Kentucky

General Procedures and Information

Method of Issuing Title Insurance

Attorney agents issue title insurance and related forms.

Foreclosures

Foreclosures are judicial in Kentucky.

For specific questions, contact Kentucky underwriting personnel.

References:

Related Bulletins: None.

Corporate Directory: Kentucky Contacts.

Redemption Rights

A debtor whose foreclosed property bring less than two-third of its value at a judicial sale has a right of redemption for 1 year from the date of the sale. The debtor may redeem the property for the sale price plus 10% interest. The purchaser at the sale is entitled to a deed and possession at the time of sale. The deed recites the right of redemption. KRS 426.530

Survey Standards

Stewart Title Guaranty Company does not require a survey for deletion of the survey exception in loan policies on 1-4 residential properties and commercial properties with liabilities of $10 million or less. Residential properties are defined as subdivision lots or acreage tracts of twenty-five acres or less.

References
Related Bulletins:

MU000028   Survey Requirements - Loan Policies

MU000038   This Bulletin has been replaced by MU2007002.

Document and Form Information

Acknowledgments

The standard forms of acknowledgment are:

  • ·KY Acknowledgment-Individual 1
  • ·KY Acknowledgment-Corporation 1
  • ·KY Acknowledgment-Attorney in Fact 1

Conveyances

The customary form of conveyance is KY Deed-Warranty 1.

Other common forms of conveyance are:

  • KY Deed-Warranty (Joint Tenants With Rights of Survivorship) 1
  • KY Deed-Warranty (Attorney in Fact) 1
  • KY Deed-Quitclaim 1

Witnesses are not required on conveyances executed in Kentucky.

A conveyance executed and acknowledged in accordance with the laws of another state will be accepted for recordation in Kentucky.

Releases/Satisfactions

The standard release or satisfaction form is KY Deed of Release 1.

References

Security Instruments

The mortgage is the customary security instrument used in Kentucky.

Witnesses are not required for mortgages executed in Kentucky.

A mortgage executed and acknowledged in accordance with the laws of another state will be accepted for recordation in Kentucky.

Title Insurance Form Regulations

Title insurance policies and endorsements must be filed with the Insurance Department in Kentucky. However, there is a provision in the statute that allow for forms of unique character. Stewart Title Guaranty Company has filed the standard ALTA policy and endorsement forms for use in Kentucky.

References:

Forms List: Kentucky Forms.

Fees, Rates and Taxes

Deed Transfer Taxes and Documentary Stamps

The deed transfer tax in Kentucky is $0.50 per $500.00 or fraction thereof of consideration.

The deed transfer tax is usually negotiated between the seller and purchaser in Kentucky.

References:

Related Bulletins: None.

Mortgage Transfer Taxes

Kentucky has no mortgage tax.

Real Estate Taxes

Real estate/ad valorem tax payment dates vary throughout Kentucky.
For specific questions, contact Kentucky underwriting personnel.

Recording Fees

Recording fees in Kentucky are $12.00 for the first three pages and $2.00 for each additional page.

Search and Examination Fees

The purchaser usually pays the search and examination fee in Kentucky.

Title Insurance Rates

Title insurance rates must be filed with the Commissioner of Insurance in Kentucky.

For specific questions, contact Kentucky underwriting personnel.

References:

Corporate Directory: Kentucky Contacts.

Spousal Rights

Spousal Rights

Dower and curtesy still exist in Kentucky. KRS Chapter 392 However, by statute, the rights of husband and wife are the same. KRS 392.010 The surviving spouse is entitle to an "estate in fee" in the "surplus" real estate owned by the deceased souse at the time of that spouse's death and is entitled to a life estate in one-third of the real estate of the deceased spouse which the deceased owned at some point during coverture, but not at the time of death. KRS 392.020 The word "surplus" has been interpreted to mean that the survivor's dower claim is not superior to creditor's claims. Mattingly v. Gentry, 419 S.W.2d 745 (KY 1967)

There is not statutory requirement to list the marital status of the grantor or grantees in a deed, though it is the customary practice in Kentucky. However, in order for dower and curtesy rights to be released, both spouses must join in the deed or those rights must be released by a separate written document supported by consideration. Faulkner v. Terrell, 287 S.W.2d 409 (KY 1956)

Kentucky is not a community property state. It is a "marital property" state. Marital property means all property acquired by either spouse after marriage. Any individually owned property brought into the marriage remains separate and is assigned to the individual spouse in the event of dissolution of the marriage. KRS 403.190(1) Property acquired during the marriage by gift, bequest, devise, or descent; by exchange for separate property; after a legal separation; excluded by agreement of the spouses; or the increase in value of separate property not related to the efforts of the parties is exempted from "marital property". KRS 403.190(2) It is the customary practice is to include both spouses in all deeds.

