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#STOPSB300: Reasons Why SB 300 is Bad for Homeowners

  • SB 300 is Unconstitutional:  It violates the Montana Constitution Section 31:  No ex post facto law nor any law impairing the obligation of contracts, making any irrevocable grant of special privileges, franchise, or immunities, shall be passed by the legislature. The Montana Supreme Court in numerous rulings has declared that HOA and condominium covenants are a contract between the association and the owners.
  • The proponents of SB 300 are in Litigation with their HOA:  SB 300 was drafted by a family who were the exception to all the homeowners in the subdivision they bought a house in Red Lodge to use as a VRBO. Their association all (except this family) voted in favor of an amendment to clarify the covenants on the property, resulting in a complete ban on short term rentals.   The attorney for the family, Stephanie Baucus, drafted the bill language and has been leading the efforts for its passage.  This court should determine the outcome of the case, not the legislature.
  • Increased Expenses on Homeowners:  It will be difficult and costly to track homeowners' individual set of rules based on their homes purchase date. This cost will be borne by all the homeowners in the community.  Further, the unconstitutional nature of SB300 will cause legal challenges by associations.  Legal fees will be borne by the homeowners.
  • Decrease in Property Values: Homes in community associations are generally valued at least 5-6% more than other homes and 90% of people surveyed say their association's rules protect and enhance property values (62% or have a neutral effect (28%); only 4% say the rules harm property values. *
  • Healthy and Safety Concerns: Communities would not be able to enforce maintenance to ensure community health and safety issues like sprinkler system, dryer vent maintenance. Communities would not be able to enforce rules related to maintenance of community lighting, occupancy limits,  installation of wind turbines and towers (of any size and installed by anyone without concern of safety).
  • Vacation Rentals: Communities would not be allowed to have a community conversation about how to handle vacation rentals in their communities to ensure the preservation of community character and protection of property values.
  • Access to Mortgage Lending may be Negatively Impacted:  If communities have more than 50% of the homes owned by investors, Fannie Mae and Freddie Mac will not underwrite loans in those communities according to their federal guidelines.  If a community association chooses to adopt a related to the investor/owner ration, it will be unenforceable to some of the owners.
  • SB 300 is Patchwork Legislation: The problem with attempting to alter property rights in a hurried and piecemeal fashion is that no thought is given to all the ramifications of the legislation or to the effect on other areas of the law.