REAL ESTATE

LICENSING LAWS
IN KENTUCKY

Published by

Kentucky Real Estate Commission

10200 Linn Station Road, Suite 201
Louisville, KY 40223
(502) 429-7250 or Toll Free at 1-888-373-3300
Website – www.krec.ky.gov

May 2016
This is an unofficial text of statutes and regulations
and is for information purposes only.

For a review of the Legislative Research

Commission’s Official Statutes and Regulations,
please refer to their website at
(http://www.lrc.ky.gov/).
 Matt Bevin
Governor of the
Commonwealth of Kentucky
 Commissioners
BOB ROBERTS KIM SICKLES
PO Box 1177 3215 Fern Valley Road, Ste. 105
Richmond, KY 40476 Louisville, KY 40213

DANA ANDERSON TOM BIEDERMAN

600 N Hurstbourne Pkwy 1076 Wellington Way
Suite 200 Lexington, KY 40513
Louisville, KY 40222

TOM WALDROP
610 Pryor Street
Mayfield, KY 42066

Dear Real Estate Licensees, Students and Consumers

These are the laws under which you must operate as a licensee. It is your responsibility to know these laws
and act accordingly. The Commission encourages you to keep this copy of the law as a desk reference. If you
have any questions, please contact the Commission Office.
The Commissioners
DO YOU HAVE A QUESTION?
The Kentucky Real Estate Commission is open Monday through Friday from 8:00 a.m. to 4:30 p.m. (EST) with the exception of State
Holidays. Many questions can be answered by accessing the Commission’s website (www.krec.ky.gov). If you are unable to find answers
to your questions on our website, please feel free to contact our office.

PHONE – (502) 429-7250 or TOLL FREE – 1-888-373-3300

FAX – (502) 429-7246
WEBSITE – www.krec.ky.gov
 TABLE OF CONTENTS
PAGE
CHANGES TO THE STATUTES & REGULATIONS IN 2008 – 2016 1-3
KENTUCKY REVISED STATUTES CHAPTER 324 4 - 15
324.010 Definitions for Chapter 4

324.020 Requirement of licensing - application of chapter to owner or builder-developer -- Prohibition

against fee splitting – Supervision of sales associate – Authority to seek injunctive relief 4

324.030 Exceptions to KRS 324.020 4

324.040 Application for license as broker or sales associate 5

324.045 Qualifications for license -Examination – Fee – Criminal record check 5

324.046 Requirements for initial licensure 5

324.080 Form of license certificate – Delivery 5

324.085 Continuing education requirements – Post-licensure education requirements –

Qualifications of instructors – Administrative regulations 6

324.090 Expiration of license – Fine for failure to renew on time – Expired status 6

324.111 Escrow account of broker – Interest – Audit - Contract deposit release - Separate property 6
management accounts

324.112 Broker to manage certain branch offices - Qualified sales associate may manage certain branch 6
offices – Registration of branch offices - Filing of licenses – Temporary affiliation of one
principal broker with another

324.115 Brokers required to maintain definite place of business – Exception for reciprocity agreements 7

324.117 Advertising - Affiliations to be listed – Administrative regulations of commission 7

324.121 Designation of licensee as exclusive agent - Effect of designation - Availability of dual agency 7

324.141 Reciprocal licensing between states - Consent to service of process by nonresident applicant 7

324.142 Promotion of sales in Kentucky of property located outside state 7

324.150 Investigation of licensee – Disciplinary action against licensee – Investigative powers of

of commission – emergency hearings 8

324.151 Complaints – answers 8

324.160 Sanctions – Grounds for sanctions 8

324.162 Agent’s duty to disclose 9

324.165 Prohibited business practices – Penalties 9

324.170 Hearing to precede any disciplinary action – Notice - Conduct of hearing 9

324.200 Hearing – Denial of license or any other disciplinary action – Appeal – Stay of judgment
pending appeal 9

324.220 No other license to be issued for five years after revocation 9

324.230 Revocation or suspension of principal broker’s license renders inactive the license of
person associated with broker 10
KENTUCKY REVISED STATUTES CHAPTER 324 (CONTINUED)

