Montana bill would lower unanimous HOA ownership threshold to 75%

Representative Greg Oblander introduced House Bill 362, proposing to change the Unit Ownership Act so that amendments to the percentage of undivided interest in common elements would require a 75% approval rather than the current 100% unanimity.

The measure is aimed at condominium-style homeowners associations (HOAs) governed by the Unit Ownership Act. Oblander told the committee the bill is “intended to be not retroactive” and is meant to give future associations more workable rules for amending ownership percentages.

Supporters who testified said unanimous consent is impractical and can allow a small minority to block changes that the majority wants. Brad Griffin, testifying as a private citizen from The Woodlands development near Billings, described a recent vote in his HOA in which “the amendment passed with 36 out of 40 homeowners or 90%,” but the association’s governing document required unanimous approval. “The only reason given as to why they voted no was because we can,” Griffin said, arguing the bill would make it feasible to correct inequities in how shared costs are apportioned.

Other proponents included licensed property manager Brandy Grosskopf, who said her company manages more than 60 HOAs and called unanimous thresholds “almost impossible” to meet, and Kurt Wheeler, who said repeated holdouts discourage residents from serving on boards.

Opponents raised constitutional and contract concerns, saying the measure would allow a majority to change property interests without minority consent. Steve Rafado, identifying himself as a retired attorney and member of the unit ownership committee that examined the issue, said the current 100% requirement “has been in the unit ownership act for 60 years, and it reflects a fundamental principle of constitutional law that a person's property cannot be taken or diluted without the person's consent.” He urged that any change either be expressly prospective or explicitly preserve existing contracts.

Zachary Oakland, appearing online and identifying himself as a director of a real estate development company and a Woodlands resident, made a similar point: “When you buy a property into an HOA, you receive title to two things, your private unit and the percentage of the association you own with others. When you change that percentage of common elements, you're altering how much they own and the respective financial obligations.” He warned that lowering the voting threshold without safeguards could “destroy individual ownership” by subjecting ownership percentages to majority votes.

Bill Gowen, representing the Montana Land Title Association, urged clarity on drafting details, including word choice changes (for example, replacing shall with must) and reminded the committee that not all HOAs are governed by the Unit Ownership Act.

Committee staff member Jamieson (Legislative Services) explained that many of the bill’s wording changes are technical updates to align older statute language with current drafting conventions; he told the committee the changes are housekeeping in part and that the bill-drafting manual guides use of terms such as “must” rather than “shall.”

Representative Oblander closed by reiterating the sponsor’s intent that the bill not change existing contracts retroactively, saying the bill is “intended to be not retroactive” and that it is designed to make future amendment votes more achievable for associations.

No committee vote on HB 362 was recorded in the transcript; the item was presented and heard with proponents and opponents, and the sponsor closed the hearing.

Votes at a glance (from this meeting): None for HB 362; hearing only.