KY Underwriting Summary

Search/Exam

• Minimum Search Requirements -- No statute, 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.
• Plant or other search restrictions --
• Additional Requirements for REO Searches --
• Foreclosure Checklist --
• Special Searches Required (Code, HOA, Utilities)? --
• Survey Requirements --

UPL

Non-attorneys may conduct real estate closings, but may not answer legal questions that arise at the closing, or offer any legal advice to the parties. Preparation of deeds and mortgages is 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).

Vesting

Kentucky recognizes Tenancy by Entirety & Joint Tenancy -- but does not grant survivorship rights under either unless expressly stated. See Spousal Joinder Requirements below. See KRS § 381.050 (as to TbyE) and KRS § 381.120 and .130 (as to Joint requiring statement of survivorship).

Language conveying to the two grantees “jointly and to the survivor” is sufficient to establish survivorship. Sanderson v. Saxon (Ky. 1992) 834 S.W.2d 676.

The lien of pre-purchase judgment will attach immediately to the debtor spouse's "expectant interest in survivorship" in T by E marital property, and that future interest may be immediately foreclosed upon, but the judgment creditor doesn't get possession until the debtor spouse takes sole ownership. Raybro Electric Supplies, Inc. v. D.J. Barclay, 813 F.Supp. 1267 (W.D. Ky. 1992).

Witness Requirements

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

Property Tax

Tax bills shall be payable in January, delinquent on May 1 of the year for which they are made out KRS § 91.430

Two enforcement Mechanisms

• Enforcement By the Tax Collector
  • Tax Collector may bring suit as early as six months after delinquent. KRS § 91.487
  • Redemption period takes place up to the foreclosure sale. (KRS 91.511).
  • After the sale takes place if the purchase price at the sale is less than the property’s assessed value . KRS 91.511
• Tax Lien Certificate Sales Work
  • As an alternative collection method, the county clerk may sell the tax lien that exists on the home (Ky. Rev. Stat. Ann. § 134.128). The purchaser buys a tax lien certificate (a “certificate of delinquency”) at the sale and can eventually foreclose on the home to collect the amounts due.
  • Suit may be brought one year after delinquent and up to 11 years after delinquency and issuance of the Certificate.
  • Six month redemption after judicial sale if property doesn't bring 2/3 of appraised value. KRS § 426.530 If more, no redemption.
  • Immediate right of possession on sale, even if redemption is available. KRS § 426.530

Mortgage/Transfer Tax

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.

Spousal Joinder Requirements/Homestead

Kentucky recognizes the dower/curtesy interest of non-titled spouses in all property, not just homestead. 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.

A release of dower separate from a deed or mortgage is questionable in Kentucky.

In 2020, Kentucky repealed section 385.020 in the Trust administration code that some argued allowed a separate release/waiver.

Here is what the Fayette County clerk’s website has to say about it.

Release of Dower or Curtsey Interest ________________________________________ The Kentucky Statutes do not permit a "Release of Dower or Curtesy Interest" by married persons as a stand alone document in general. To release a dower or curtsy interest the document must be in the form of a deed or will (KRS 386.095).

There is one exception to this statute - if a married person is mentally disabled, upon the petition of the other spouse, Circuit Court can declare the spouse mentally disabled and permit the waiver of dower or curtesy by permitting that person's Conservator or Guardian to sign on behalf of the disabled spouse or appoint a Commissioner to do the same. (KRS 392.140)

This would not be a stand alone document and would require the Circuit Court order together with the waiver of dower or curtesy in order to be filed.

Kentucky recognizes Tenancy by the Entireties but does not recognize it for survivorship unless survivorship is expressly stated. However, the instrument granting real property to husband and wife must expressly create a mutual right to the entirety by survivorship. Otherwise, the instrument granting real property to husband and wife creates a tenancy in common. KY 381.050

Joint tenancy generally does not include survivorship rights for the surviving tenant(s); that is, the interest in the property formerly held by the deceased joint tenant does not automatically transfer to the other joint tenant(s). However, if an instrument creating a joint tenancy states that it is “with rights of survivorship” or uses other words showing such an intention, then the instrument will create survivorship rights for the surviving tenant(s).

Power Of Attorney

Appointment of a guardian or conservator terminates any power of attorney, unless the court orders otherwise. KRS § 457.080

Guardianship and Conservatorship

Sale or mortgage of property by Guardian or Conservator requires specific order of court. KRS § 389A.010

Probate

The general rule in Kentucky is that upon the death of an owner of land, the title passes directly to the heirs or devisees.

As such, the personal representative has no power to sell land belonging to his decedent except in two situations. The first is when a power of sale is given to him in the will. See KRS 395.220. The second is when the sale of land is approved by a court having jurisdiction over the matter.

See Ky Practice Series: Probate Practice and Procedure s. 1667, 1668 Also: Strode v. Kramer, 293 Ky. 354, 169 S.W.2d 29 (1943). Allen v. Riedling, 283 Ky. 90, 140 S.W.2d 833 (1940). Buckner's Ex'r v. Cromie's Ex'rs, 68 Ky. 603 (1869); E.O. Eshelby Tobacco Co. v. McNamara, 82 S.W. 620, 26 Ky. Law Rep. 889 (1904).

Kentucky REQUIRES an Affidavit of Succession anytime a property has passed by operation of law before the next deed may be recorded. KRS § 382.120 The statute also sets forth the content. Case law holds that omission of an heir in the affidavit does not bar the claim of the omitted heir.

Time Limitations

• US Judgment Liens -- 20 years
• State Court Judgment Liens -- 15 years
  • Judgment does attached to after acquired Property. Purchase Money Mortgage doctrine May not apply in Kentucky after Hays v. Nationstar, 510 S.W.3d 327 (KY App 2017) and U.S. v. Phillips, (WD KY 2019) implicitly overruling prior cases upholding PMM doctrine priority over judgment liens: [https://caselaw.findlaw.com/ky-court-of-appeals/1388435.html Kentucky Legal Systems Corp. v Dunn.
• Federal Tax Liens -- 10 years (+ 30 days)
• State Tax Liens -- 10 years
• Property Tax Liens -- 7 years after delinquency. KRS 91.487 11 years after delinquency if Certificate of Delinquency Sold KRS § 134.546
• Estate Tax Lien -- 10 years
• State Inheritance Tax Liens -- 10 years
• Mechanics Liens -- 1 year
• Financing Statements -- 5 years generally, 30 years if securing Mobile Home 355.9-515

• Mortgages -- 15 years from maturity
• HOA Liens -- 15 years
• Condominium assessments --
• Child Support Liens --