Commercial Real Estate Brokerage

324.235 Definitions for KRS 324.235 to 324.238. 10

324.236 Engaging in commercial real estate brokerage by out-of-state principal broker and out-of-state
licensee 10

324.237 Notice of affiliation with Kentucky cooperating broker required 10

324.238 Compliance with KRS 324.160(4) and 324.235 to 324.238 – Sanctions and penalties 11

KENTUCKY REVISED STATUTES CHAPTER 324 CONTINUED

324.281 Kentucky Real Estate Commission – Members – Terms – Vacancies – Duties - Mandatory
continuing education 11

324.2811 Automatic removal of member from commission 12

324.2812 Limitation of commission’s jurisdiction 12

324.282 Election of chairperson – Rules and regulations 12

324.283 Compensation of commission members 12

324.284 Employees – Office - Equipment and supplies 12

324.285 Seal - Records 12

324.286 Disposition of fees - Payment of expenses 12

324.287 Fees 12

324.288 Affiliation fee 12

324.310 Delivery of sales associate’s license to commission when association terminated - Placing 12
license in escrow with commission

324.312 Commission’s right for return of associate’s license – Sanction for failure to return 13

324.330 Notice of change of location, firm name, surname or associate – New license 13

324.360 Form for seller’s disclosure of conditions 13

324.395 Errors and omissions insurance mandatory for all licensees 13

324.400 Real estate education, research and recovery fund – Fees 14

324.410 Purpose of fund 14

324.420 Collection by aggrieved party from recovery fund 14

324.425 Closing existing business of deceased or incapacitated principal broker 15

324.980 Persons to whom KRS Chapter 324 does not apply 15

324.990 Engaging in real estate brokerage without a license – Penalties 15

KENTUCKY ADMINISTRATIVE REGULATIONS 16 - 41

201 KAR 11:011 Definitions for 201 KAR Chapter 11 16

201 KAR 11:030 License cancellation; reasons for 16

KENTUCKY ADMINISTRATIVE REGULATIONS (CONTINUED)

201 KAR 11:045 Written offers to be submitted to owner-client, agreements to provide

brokerage services, licensee duties 16

201 KAR 11:062 Retention of broker’s records 16

201 KAR 11:090 Instruments prepared by broker; disposition 16

201 KAR 11:095 Closing statements 16

201 KAR 11:100 Exclusive listing contract; continuation 16

201 KAR 11:105 Advertising listed property; advertising public information about specific
property; under what conditions consent and authorization of owner or principal broker is required 16

201 KAR 11:110 Exclusive authority retained by original broker 17

201 KAR 11:115 Auction obligations 17

201 KAR 11:121 Improper conduct 17

201 KAR 11:135 Standards for filing a sworn statement 18

201 KAR 11:145 Salesman’s duties when terminating affiliation with broker 18

201 KAR 11:147 Procedure for license retention when sales associate released by broker 18

201 KAR 11:170 Real Estate school and pre-license course approval 18

201 KAR 11:175 Instructor approval procedures and guidelines 20

201 KAR 11:180 Promotion of out-of-state property restrictions and prerequisites 20

201 KAR 11:190 Rules of practice and procedure before the Kentucky Real Estate Commission 21

201 KAR 11:195 Informal settlement procedures 22

201 KAR 11:210 Licensing, education, and testing requirements 22

201 KAR 11:215 License recognition; application requirements 22

201 KAR 11:220 Errors and omissions insurance requirements 23

201 KAR 11:225 License renewal – annual requirements and change request procedures 24

201 KAR 11:230 Continuing education requirements 24

201 KAR 11:232 Continuing education provider requirements 26

201 KAR 11:235 Post-license education requirements 27

201 KAR 11:240 Distance education requirements 28

201 KAR 11:245 Property management procedures and guidelines 30

201 KAR 11:250 Listing and purchase contracts and other agreements entered into by licensees;
provisions required; seller-initiated re-listing request disclosure form 31

201 KAR 11:300 Use of facsimile and electronic-mail transmissions, electronic storage 31

201 KAR 11:350 Seller’s disclosure of property conditions form 32

KENTUCKY ADMINISTRATIVE REGULATIONS (CONTINUED)