Kentucky does have homestead laws. A surviving spouse retains a $5,000 exemption in real property from sale under execution, attachment, or judgment regarding an inter vivos residence of the deceased. The exemption creates a life estate only. KRS 427.060 The exemption does not apply to debts or liabilities that preceded the acquisition of the homestead. Both spouses must join in any mortgage, release, or waiver of the exemption, which must be recorded as any other interest in real property. KRS 427.100

Statutes Of Limitation

Statutes Of Limitation

Advalorem taxes have a limitation period of 10 years from the date of the delinquency. KRS 134.420(1). No action to enforce such a lien may be brought until one year after the issuance of a "certificate of delinquency." KRS 134.470. The statute of limitations is suspended during that one year period and is effective for ten years thereafter. Id. A "certificate of delinquency" arises upon sale of the tax claim by the sheriff. KRS 134.450. The latest date for the sale is April 30 of the year following the year for which the taxes were assessed. KRS 134.430(4). This effectively makes the period for which such liens encumber the property 11.5 years. For example, a lien that relates to taxes assessed for the year 1988 would remain effective until approximately July 1999, taking into account potential delays in the process.

In regard to any taxes other than administered by state Revenue Cabinet (e.g. income and excise taxes), a lien in favor of the state arises at the time of the assessment of these taxes. KRS 134.420(3) The lien remains effective for a period of 10 years from the date the notice of the tax lien was filed. KRS 134.420(3). The tax liens do not have priority until recorded, but once filed do have priority over a recorded mortgage. Midland-Guardian Co. v. McElroy, 563 S.W.2d 752 (Ky. Ct. App. 1978)

The Kentucky inheritance tax lien is created by KRS 140.190(3). Any action to collect the taxes is limited to 10 years from the accrual of the claim. KRS 140.160(3). Effective June 5, 1998, however, the Kentucky Revenue Cabinet issued a "blanket lien release (consent) on all property owned by any decedent. June 5, 1998 Revenue Cabinet Memorandum. This "blanket release" applies to all types of real property and all classes of beneficiaries.

Municipal Improvement liens become a lien on the real property against which an assessment is made. KRS 107.160 The period for bringing action to enforce such a lien is 15 years. KRS 413.090(2)

Actions to enforce other tax liens are limited to 5 years. KRS 413.120(2) This statute applies to tax liens created by statute but for which no other statute of limitation is set out.

An action to enforce a judgment, including action to execute on a lien, is limited to 15 years. KRS 413.090(1) In order for the lien to be effective, it must be recorded and notice given to the judgment debtor at the last known address. The notice must include reference to the homestead exemption KRS 426.720

Real Estate Practices

Attorney Involvement

Please describe any requirements under applicable state law for attorney, abstractor or other special professional involvement, for example, in the search, examination, opinion of title, signing, closing, disbursement, recording, preparation of documents, and/or policy-issuance.

Laypersons may conduct real estate closings, but may not answer legal questions that arise at the closing, or offer any legal advice to the parties. However, preparation of deeds and mortgages constitutes the practice of law and must be prepared by an attorney. Countrywide Home Loans, Inc .v. Kentucky Bar Association; 113 S.W.3d 105 (Ky 2003).

Cancellation/Commitment Fee

Does your state permit or require a cancellation fee or commitment fee upon cancellation?

Cancellation fee is permitted, but not required, and should be negotiated up front.

Certificate of Release (of Mortgage)

If anyone other than the lender (such as a title agent, settlement agent, underwriter or attorney) has the authority to release the security instrument, please describe.

No one other than the lender is authorized by statute or otherwise to release a mortgage.

Deeds

Please describe the kinds of deeds that are customary for commercial and residential transactions. Please describe the kinds of deeds that are generally not insurable.

