Holding a Montana Tax Lien Assignment: Later Taxes, Payouts, Resale and the May Notice

Montana has no tax lien auction. No later than the first working day in August, the county treasurer attaches a lien to each delinquent parcel whose owner was sent the required notice of pending attachment, and the county holds it. An investor takes it by assignment: send the person the property was assessed to a notice of pending assignment by certified mail, give the treasurer proof of the mailing, then pay the county the delinquent taxes, penalties, interest and costs (Mont. Code Ann. 15-17-125 and 15-17-323). Our guide to how Montana tax sales work covers getting an assignment, including how counties allocate parcels when several investors want the same one.

This note is about the years after that: what you hold, which later payments you can make, how a redemption pays you, how to sell the position, and the one notice that cancels it if you miss it.

What you hold

The treasurer issues an assignment certificate in the form 15-17-323(2) sets out. It assigns “all rights, title, and interest of the county” acquired through the tax lien, so the holder can “proceed to obtain a tax deed to the property or receive payment in case of redemption as provided by law.” A copy is mailed to the person the taxes were assessed to, at the address of record, with a notice that they can contact the treasurer about lien assignments, property tax liens and property tax assistance programs.

Two practical points follow from the statute. The address on the certificate is where the treasurer sends both your redemption payout and, in the final year, a reminder of your notice duty (15-18-114(2)(b) and 15-18-212(3)(a)). So give an address that will still reach you in three years. The statute does not say the certificate is reissued when a lien is resold, so a later buyer should confirm with the treasurer which address the county will use. And if the certificate is lost or destroyed, the treasurer issues a duplicate on adequate proof and a signed affidavit from the assignee (15-17-323(4)).

Paying the later years’ taxes

If the owner leaves a later year unpaid as well, you can pay it yourself. Under 15-18-112(1)(a), once a lien is assigned, the assignee may pay the subsequent taxes on the property, once they are delinquent and still unpaid by the owner, on or after June 1 and before July 31. If the property qualifies for the 15-6-305 property tax assistance program, the window opens only after the 20-day grace period in 15-16-102(4)(b), and it still closes before July 31 (15-18-112(1)(b)).

If the lien is redeemed, you get those payments back. Under 15-18-112(2), whoever redeems pays the lien plus the subsequent taxes, with interest and penalty at the delinquent-tax rate in 15-16-102.

How a redemption pays you

The right to redeem belongs to the owner and the other parties 15-18-111 lists, not to you. Under 15-18-111, the owner, the holder of an unrecorded or improperly recorded interest, the occupant or any interested party may redeem by the first working day in August, three years after the lien attached. A subdivided residential or commercial lot with delinquent special improvement district or rural special improvement district assessments and no habitable dwelling or commercial structure has two years instead. The Montana redemption period page lays out both tracks.

When an assigned lien is redeemed, 15-18-114(2)(a) has the treasurer pay the assignee listed on the assignment certificate and in the treasurer’s records:

The treasurer must send that within 30 days of redemption, to the address on the assignment certificate. If the payment comes back unopened, the treasurer publishes a notice, holds the money for one year from the publication date, and if you have not claimed it by then you give up the claim and the money goes to the county general fund (15-18-114(2)(b) and (3)). Money remaining after the assignee is paid goes to the taxing funds the taxes were originally meant for (15-18-114(1) and (2)(a)).

Selling the position

You do not have to wait out the redemption period. Under 15-17-323(3), an assignee can reassign the lien “for any consideration whatsoever.” The transfer is binding only once a statement is filed with the county treasurer, who files a copy with the clerk and recorder. The statement must give:

  1. the name and address of the new assignee;
  2. the name and address of the original assignee, and of each previous assignee;
  3. a description of the property matching the tax lien certificate or assignment certificate;
  4. the signatures of the party assigning and of the new assignee; and
  5. the date it was signed.

A buyer of an existing assignment should check that this chain of statements is on file before paying, because an unfiled transfer is not binding.

The May notice that can cancel the lien

The deadline that does the most damage is the notice before the deed. In the year the redemption period expires:

  1. Between January 1 and January 31, the treasurer notifies the assignee of the obligation to give notice, by certified mail, return receipt requested, to the address on the assignment certificate (15-18-212(3)(a)).
  2. Between May 1 and May 30, for property other than the owner-occupied property covered by 15-18-219, the assignee must notify the parties that a tax deed will be issued unless the lien is redeemed before the redemption period expires (15-18-212(1)(b)). The notice uses the form in 15-18-215 and goes by certified mail, return receipt requested, to the current occupant, if any, and to each party other than a utility listed on a litigation guarantee. That guarantee must be approved by the insurance commissioner, issued by a licensed title insurance producer, ordered by the assignee, and list the parties of record who have or may claim an interest, the people who would otherwise have to be named in a quiet title action (15-18-212(4)). The notice must also be published twice, at least 6 days apart, within the same May 1 to May 30 window (15-18-212(5); 7-1-2121(7)).
  3. Within 30 days of mailing or publishing, the assignee files proof of notice with the county clerk and recorder (15-18-212(7)).

If the assignee fails to give that notice, shown by the missing proof of notice, the treasurer must cancel the property tax lien evidenced by the tax lien certificate and the assignment certificate (15-18-212(3)(b)). Budget for the litigation guarantee as a cost of holding the lien to term.

Taking the deed

If nobody redeems in time, 15-18-211 has the treasurer grant the assignee a tax deed. The fee is $25 plus the county’s actual costs of giving or assisting with the notice, including reasonable costs of searching county records for the people entitled to notice.

One class of property takes a different road, and on it the assignee may never get the deed. Where the parcel has a dwelling currently occupied by the legal titleholder of record, and the land is classified residential (15-6-134), agricultural (15-6-133(1)(a) and (1)©) or forest (15-6-143), the assignee files an application for a tax deed under 15-18-219 instead. For agricultural and forest land the same track also covers other property of the same class on the same tax bill. Between May 1 and May 30 of the year the redemption period expires, the assignee gives its own notice that a tax deed will be auctioned (15-18-219(4)), and missing it cancels the lien just as on the ordinary track (15-18-219(6)(b)). After the redemption period expires, the assignee files the application and pays a $25 fee, the amount to redeem any other tax liens, any delinquent taxes, penalties and interest, and the current taxes (15-18-219(1)(a) and (2)). The property then goes to a public auction run by the treasurer under 15-18-220. The opening bid includes half the most recent assessed value of the land and dwelling, or half the value set by an independent appraisal. If no one bids, or the assignee wins and does not pay in full within 24 hours (weekends and legal holidays excluded), the treasurer cancels the assignment (15-18-220(2) and (3)). Our page on how to buy a Montana tax lien and the Montana tax sales hub cover that track and each county’s treasurer.

This note summarizes the Montana Code Annotated as published by the Montana Legislature. It is general information for investors, not legal advice. Check the current statute and your county treasurer’s procedures before you act.

Sources

Published by Tax Sale Atlas, a state-by-state reference to tax lien and tax deed sales.

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