201 KAR 11:400 Agency disclosure requirements 32

201 KAR 11:410 Broker duties pursuant to designated agency 34

201 KAR 11:420 Standards for internet advertising 34

201 KAR 11:430 Procedure for criminal records background check; disciplinary action against
licenses for acts committed before or during the application process 34

201 KAR 11:440 Personal assistant duties 35

201 KAR 11:450 Brokerage management course 36

201 KAR 11:460 Minimum rating requirements for instructors 37

Other Helpful Statutes & Regulations

371.010 Statute of Frauds; Contracts to be written 38

383.580 Security deposits 38

207.250 Disclosure of HIV information in real estate transaction prohibited 38

367.46951 Definitions for zero call list 38

367.46955 Prohibited telephone solicitation acts and practices 39

40 KAR 2:075 Commonwealth of Kentucky zero call list 39

376.075 Engineers’, architects’, landscape architects’, real estate brokers’ and land surveyors’ 39
liens- When lien not required of real estate broker-Filing statement of amount claimed.

381.9201 Applicability of KRS 381.9201, 381.9205, and 381.9207 -- Modification or waiver by agreement – 40
Certificate not required in certain cases.

381.9203 Documentation to be furnished by seller of unit – Certificate (Effective April 1, 2012) 40

286.8-290 Mortgage loan originators – Applicability of and exclusion from requirements of subtitle 40

