Kentucky Condo Due Diligence Checklist

Where Kentucky due diligence deserves the most attention

Legal Framework

Condominiums (post-2011): Governed by the Kentucky Condominium Act, KRS 381.9101–381.9207, effective January 1, 2011. The KCA was modeled on the 1980 Uniform Condominium Act (UCA) but departs from it in several places. It governs creation, declaration/bylaw contents, allocation of interests, association powers and governance, assessments, liens, insurance, financial records, and purchaser protections (resale certificate). KRS 381.9119 directs that the Act be liberally construed.

Reserve Studies and Reserve Funding

Condos (KCA): The association budgets for and assesses common expenses, and budgets "may include funding reserves for maintenance and repair of capital items." Funding is essentially discretionary — there is no required percentage-funded standard. The resale certificate (KRS 381.9203) requires disclosure of the amount of any reserves for capital expenditures and any portions designated for specified projects, plus anticipated capital expenditures for the current and (if known) next two fiscal years — so the *disclosure* exists even though the *funding ma…

Structural Inspections and Building Safety

Kentucky has no statewide mandate for periodic condominium structural, façade, or balcony inspections — there is no Florida-SB-4D milestone law, no NYC-style façade law, and no California SB-326 balcony statute. Building safety is governed by the Kentucky Building Code (KBC, 2018 edition with later amendments) administered by the Department of Housing, Buildings and Construction (DHBC), Division of Building Code Enforcement, plus local fire/life-safety inspections.

Insurance Requirements and Insurance-Market Risk

Each unit owner is an insured for liability arising from the common elements / association membership.; The insurer waives subrogation against unit owners and household members.; A unit owner's act/omission (outside association authority) will not void coverage.; The association's policy is primary over a unit owner's overlapping coverage.

Resale Disclosures and Buyer Cancellation Rights

Kentucky has a genuine statutory resale-disclosure regime for condos under the KCA — and, thanks to HB 433 (2012), it now applies regardless of whether the condo was created before or after January 1, 2011 (subject to KRS 381.9201 exemptions).

Assessments, Special Assessments, and Borrowing

`special_assessment_pending` – Approved/proposed special assessment not in current budget.; `budget_increase_over_15pct` – Increase above the KCA/PCA 15% owner-ratification trigger.; `ratification_meeting_not_held` – >15% increase without the required ratification meeting.; `emergency_assessment_levied` – Emergency assessment imposed (KCA majority-of-present approval).