Kentucky • Reserve study / underfunding
Is your Kentucky condo's reserve underfunded — and does the state require funding?
A reserve study can read as reassuring while quietly showing your Kentucky building is years behind on saving for its roof, elevators, or façade. What matters is how funded the reserves actually are — and what Kentucky requires.
The short answer
Kentucky does not require a reserve study and does not require the association to fund it. No Kentucky statute (KCA, Horizontal Property Law, or 2023 PCA) requires a reserve study or funding. The resale certificate (KRS 381.9203) does force disclosure of reserve balances and anticipated capital expenditures for the current + next two fiscal years — so a thin reserve against large listed projects is a red flag readable off the certificate. A thin reserve is the most common reason a special assessment lands later, so the study-versus-actual-balance gap is the number that matters. CondoSignal reads your reserve study and budget against Kentucky's rules. Free.Kentucky at a glance
Reserve study
Not required
None — no statutory study, funding level, or update frequency
Reserve funding
Not required
Underfunding is legal here
Super-lien
None
Resale disclosure
Cancellation right
Condos: voidable until the resale certificate is provided and for 5 days thereafter, or until conveyance (KRS 381.9203). HOAs: none.
What Kentucky requires
No Kentucky statute (KCA, Horizontal Property Law, or 2023 PCA) requires a reserve study or funding. The resale certificate (KRS 381.9203) does force disclosure of reserve balances and anticipated capital expenditures for the current + next two fiscal years — so a thin reserve against large listed projects is a red flag readable off the certificate. Whether a thin reserve is merely risky or actually out of compliance depends on that rule — which is the first thing to establish.
Why underfunding becomes an assessment
A board may impose an emergency special assessment by a simple majority of owners present at a special meeting; delinquencies may bear interest up to 18%. Look for ratification records behind any large increase. The 'percent funded' figure in the study, compared to the actual reserve balance, tells you how exposed you are.
What it means for collection and resale
Not a super-lien state — under KRS 381.9193 the automatic assessment lien (perfected by recording the declaration; up to 18% interest + attorney fees) sits behind tax liens, liens recorded before the declaration, and any mortgage recorded before the assessment became delinquent. No six-month super-priority over a first mortgage. The condo resale certificate forces disclosure of unpaid assessments, anticipated capital expenditures (current + next two fiscal years), reserves, recent financials, litigation, and insurance; it must be furnished within 10 days of request. Planned-community HOAs get no equivalent certificate.
Your rights in Kentucky
As a Kentucky owner, your reserve information and any approved special assessments should appear in the association's budget and resale disclosures (condos: voidable until the resale certificate is provided and for 5 days thereafter, or until conveyance (krs 381.9203). hoas: none.). None of this is legal advice — confirm against the current statute and a licensed professional in your state.
What to check
- Find the reserve study's 'percent funded' figure.
- Compare the recommended contribution to what's budgeted.
- Confirm whether Kentucky mandates reserve funding.
- Check the remaining life of the roof, elevators, and façade.
- Look for a reserve catch-up or a recent special assessment.
- Check the study's date — an old study understates today's costs.
Sources
- Kentucky Condominium Act — KRS 381.9101 to 381.9207(High)
- KRS 381.9203 — resale certificate + 5-day cancellation right(High)
- KRS 381.9193 — association assessment lien priority(High)
Educational only — not legal, financial, or engineering advice. Confirm against the current statute and, where it matters, a Kentucky-licensed professional.
FAQ
Frequently asked questions
Not sure what your documents are really telling you?
Get a free CondoSignal review of your situation — we read the paperwork against your state's rules and tell you what to do next. No cost, no obligation.