286.8-020 Exemptions 40

369.101-107 Uniform Electronic Transactions Act 40

 CHANGES TO THE STATUTES & REGULATIONS FROM 2008 - 2016
The official language for the statutes and regulations can be emergency power to address alleged escrow violations and can
found on the Legislative Research Commission’s website at order emergency hearings.
www.lrc.ky.gov. Below is a summary of the changes since 2008.
KRS 324.141 Reciprocal licensing between states; Consent
to service of process by nonresident applicant
REGULATIONS EFFECTIVE ON 03/07/2008
201 KAR 11:170 Private school and course approval This change clarified the Commission will no longer enter into
reciprocal agreements with other states for out-of-state licensees
This regulation was amended to require all pre-license courses
to obtain a Kentucky license. NOTE: Although the heading of
to include a closed-book monitored final examination. Students
this statute still says “Reciprocal,” there are no longer any
must obtain at least a 75% in order to pass the exam and only
reciprocal agreements. The Commission now utilizes license
one retake is permitted (2 retakes are now allowed). Students
recognition. The out-of-state licensee’s foreign license will be
must also now complete, with a passing score, a project that is
recognized and the out-of-state licensee must complete the
applicable to the course content. The regulation also changes
application forms, pass the state law portion of the real estate
the pre-license approval period to a two-year cycle and outlines
exam and fulfill a few other requirements. A more detailed
the requirements for submitting materials to the Commission.
explanation can be found under the heading “Regulations
201 KAR 11:210 Licensing, education & testing requirements Effective on 12/4/09,” which explains 201 KAR 11:215.
This regulation now sets forth the requirements for education KRS 324.160 Sanctions – Grounds for sanctions
documents submitted in a language other than English and
The language in this statute (subsection m) regarding
provides for an evaluation process for education completed
inducements and rebates, which became unenforceable in 2005
outside the United States to ensure candidates have fulfilled the
due to an agreement between the U.S. Department of Justice and
high school/GED requirements outlined in KRS 324.040(3).
the Kentucky Real Estate Commission, has been removed.
201 KAR 11:230 Continuing education requirements Although the language had been in the statutes, it has not been
enforced by the Commission since 2005.
The regulation sets the penalty for non-compliance to $500.00
and the previous final delinquency plan opportunity was deleted. KRS 324.2812 Limitation of commission’s jurisdiction
The revision also clarified course/instructor approval processes.
This new law clarifies that the Commission does not regulate
201 KAR 11:240 Distance education requirements nor have jurisdiction over community management associations.
This is a new regulation that sets standards for all online pre- KRS 324.310 Delivery of sales associate’s license to
license and continuing education courses. All courses must be commission when association terminated; Placing license in
certified by ARELLO or IDECC for format and delivery and the escrow with commission; and
KREC will review the content. The regulation outlines the
KRS 324.312 Commission’s right for return of associate’s
requirements for instructors, course layout, and the provider
license; Sanction for failure to return
submission and reporting responsibilities. All such courses
require a final examination that the individual must pass. Changes to these two statutes require principal brokers to return
licenses to the Commission within five (5) days, when the
201 KAR 11:450 Broker management course
principal broker receives a request from a licensee to end his or
This regulation was amended to clarify the course submission her affiliation agreement. If a principal broker does not return
process and to increase the number of questions on the final the license within five (5) days, he or she will be in violation of
examination from 50 to 75 in accordance with 201 KAR 11:170. KRS 324.160(4)(u). If the principal broker is out of town, an
office representative can stamp the principal broker’s name on
STATUTE EFFECTIVE ON 07/15/2008
the back of the license. If the principal broker cannot find the
KRS 324.235 – KRS 324.238 Commercial Law
license, he or she can send a letter to the Commission.
These new statutes became effective on July 15, 2008 and
REGULATION EFFECTIVE ON 10/02/09
govern how out-of-state licensees can practice commercial real
201 KAR 11:230 Continuing Education Requirements
estate brokerage in the state of Kentucky.
The Commission will now accept approved courses in one (1) to
STATUTES EFFECTIVE ON 06/25/2009
six (6) hour increments. Prior to this change, licensees were
KRS 324.010 Definitions for chapter – application of chapter
only allowed credit for courses in three (3) hour increments.
This new law (subsection 11) created a new definition of a
REGULATIONS EFFECTIVE ON 12/4/09
“designated manager,” which is a licensed sales associate or
201 KAR 11:300 Use of facsimile and electronic-mail
broker who manages a main or branch office.
transmissions, electronic storage
KRS 324.111 Escrow account of broker; Interest; Audit;
This regulation was changed to explain the process for using
Contract deposit release; Separate property management
and responding to documents containing electronic signatures.
