Opinion ID: 886702
Heading Depth: 1
Heading Rank: 4

Heading: Whether Appellants are tenants in common with the members of Pine Crest Homeowners Association in the ownership of Tract 3.

Text: ¶ 13 Appellants claim that under the common law rule barring unincorporated associations from owning real property, Pine Crest Homeowners Association, as an unincorporated association, could not have owned Tract 3 when it was deeded to the Association in 1988. Because the Association cannot own land, Appellants contend, the ownership defaulted to the members of the Association. Since Yellowstone (a legally recognized corporation), Edwards, and Cressman all own land that would have made them members in 1988, the Appellants reason that they are now among the owners of Tract 3. ¶ 14 Respondents counter with two arguments. First, they claim that the Appellants have no standing as they did not actually own the land in 1988. Yellowstone was not formed until 1990, Edwards did not obtain his property until 1991, and Cressman not until some time later. Second, Respondents argue that the common law rule barring unincorporated associations from owning property should not apply here. ¶ 15 The District Court agreed with the second contention and held that the Association can own property. It distinguished our decision in Winchell v. Dep't of State Lands (1993), 262 Mont. 328, 865 P.2d 249, and recognized that many states have moved away from the common law rule and recognized ownership rights of unincorporated associations even in the absence of a statute creating such rights. We determine that it is unnecessary for us to rule on this issue. The more fundamental question before us is whether Appellants are tenants in common with the Association's members in the ownership of Tract 3. We conclude that whether the Association or merely its members own Tract 3, the Appellants do not have any ownership interest in the property. ¶ 16 If the Association itself owns the property, then the ownership is to the exclusion of all others including the Appellants. [1] In this case, ownership would have shifted to the Association in 1988 and not to its members. Therefore, neither the Appellants, nor current members, would be tenants in common in Tract 3's ownership. Alternatively, even assuming the Association, as an unincorporated association, could not have owned Tract 3, ownership would have passed to the Association's trustees or members. Appellants, however, are not trustees or members of the Association, and therefore have no ownership interest. ¶ 17 Under common law an unincorporated association cannot own land unless a statute empowers it to do so. Krumbine v. Lebanon Tax Claim Bureau (1995), 541 Pa. 384, 663 A.2d 158, 160. Because Montana has no such statute we followed this rule in Winchell. Winchell, 262 Mont. at 335-36, 865 P.2d at 253. There, we were not directly faced with the question of who should be considered the owner in lieu of an unincorporated association, but we adopted the reasoning of a case that addressed that issue, OKC Corp. v. Allen (Tex.Civ.App.1978), 574 S.W.2d 809. In OKC the Texas Court of Civil Appeals did not recognize an unincorporated association as entitled to own land. OKC Corp., 574 S.W.2d at 812. However, the court did allow the trustees of the association to hold the property. OKC Corp., 574 S.W.2d at 812. As we recognized in Winchell, although it is often difficult to identify a legal, identifiable party ... responsible for liability when an unincorporated association purportedly owns property, the presence of identifiable trustees of the association makes for a group that can take responsibility for the duties of ownership, and that therefore possess the land in lieu of the association. See Winchell, 262 Mont. at 334-35, 865 P.2d at 253. ¶ 18 This approach to ownership comports with the rule in many other jurisdictions that do not allow unincorporated associations to own real property. See, e.g., Krumbine, 663 A.2d at 161 ([L]egal title to property vests in the trustees of an unincorporated association....); Crane v. Crane (Utah 1984), 683 P.2d 1062, 1067 ([A] conveyance to an unincorporated association made up of an ascertainable membership will be given effect as a conveyance to the members as individuals.); Trinity County v. Rourke (1969), 275 Cal.App.2d 628, 79 Cal.Rptr. 902, 904 (concluding that real property deeded to an unincorporated association vested ownership in the association's members). Generally, the association's members own the property as tenants in common. Rehder v. Rankin (Iowa 1958), 249 Iowa 1201, 91 N.W.2d 399, 403 (Although members of such an association generally have no severable or transferable interest in its assets, they are regarded as the beneficial owners in common thereof in equal shares....). This is more likely to be the case when the membership is easily ascertainable than when the members are diffuse and no standards are available to identify them. Motta v. Samuel Weiser, Inc. (1st Cir.1985), 768 F.2d 481, 486 (Without this limitation of an ascertainable membership, the public, or even the members of the association, would not have notice or be cognizant of who claimed ownership in a particular property.). ¶ 19 In this case, we have plain and easily discernable standards as to who is and is not a member of the Association. The members simply are the owners of the tracts listed on the Association's amended articles. The membership includes Respondent Burke but does not include any Appellants. Therefore, we can conclude that even if we were to determine that the members of the Association, and not the Association itself, own Tract 3 as tenants in common, Appellants are not party to that tenancy. ¶ 20 Given the reasoning in their brief, we can assume that Appellants would counter this conclusion by claiming that they now own land that would have entitled them to membership in the Association when Tract 3 was deeded in 1988. However, such a proposition does not comport with the nature of member ownership in an unincorporated Association. As quoted above in the Rehder case, when members own an association's property in lieu of the association, the members of such an association generally have no severable or transferable interest in its assets but are regarded as the beneficial owners in common. 249 Iowa 1201, 91 N.W.2d at 403. Members only own the property as members. When they lose that membership, whether by their own actions or by the actions of other members, they lose their ownership interest. As stated our sister court in Wyoming: In the absence of provisions in the constitution or by-laws giving members an individual interest in the assets of a voluntary association, members who withdraw thereby lose their rights to association property, title to which stays in the members remaining in the association, and the rule applies whether membership is terminated by the member's own act or omission or by the act of the society. This rule applies even where a number of members secede in a body.... DeBruyn v. Golden Age Club of Cheyenne (Wyo.1965), 399 P.2d 390, 392-93 (quoting 7 C.J.S. Associations § 27b); accord Raulston v. Everett (Tex.Civ.App.1978), 561 S.W.2d 635, 638 (also citing C.J.S.); Liggett v. Koivunen (Minn.1948), 227 Minn. 114, 34 N.W.2d 345, 350 (also citing C.J.S.). ¶ 21 Neither the 1997 nor 1988 version of the Association's articles gave members an individual interest in Association property. Therefore, when the articles were amended Appellants ceased to be members of the Association and to have any ownership interest in Tract 3. Furthermore, Appellants try to have it both ways in arguing that ownership of Tract 3 passed to the Association's members in 1988. As we stated earlier, Appellants were not even members in 1988. How could an ownership interest in Tract 3 pass to them when they later became members, but then not divest when they ceased to be members? Appellants' argument on the ownership of Tract 3 fails.