mca.legmt.gov — § 71-1-317]
    • Judicial foreclosure of an owner-occupied single-family residence: also barred — First State Bank of Forsyth v. Chunkapura (1987) held the STFA’s no-deficiency quid pro quo applies even when the lender elects judicial foreclosure of such a residence. [Source: justia.com / quimbee — 226 Mont. 54, 734 P.2d 1203]
  • Surplus distribution (foreclosure): proceeds pay the foreclosing debt, then junior lienors by priority, then the grantor/mortgagor (general rule). [Exact STFA surplus-distribution section flagged for verification.]
  • Sale officer: trustee (STFA non-judicial); sheriff (judicial / execution sale).

5. Sale Procedure Playbooks

Treasurer / tax-lien & tax-deed procedure → see treasurer-sale

  1. Taxes go delinquent; treasurer attaches the tax lien by the first working day in August and prepares a tax lien certificate filed with the clerk & recorder (MCA § 15-17-125).
  2. The county is the possessor of the lien (MCA § 15-17-125, § 15-17-214).
  3. An investor purchases an assignment (MCA § 15-17-323): gives certified-mail pre-purchase notice to the assessed owner (≥2 weeks before, not before Aug. 15, not >60 days before), then pays delinquent taxes, penalties, interest, costs, and the assignment fee.
  4. Owner may redeem for 36 months (24 for certain vacant lots) from the first day of the tax lien sale (MCA § 15-18-111).
  5. As the period nears expiry, the treasurer notifies the assignee (Jan. 1–31); the assignee gives § 15-18-212 certified-mail notice to occupant and each party on a litigation guarantee (May 1–30) and publishes; assignee files proof within 30 days (MCA § 15-18-212).
  6. Residential (occupied dwelling): assignee applies for a tax deed (MCA § 15-18-219, $25 fee); treasurer holds a public auction within 60 days (MCA § 15-18-220), then distributes surplus to the titleholder (MCA § 15-18-221).
  7. Non-residential: treasurer issues the tax deed to the assignee (MCA § 15-18-211, $25 + costs).
  8. Quiet title action to clear the tax-deed title (MCA § 15-18-411 to -413).

Sheriff / judicial sale → see sheriff-sale

  1. Lender files a judicial foreclosure complaint (Title 71, Ch. 1, Part 2).
  2. Decree of foreclosure; sheriff conducts an execution sale.
  3. 1-year redemption runs post-sale (MCA § 25-13-802); deficiency barred on owner-occupied single-family residences (Chunkapura).
  • Notice requirements: tax deed — § 15-18-212 certified mail + publication (per § 7-1-2121); STFA — 120-day mailed/recorded notice + 20-day posting + 3-week publication (§ 71-1-315). [Source: mca.legmt.gov — § 15-18-212, § 71-1-315]
  • Upset bid / confirmation: no North-Carolina-style upset bid; residential tax-deed sale is a one-shot public auction (§ 15-18-220). Judicial sales are subject to court confirmation/return.
  • Payment terms: auction deposit + balance per the § 15-18-220 notice; trustee’s sale is cash to highest bidder.
  • Deed issued: tax deed (quitclaim-quality; prima facie evidence of regularity under MCA § 15-18-213); trustee’s deed (STFA); sheriff’s deed (judicial). [Source: mca.legmt.gov — § 15-18-213]

6. Due Process & Notice → see due-process-notice

  • Standard: Montana requires strict compliance with the statutory tax-deed notice procedures; the owner risks losing real property, so courts construe the statutes strictly in the owner’s favor (Moran v. Robbin; Isern v. Summerfield). This aligns with mullane-v-central-hanover (“reasonably calculated”) and the actual-notice-to-record-interests rule of mennonite-v-adams.
  • Required attempts: certified mail, return receipt requested, to the occupant and each party on the litigation guarantee, plus publication (MCA § 15-18-212); proof of notice filed within 30 days.
  • Consequence of defective notice: void — a treasurer “may not legally issue a tax deed” without statutory notice; a deed issued on defective notice/proof is void (Moran v. Robbin; Isern v. Summerfield). [Source: justia/findlaw — 261 Mont. 478; 1998 MT 45]
  • Leading cases: moran-v-robbin, isern-v-summerfield, zinvest-v-gunnersfield.