accounts
201 KAR 11:450 Brokerage management course
This change requires principal brokers to report to the
Commission overdrafts of their escrow accounts that are not This amended regulation puts a one-year limit on the completion
corrected within 72 hours. The Commission now has of projects for passing the brokerage management course.
1
201 KAR 11:121 Improper conduct This new regulation addresses license renewal – annual
requirements and change request procedures.
This regulation was amended to eliminate duplicative
information about guaranteed sales plans. REGULATION EFFECTIVE 11/1/13
201 KAR 11:220 – Errors and omissions insurance
201 KAR 11:215 License recognition; application
requirements
requirements
This amended regulation clarifies that cost of investigation/
This is a new regulation which provides the details for applying
defense is excluded from the limit of liability and annual
for a license under the new license recognition law.
aggregate.
REGULATION EFFECTIVE ON 2/5/10
REGULATIONS EFFECTIVE 10/31/14
201 KAR 11:250 Listing and purchase contracts and other
201 KAR 11:011 – Definitions for 201 KAR Chapter 11
agreements entered into by licensees; provisions required;
seller-initiated re-listing request disclosure form This regulation was amended to delete the definition of “Prize,”
to reflect changes in law allowing rebates and inducements. It
This regulation was amended to include two new sections
was also amended to delete the definitions of “Guaranteed sales
(sections 6 & 7) setting out the requirements that a licensee must
plan” and “Required disclose.” That language was moved to 201
meet regarding negotiating a subsequent listing agreement with
KAR 11:121 where the requirements of a guaranteed sales plan
another broker. These requirements include the use of a form,
are listed.
which can be found on the Commission’s website.
201 KAR 11:105 Advertising listed property; advertising
STATUTES EFFECTIVE 7/15/10
public information about specific property; under what
KRS 324.090 Expiration of license – Fine for failure to
conditions consent and authorization of owner or principal
renew on time – Expired status
broker is required
This statute changed the statutory March 31, 2010 renewal date
This regulation was amended to clarify that a buyer’s agent may
to a date that will be established in a regulation.
advertise his or her role in the sale after a closing has occurred
KRS 324.112 Broker to manage certain branch offices – and to require that his or her participation as a buyer’s agent is
Qualified sales associate may manage certain branch offices conspicuously stated.
– Registration of branch offices – Filing of licenses –
201 KAR 11:121 Improper conduct
Temporary affiliation of one principal broker with another
This regulation was amended to include the definition of
This amendment allows a principal broker to maintain a branch
“Guaranteed sales plan” and the advertising and required
office within 100 miles without a broker managing the office. A
disclosure requirements for guaranteed sales plans. This
branch office outside a 100-mile radius of the main office is
regulation was amended to delete language dealing with
required to have a managing broker. A sales associate with two
licensees acting in the dual capacity of a real estate licensee and
(2) years experience in real estate, averaging at least twenty (20)
a loan originator. This regulation was also amended to remove
hours per week for twenty (24) months prior, may manage a
language prohibiting a Kentucky broker to assist an individual
branch office inside a 100-mile radius of the main office.
not actively licensed in Kentucky in the practice of brokering
KRS 324.330 Notice of change of location, firm name, real estate, which was deemed unconstitutional.
surname or associate – New license
POST-LICENSE STATUTES EFFECTIVE ON 1/1/2016
This statute amends that licensees shall annually file their KRS 324.010 Definitions for chapter – Application of
telephone numbers and email addresses with the Commission. chapter
KRS 324.410 Purpose of fund This statute was amended to add the definition of post-license
education.
This statute was amended to state that the Commission has one
hundred twenty (120) DAYS AFTER THE END OF EACH KRS 324.085 Continuing education requirements – Post-
FISCAL YEAR TO MAKE THE Commission’s Education licensure education requirements -- Qualifications of
Research and Recovery Fund Statement public either through instructors – Administrative regulations
the Commission’s website or other public media.
This statute was amended to require initial sales associates
STATUTE EFFECTIVE ON 7/12/12 licensed after the effective date to complete forty-eight (48)
KRS 324.410 Purposes of fund classroom or online hours of commission-approved post-license
education.
This statute was amended to improve budget management and
financial accountability of the Commission’s two budget STATUTE EFFECTIVE 06/24/2015
accounts, including the Trust and Agency Account and the KRS 324.020 – Requirement of licensing – Application of
Education, Research, and Recovery Fund. chapter to owner or builder-developer – Prohibition against
fee splitting – Exceptions – Supervision of sales associate –
REGULATION EFFECTIVE 7/12/12
Authority to seek injunctive relief.
201 KAR 11:.225 – License renewal – annual requirements
and change request procedures This statute was amended to allow a broker to pay a licensed
auctioneer for services rendered in cases where an auctioneer

