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Condo | HOA Lawyers

Kentucky Passes Planned Community Act By: Magdalena E. Myers, Esq.

SB120, which the Kentucky Legislature recently passed and was signed by Governor Beshear, creates a new, statutory framework for planned communities (HOAs) throughout the Commonwealth of Kentucky.  This new law creates new sections of KRS Chapter 381, and includes many important provisions for homeowner associations in Kentucky, which have historically lacked a uniform law that guides the operation and creation of these planned communities.  Some of the more significant provisions include:

  • Declarations must provide for a developer control period and specify a time and manner in which the developer’s control ends
  • Associations have the ability to enter lots to fulfill the Association’s responsibilities
  • Boards must adopt a budget, and that budget may include funding reserves for maintenance and repair of capital items, and similar to condominiums, an annual financial report must be prepared every year in accordance with annual revenue levels:
    • Less than $125,000 must prepare a detailed income/expense statement
    • $125,000 to $300,000 in revenue must prepare a financial report compilation by an accounting professional
    • $300,000 to $1,000,000 in revenue must prepare a review by a certified public accountant, and
    • In excess of $1,000,000 in revenue must prepare an audit by a certified public accountant
  • Also similar to condominium associations, if the Board proposes to raise annual assessments by more than 15% over the prior year, the owners must ratify the increase, and owners may rescind or reduce special assessments
  • Requires the Association to keep certain records, including records related to payments, common expenses, minutes, and ownership contact information
  • Annual meetings must be held once per year with a quorum of 10% of the ownership unless the Bylaws provide otherwise, proxies are permitted and can last up to one year, and cumulative voting is prohibited
  • Except for Board executive sessions, all other Board meetings must be open to owners
  • The Board may levy fines for violations, provided that the owner is given written notice and an opportunity for a hearing before the Board prior to levying the fin
  • Associations now have clear collection remedies if an owner fails to pay assessments, including the ability to recover attorneys’ fees, file a continuing lien, and suspend an owner’s right to use the common elements (except roads)
  • To protect political speech, associations cannot prohibit the display of political signs within 30 days before an election and 7 days after an election, but the Board can adopt rules on size, placement, and manner of political displays

Please click here if you would like to read a full copy of the Kentucky Planned Community Act.  This new law goes into effect in June, and gives Kentucky HOAs significant consumer protections, as well as provides for common sense governance provisions for boards and associations to operate.  Kaman & Cusimano will continue to provide its Community Protection Program clients educational opportunities about this new law.  If you have questions on how this legislation impacts your community, please do not hesitate to contact us.


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