7. Title & Marketability

  • Deed warranty level: tax deed conveys no warranty; it is prima facie evidence of the regularity of all prior proceedings (MCA § 15-18-213) and conveys title subject to the § 15-18-413 defect rules. [Source: mca.legmt.gov — § 15-18-213, § 15-18-413]
  • Marketable immediately? No in practice — title is clouded until a quiet-title action is completed (MCA § 15-18-411 to -413).
  • Quiet title required? Effectively yes for marketable/insurable title and to cut off challenges; the statute supplies the procedure (MCA § 15-18-411, § 15-18-412). [Source: mca.legmt.gov — § 15-18-411]
  • SOL to challenge deed: governed by § 15-18-411/-412 procedure and general limitations; exact limitation period flagged for verification.
  • Title insurance availability: generally only after quiet title; insurers typically will not insure a raw tax-deed title. [Industry practice — flagged.]
  • Common defects: defective § 15-18-212 notice/proof; defective DOR assessment or misdirected tax bills (Zinvest v. Gunnersfield); failure to file affidavit of publication (§ 15-17-123); chain-of-title gaps.

8. Case Law (real, verified)

CaseYearTopicHolding (plain English)Source
isern-v-summerfield1998due_process, sale_procedureStrict statutory compliance is required to issue a tax deed; errors/omissions in the tax-deed process void the deed (1998 MT 45, 287 Mont. 461, 956 P.2d 28).https://caselaw.findlaw.com/court/mt-supreme-court/1087452.html
moran-v-robbin1993due_process, redemptionIf notice requirements are not met, the treasurer may not legally issue a tax deed; tax-sale proceedings must strictly comply with statute (261 Mont. 478, 863 P.2d 395).https://dojmt.gov/wp-content/uploads/1993/01/45-002.pdf
zinvest-v-gunnersfield2017sale_procedure, due_processA defective Department of Revenue tax assessment voided the tax-lien sale, so the assignee’s tax deed failed; quiet title denied (2017 MT 284, 389 Mont. 334, 405 P.3d 1270).https://www.courtlistener.com/opinion/4445486/zinvest-v-gunnersfield/
first-state-bank-of-forsyth-v-chunkapura1987mortgage_foreclosureThe Small Tract Financing Act’s no-deficiency quid pro quo applies even in judicial foreclosure of an owner-occupied single-family residence (226 Mont. 54, 734 P.2d 1203).https://www.quimbee.com/cases/first-state-bank-of-forsyth-v-chunkapura
tyler-v-hennepin-county2023surplus, due_processGovernment may not keep surplus equity beyond the tax debt; retention is an unconstitutional taking (598 U.S. 631). Montana’s § 15-18-221 residential surplus-return aligns; non-residential direct-deed track is the residual exposure.https://www.supremecourt.gov/opinions/22pdf/22-166_8n59.pdf

Note: Zinvest v. Voth, 2015 MT 65N, is a non-citable memorandum opinion (“shall not be cited and does not serve as precedent”) and is therefore excluded from the authority table; cited here only to acknowledge it exists.

9. Edge Cases (state-specific notes)

  • bankruptcy-automatic-stay — A Chapter 13 filing stays the tax-deed/auction process and can cure delinquent taxes through a plan; the § 15-18-111 period is tolled by the automatic stay (federal overlay; Montana statute is silent).
  • federal-tax-lien-redemption — The IRS holds a 120-day redemption right after a sale that discharges a federal tax lien (26 U.S.C. § 7425) — federal overlay applies in Montana.
  • heirs-property — Multiple heirs each qualify as an “owner/interested party” who may redeem under § 15-18-111; notice to all record interests is required.
  • scra-protections — Servicemembers Civil Relief Act may toll redemption / postpone sale for active-duty members (federal overlay).
  • HOA / special-assessment lots — vacant residential/commercial lots with delinquent special assessments and no structures carry the shorter 24-month redemption (MCA § 15-18-111).
  • Manufactured homes — taxed as personal or real property depending on affixation; flagged for verification of the tax-lien mechanism for unaffixed homes.
  • Foreign-entity bar — a county treasurer may not sell a § 15-18-220 residential tax-deed property to a foreign entity; the bidder must prove it is a domestic entity (MCA § 15-18-220).
  • Void vs. voidable — Montana treats deeds issued on defective statutory notice as void (not merely voidable) (Moran, Isern). See void-vs-voidable.

10. Operations

11. Meta

Legal information, not legal advice. This page summarizes Montana statutes and case law for research purposes. Statutes and local procedures change; verify against the cited primary sources and consult a licensed Montana attorney before acting. Last verified: 2026-06-01.

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