2
and real estate broker collaborate in the conduct of a sale of real process; and sets forth the requirements for approval of out-of-
estate at auction. state courses. The amendments provide a definition of
“continuing education course” and changes one (1) hour of CE
REGULATIONS EFFECTIVE 12/4/2015
to be measured by length of instruction, rather than class
201 KAR 11:170 Real estate school and pre-license course attendance. It also removes language that is redundant on forms
approval that are required and now incorporated in the administrative
regulation by reference.
This administrative regulation sets forth the application and
approval process for real estate education schools and pre- 201 KAR 11:232 Continuing education provider
license courses; provides the record maintenance requirements; requirements
sets the criteria for out-of-state course approval; authorizes
This new administrative regulation addresses Continuing
inspections and monitoring by the Commission; sets grounds for
Education (CE) Provider requirements, which were deleted from
revocation of school approval; and prohibits attempts to copy or
201 KAR 11:230. It sets forth the application requirements, CE
reconstruct the real estate licensing examination. The
course curriculum, and out-of-state course approval process. It
amendments simplify the approval process for schools and
incorporates by reference the forms that are required to be used.
course offerings; removes the requirement for third-party course
approval, which will now be conducted by the Commission; and 201 KAR 11:235 Post-license education requirements
it provides a new process for reconsideration of the
This new administrative regulation sets forth the forty-eight (48)
Commission’s intent to withdraw approval.
hour Post-license Education (PLE) requirements. It provides
201 KAR 11:175 Instructor approval procedures and definitions for the key terms “Broker-affiliated Training
guidelines Program” and “Initial Sales Associate License,” and sets forth
the approval requirements for PLE course providers, instructors,
This administrative regulation sets forth the procedures and
and curriculum. It also addresses the compliance and a
guidelines for the approval of an instructor at an approved real
delinquency remedy, record maintenance requirements, and
estate school. This regulation was amended to maintain
incorporates by reference the required forms to be used.
consistency between the requirements for pre-license,
continuing education, and post-license education instructor 201 KAR 11:240 Distance education requirements
approval. Forms have been revised to allow their use for all
This administrative regulation establishes the distance education
three types of instructors.
requirements and criteria for approval of online and other
201 KAR 11:195 Informal settlement procedures distance education methods for pre-license, post-license, and
continuing education courses. It sets forth the approval process
This new administrative regulation allows the Commission,
for distance education courses and sets the criteria for the
after ordering a hearing, to resolve disciplinary proceedings
distance education course and instructor approval. The
without the necessity for a hearing, if all parties agree to settle
Amendment deletes the requirement that these types of courses
the matter by Agreed Order.
be certified by the Association of Real Estate License Law
201 KAR 11:210 Licensing, education and testing Officials (ARELLO) or the International Distance Education
requirements Certification Center (IDECC).
This administrative regulation establishes education standards 201 KAR 11:460 Minimum rating requirements for
and licensure application requirements; provides for procedure instructors
for translating and certifying diplomas and transcripts that are in
This administrative regulation outlines the minimum rating
a foreign language; and requires applicants for licensure to
required of all instructors, the evaluation process, and addresses
apply within 60 days of the real estate license examination. The
the option for instructors who receive ratings below the required
amendments changed the entities ability to provide the
minimum. It incorporates by reference the forms required to be
translation and equivalencies certifications to any service
used.
provider with membership in the National Association of
Credential Evaluation Service and removed the requirement for 201 KAR 11:350 Seller’s Disclosure of property conditions
an official transcript to be imprinted with the institution’s seal, form
signed by the registrar to be sent directly to the Commission by
the institution, in order to allow receipt by electronic This amendment removed the Seller’s Disclosure of Property
transmission. Conditions Form in its entirety from the regulation. It is now
201 KAR 11:230 Continuing education requirements incorporated by reference. It also added a definition of “single
family residential real estate dwelling,” and three new questions.
This administrative regulation establishes the continuing New questions include disclosing if the house is in a “special
education (CE) requirements; sets the requirements for the flood hazard zone;” the name and contact information of the
mandatory six (6) hours of continuing education (CE) and the Homeowner Association if applicable; and whether there is an
annual deadlines for compliance; changes the timeline for when existing environmental hazard form un-remediated
CE must be completed; and provides that CE shall not be methamphetamine. The existing question regarding the
required during the first two (2) calendar years from the date of condition of the “roof” has now been changed to “roof
the initial sales associate license. It also sets forth the non- covering.” Lastly, formatting changes were made to include a
compliance and delinquency remedies; informal settlement “Not Applicable” (N/A) answer to make the form clearer.
3
 KENTUCKY REVISED STATUTES
CHAPTER 324
324.010 Definitions for chapter—Application of chapter the employer a fixed salary governed by federal wage guidelines
As used in this chapter, unless the context requires otherwise: that is not affected by specific real estate transactions;
(1) "Real estate brokerage" means a single, multiple, or continuing act (13)"Referral fee" means consideration of any kind paid or demanded
