Kentucky Real Estate Practices
- Attorney Involvement
- Cancellation/Commitment Fee
- Certificate of Release (of Mortgage)
- Good Funds Requirements
- Joinder of Spouses
- Mortgage Tax
- Payment Customs
- Policy Countersignatures
- Real Estate Taxes
- Search and Examination Fees
- Search Requirements
- Security Instruments (Deed of Trust vs. Mortgage)
- Standard Exceptions and Requirements
- State-specific Policy Variations
- Title Insurance Form and Filing Regulations
- Transfer Taxes
- Withholding Taxes
- Witness Requirements
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).
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.
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.
Good Funds Requirements
Is there a good funds requirement in your state?
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.
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.
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.
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.
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?
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.
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.
Is usury coverage available?
Usury coverage is available. For more information see KRS 360.010.
What are your state’s requirements, if any, with regard to withholding proceeds from a sale, similar to but not including FIRPTA?
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.