General warranty deeds are customary. In some instances, a special warranty deed may be insured. Quit-claim deeds may or may not be insurable, depending on the situation, and an underwriter should be contacted.

Joinder of Spouses

If a non-title holding spouse is required to join in the execution of a deed or a security instrument, please describe. Any analogous rights, such as those in a civil union or equivalent, should also be addressed.

Kentucky recognizes the dower/curtesy interest of non-titled spouses, and therefore, a non-titled spouse must join in a deed or mortgage to convey his/her interest in the property. KRS 392.020. Kentucky does not recognize civil unions.

Mortgage Tax

Is there a mortgage tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe.

None.

Payment Customs

Who customarily pays for:
(a) Owner’s Policy?
(b) Transfer Tax & Recording Fee?
(c) Survey Charges?
(d) Closing/Settlement Fees?

(a) Owner’s policy - Buyer pays
(b) Transfer Tax - Seller pays
Recording Fees - Buyer pays deed and mortgage recording fees; Seller pays recording fee for the release of existing mortgage(s)
(c) Survey Charges - Buyer pays
(d) Closing/Settlement Fees – Customarily the Buyer pays the majority of the closing fee, with perhaps a small part paid by the seller; it can vary between closers and areas of the state.

Policy Countersignatures

What kinds of countersignatures, if any, are required to issue the policy? 

No signature other than that of the issuing agent is required.

Real Estate Taxes

Please describe the general tax year, due dates, and delinquency dates, including lien dates and payment cycle.

Tax bills generally come out in late October or into November, and can be paid with a discount until December 1, after which the face amount is due. Taxes become delinquent after January 1 of the following year. KRS 134.020. City taxes should be verified directly with the particular city, as their schedules may vary.

Search and Examination Fees

Is it permissible and/or customary to charge a separate search and/or examination fee, and under what circumstances? If your jurisdiction is all-inclusive, please state that.

It is customary to charge a separate title search fee (which can be called an “exam” fee but it is the same fee). Kentucky is not an “all-inclusive” premium state.

Search Requirements

Is there a minimum period of time for a title search required: (a) by state law, (b) pursuant to marketable record title acts, or (c) by any other applicable title examination standards (e.g., state bar association)? Please respond to each category. If a minimum search period exists for any category, please state it.

There are no state-imposed search periods, no marketable record title acts, and no standards imposed by a state bar association. Each underwriter sets its own search standards.

Security Instruments (Deed of Trust vs. Mortgage)

Please describe the customary and permissible form(s) of security instruments used in your state. 

Who can be listed as the trustee on the Deed of Trust (e.g., residency and/or natural person requirements, etc.)? Can an underwriter or title agent be designated as the trustee, and, if so, is it customary?

Mortgage.

Standard Exceptions and Requirements

Please identify the standard exceptions and requirements that are customarily used in your state.

Standard Exceptions are:

Rights or claims of parties in possession not shown by the public records.

Easements or claims of easements, not shown by the public records.

Encroachments, overlaps, boundary line disputes, or other matters which would be disclosed by an accurate survey and inspection of the premises.

Any lien or right to a lien, for services, labor, or material heretofore or hereafter furnished, imposed by law and not shown by the public records.

Subject to _______ taxes, which are not yet due and payable (if applicable).

State-specific Policy Variations

If there are state-specific changes to the provisions in the ALTA policies (e.g., Arbitration, Minerals), please describe.

No state-specific changes required.

Title Insurance Form and Filing Regulations

Please describe the form and/or rate filing requirements, if any, related to policies and endorsements. Please describe any applicable rating bureau. 

Rates and forms are filed with the Kentucky Department of Insurance prior to use. Kentucky is not a rating bureau state.

Transfer Taxes

Is there a transfer tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe.

Transfer tax is uniform across the state. Transfer tax is imposed at fifty cents for each $500 of value as declared in the deed. KRS 142.050(2). See KRS 142.050(7) for exceptions.

Usury

Is usury coverage available?

Usury coverage is available. For more information see KRS 360.010.

Withholding Taxes

What are your state’s requirements, if any, with regard to withholding proceeds from a sale, similar to but not including FIRPTA?

None.

Witness Requirements

Are witnesses required on a deed or security instrument? If so, please describe.

Witnesses are not required for deeds and mortgages, however, both must be acknowledged. KRS 382.270.

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