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HB 520

Revise laws to clarify that local prohibitions on conveying family transfer parcels do not apply to conveyances involving lenders

2025 Regular Session Introduced by Larry Brewster

Montana law clarified to exempt lender-involved property transfers from local family parcel division restrictions, protecting lending rights while limiting local land-use control.

Chapter Number Assigned
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Bill Summary · HB 520

Legislative bill overview

HB 520 clarifies Montana law to ensure that local governments cannot prohibit property transfers when lenders are involved in "family transfer parcels." The bill specifies that restrictions local jurisdictions impose on dividing family-owned land do not apply to conveyances (transfers) where a lender has an interest in the property, such as when land serves as collateral for a loan.

Why is this important

This addresses a practical conflict between local land-use regulations and property rights in lending situations. Without this clarification, families or landowners could face barriers to securing loans against their property if local rules restrict how family parcels can be transferred, potentially limiting access to agricultural credit or refinancing options that are critical in rural Montana economies.

Potential points of contention

  • Property rights vs. local control: The bill constrains local governments' ability to enforce growth management or land-preservation policies they've adopted, raising questions about municipal authority over development within their jurisdictions
  • Lender leverage: Critics may worry the provision could be exploited to circumvent local subdivision restrictions by using temporary lender interests as workarounds
  • Unintended consequences: The carve-out may create loopholes for developers or investors who structure deals to involve lenders specifically to bypass local land-use protections

Compiled from official sources — confirm details with the bill’s official record.

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