What Falcon Ridge Teaches Montana Homeowners About What Developers Know
A Montana Supreme Court decision on developer disclosure, defective soils, and the power of a class If you own a home in a subdivision, condominium, or townhome community governed by a homeowners' association (HOA) or condominium owners' association (COA), a recent Montana Supreme Court decision out of Billings is worth understanding. It speaks directly to a question many owners never think to ask until problems appear: what did the developer know before selling, and were they required to tell you? The Case: Cook v. Buscher In Cook v. Buscher Construction & Development, Inc., 551 P.3d 811 (Mont. 2024), the Montana Supreme Court considered claims arising from the Falcon Ridge subdivision in the Billings Rimrocks. According to the record, the developer possessed geotechnical reports identifying serious soil problems before a single lot was sold. Those reports warned that the soils were hydro-collapsible — prone to collapsing when saturated with water, causing foundations to shift and crack, sometimes years after a home is completed. Rather than disclose that information to buyers, the developer retained a different engineering firm to approve less expensive shallow foundations. The subdivision's recorded covenants (CC&Rs) then required homeowners to landscape and irrigate their lawns — introducing water into the very ground the developer already knew was unstable. The Court affirmed that the affected homeowners could pursue their claims together as a class. The developer's alleged failure to disclose created a common injury linking every property owner in the subdivision, and that shared harm was enough to allow the owners to proceed collectively rather than fighting the same battle one lawsuit at a time. Why This Matters Beyond One Subdivision Falcon Ridge was a traditional subdivision, but the same dynamic plays out routinely in condominium and townhome developments — often with even more at stake, because owners share walls, roofs, and structural systems. Developers typically control the HOA or COA board until enough units sell and governance transfers to the homeowners. During that window, the developer makes the key decisions: how the property is constructed, how association reserves are funded and managed, and what information is passed along to unit owners. By the time homeowners take over the board, problems may already be surfacing — water intrusion through the building envelope, foundations that were never designed for the site conditions, drainage that fails, and reserve accounts far too thin to cover the true cost of repairs. The Legal Question — and the Obligation In these cases, the issue is rarely just what went wrong. It is what the developer knew before its customers bought, and whether the law required them to say so. In Montana, that duty of disclosure exists. When developers fail to meet it, homeowners and associations have real legal options — and, as Cook confirms, the ability in the right circumstances to pursue those options together. Don't Wait to Have the Conversation Construction defect claims are governed by statutes of limitations and repose that run in the background — whether or not anyone is actively investigating the problem. If you serve on an HOA or COA board confronting construction issues, or you are a homeowner who has noticed problems that weren't apparent at purchase, the time to explore your options is sooner rather than later. Our firm represents homeowners and associations in construction defect litigation throughout Montana. If you think you may be facing a situation like this, reach out — we would be glad to talk it through with you.
Related attorney: Jean Meyer
A Montana Supreme Court decision on developer disclosure, defective soils, and the power of a class
If you own a home in a subdivision, condominium, or townhome community governed by a homeowners' association (HOA) or condominium owners' association (COA), a recent Montana Supreme Court decision out of Billings is worth understanding. It speaks directly to a question many owners never think to ask until problems appear: what did the developer know before selling, and were they required to tell you?
The Case: Cook v. Buscher
In Cook v. Buscher Construction & Development, Inc., 551 P.3d 811 (Mont. 2024), the Montana Supreme Court considered claims arising from the Falcon Ridge subdivision in the Billings Rimrocks. According to the record, the developer possessed geotechnical reports identifying serious soil problems before a single lot was sold. Those reports warned that the soils were hydro-collapsible — prone to collapsing when saturated with water, causing foundations to shift and crack, sometimes years after a home is completed.
Rather than disclose that information to buyers, the developer retained a different engineering firm to approve less expensive shallow foundations. The subdivision's recorded covenants (CC&Rs) then required homeowners to landscape and irrigate their lawns — introducing water into the very ground the developer already knew was unstable.
The Court affirmed that the affected homeowners could pursue their claims together as a class. The developer's alleged failure to disclose created a common injury linking every property owner in the subdivision, and that shared harm was enough to allow the owners to proceed collectively rather than fighting the same battle one lawsuit at a time.
Why This Matters Beyond One Subdivision
Falcon Ridge was a traditional subdivision, but the same dynamic plays out routinely in condominium and townhome developments — often with even more at stake, because owners share walls, roofs, and structural systems.
Developers typically control the HOA or COA board until enough units sell and governance transfers to the homeowners. During that window, the developer makes the key decisions: how the property is constructed, how association reserves are funded and managed, and what information is passed along to unit owners. By the time homeowners take over the board, problems may already be surfacing — water intrusion through the building envelope, foundations that were never designed for the site conditions, drainage that fails, and reserve accounts far too thin to cover the true cost of repairs.
The Legal Question — and the Obligation
In these cases, the issue is rarely just what went wrong. It is what the developer knew before its customers bought, and whether the law required them to say so. In Montana, that duty of disclosure exists. When developers fail to meet it, homeowners and associations have real legal options — and, as Cook confirms, the ability in the right circumstances to pursue those options together.
Don't Wait to Have the Conversation
Construction defect claims are governed by statutes of limitations and repose that run in the background — whether or not anyone is actively investigating the problem. If you serve on an HOA or COA board confronting construction issues, or you are a homeowner who has noticed problems that weren't apparent at purchase, the time to explore your options is sooner rather than later.
Our firm represents homeowners and associations in construction defect litigation throughout Montana. If you think you may be facing a situation like this, reach out — we would be glad to talk it through with you.