76-4-1113. Required provisions for protection of purchasers and lessees. It is unlawful for the owner or subdivider to offer to sell or lease or to sell or lease lots or parcels within a subdivision to persons residing out of the state of Montana unless one of the following conditions is complied with:
     (1) All sums paid or advanced by purchasers shall be impounded in an escrow or other depository acceptable to the board until:
     (a) (i) the title or other interest contracted for, whether it be title of record, equitable, or other interest, is delivered to such purchaser or lessee; and
     (ii) a proper release is obtained from any such blanket encumbrance; or
     (b) either the owner, subdivider, purchaser, or lessee defaults in his undertaking, in which event the money shall be paid to the party who is not in default and is entitled thereto.
     (2) The title to the subdivision is to be held in trust under an agreement of trust acceptable to the board until a proper release from such blanket encumbrance is obtained and title or other interest contracted for is delivered to such purchaser or lessee.
     (3) A bond in the amount of $2,500 to the state of Montana is furnished to the board for the benefit and protection of purchasers or lessees of such lots or parcels, in such amount and subject to the terms as may be approved by the board, which shall provide for the return of moneys paid or advanced by any purchaser or lessee for or on account of purchase or lease of any such lot or parcel if the interest contracted for is not delivered or a proper release from such blanket encumbrance is not obtained. However, if the purchaser or lessee, by reason of default, is not entitled to the return of the money or any portion thereof, then the bond shall be exonerated to the extent of the amount of the money to which such purchaser or lessee is not entitled.

     History: En. Sec. 10, Ch. 191, L. 1963; amd. Sec. 328, Ch. 350, L. 1974; R.C.M. 1947, 67-2110.