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Agricultural Covenants Exemption

The Montana Subdivision and Platting Act (MSPA) allows a division of land to be exempt from subdivision review if an agricultural covenant running with the land is placed on the divided parcel.  Section 76-3-207 (1)(c), MCA places further restrictions on the use of the agricultural covenant exemption from subdivision review:

• The purpose of the division of the land cannot be to evade subdivision review;
• The land to be divided must be outside of a platted subdivision;
• The land divided must comply with survey requirements in State law;
• The land divided must comply with applicable zoning;
• The agricultural covenant must run with the land; and
• The land must be used exclusively for agricultural purposes.

In 2009 the Montana State Legislature revised Section 76-3-207 (2)(b) by substituting “review under parts 5 and 6 of this chapter” for the previous language which states review was under “the provisions of this chapter.”    This change was significant.  Parts 5 and 6 of the MSPA are the chapters for subdivision review and approval.   After 2009 the lifting of an agricultural covenant exemption requires that the owner of the parcel submit an application for subdivision review and approval.

2019 Legislative Change

The 2019 legislature passed HB 124 which allows County Commissioners to lift the agricultural covenant without subdivision review in limited situations as set forth below.  The words “mutual consent” in Section 76-3-207 (1)(c), MCA have been struck from the statute making it clear that either subdivision review is required to lift the agricultural covenant exemption or one of the two limited situations allows the county commissioners to lift the agricultural covenant exemption:

1. The original lot lines are restored through aggregation of the covenanted tract prior to, or in conjunction with, the lifting of the agricultural covenant; or,
2. The proposed lifting of the covenant is for a government or public entity seeking to use the tract for ”public purposes”. Each county will need to define what “public purposes” means in its subdivision evasion review criteria authorized by 76-3-504(1)(p).

The legislative changes for B., lifting of an agricultural covenant exemption for “public purposes”, must follow the below process:

1. The County Commission shall determine the qualifications and public purposes of the government or public entity, by:
2. holding a public hearing,
3. considering the information and evidence provided at the public hearing,
4. issuing written findings of fact based on the information and evidence within 15 working days, and,
5. either approving or denying the removal of the agricultural covenant.
6. An Agricultural Covenant Exemption Revocation Agreement lifting the agricultural covenant shall be recorded with the Clerk and Recorder.

iii.  The revocation of an Agricultural Covenant Exemption does not affect sanitary restrictions imposed under Title 76, Chapter 4, MCA.

Action Needed

Each county must revise its subdivision evasion review criteria for agricultural covenant exemptions.  A template has been drafted and can be downloaded by clicking the link below.