of dealing in time shares or options, selling or offering for sale, for the referral of a potential or actual buyer, seller, lessor, or
buying or offering to buy, negotiating the purchase, sale, or lessee of real estate;
exchange of real estate, engaging in property management, leasing (14) "Designated agency" means a form of agency relationship that
or offering to lease, renting or offering for rent, or referring or exists when a principal broker, in accordance with KRS 324.121,
offering to refer for the purpose of securing prospects, any real identifies different licensees in the same real estate brokerage firm
estate or the improvements thereon for others for a fee, to separately represent more than one (1) party in the same real
compensation, or other valuable consideration; estate transaction;
(2) "Commission" means the Kentucky Real Estate Commission; (15) "Affiliation" means the relationship agreed upon between a
(3) "Net listing" means a listing agreement that provides for a licensee and a principal broker and reported to the commission,
stipulated net price to the owner and the excess over the stipulated where the licensee places his license with the principal broker for
net price to be received by the licensee as the fee compensation or supervision of the licensee's real estate brokerage activity;
other valuable consideration; (16) "Canceled" means the status of a license when a licensee fails to
(4) "Principal broker" means a person licensed as a broker under KRS renew a license, writes the commission a check for fees that is not
324.046 who, in addition to performing acts of real estate honored, fails to re-affiliate with a principal broker, or fails to
brokerage or transactions comprehended by that definition, is the complete requirements for continuing or post-license education;
single broker responsible for the operation of the company with (17) "Suspended" means the status of a license when disciplinary
which he or she is associated; action has been ordered against a licensee that prohibits the
(5) "Real estate" means real estate in its ordinary meaning and brokerage of real estate for a specific period of time;
includes timeshares, options, leaseholds, and other interests less (18)"Revoked" means the status of a license when disciplinary action
than leaseholds; has been ordered that removes the licensee's legal authority to
(6) "Sales associate" means any person licensed in accordance with broker real estate for a minimum of five (5) years; and
KRS 324.046(2) that is affiliated with a Kentucky-licensed (19)”Post-license education” means the forty-eight (48) hours of
principal broker and who, when engaging in real estate brokerage, commission-approved education required within two (2) years of
does so under the supervision of the principal broker; receiving or activating an initial sales associate license.
(7) "Approved real estate school" means:
(a) A school that has been given a certificate of approval by 324.020 Requirement of licensing – Application of chapter to
the Kentucky Commission on Proprietary Education or owner or builder-developer – Prohibition against fee
other regulatory bodies that exercise jurisdiction over splitting – Supervision of sales associates – Authority to seek
accreditation and approval and the Kentucky Real Estate injunctive relief
Commission. The school shall also be currently in good (1) It shall be unlawful for any person who is not licensed as a real
standing with both the Kentucky Commission on estate broker or sales associate to hold himself out to the public as
Proprietary Education or other regulatory bodies that a real estate broker or sales associate or use any terms, titles, or
exercise jurisdiction over accreditation and approval and abbreviations which express, infer, or imply that the person is
the commission; or licensed as a real estate broker or sales associate.
(b) A National Association of Realtors recognized program (2) No person shall practice real estate brokerage with respect to real
which has been reviewed by the Kentucky Real Estate estate located in this state unless:
Commission and deemed an approved real estate school; (a) The person holds a license to practice real estate brokerage
(8) "Accredited institution" means a college or university accredited under this chapter; or
by appropriately recognized educational associations or chartered (b) The person has complied with KRS 324.235 to 324.238.
and licensed in Kentucky that grants credits toward a program for (3) A licensee who is an owner or a builder-developer shall comply
either an associate, baccalaureate, graduate, or professional with the provisions of this chapter and the administrative
degree: regulations applying to real estate brokers and sales associates.
(9) "Property management" means the overall management of real (4) No broker shall split fees with or compensate any person who is
property for others for a fee, compensation, or other valuable not licensed to perform any of the acts regulated by this chapter,
consideration, and may include the marketing of property, the except that a broker may:
leasing of property, collecting rental payments on the property, (a) Pay a referral fee to a broker licensed outside of Kentucky for
payment of notes, mortgages, and other debts on the property, referring a client to the Kentucky broker; or
coordinating maintenance for the property, remitting funds and (b) Pay a commission or other compensation to a broker licensed
accounting statements to the owner, and other activities that the outside of Kentucky in compliance with KRS 324.235 to
commission may determine by administrative regulation; 324.238.
(10) “Broker” means any person who is licensed under KRS (c) Pay a licensed auctioneer for services rendered in cases
324.046(1) and performs acts of real estate brokerage; where an auctioneer and real estate broker collaborate in the
(11) “Designated manager” means a licensed sales associate or broker conduct of a sale of real estate at auction.
who manages a main or branch office for the principal broker, at (5) Except as authorized in KRS 324.112 (2) and KRS 324.425, no
the principal broker’s direction, and has managing authority over sales associate shall supervise another licensed sales associate or
the activities of the sales associates at that office; manage a real estate brokerage office.
(12) "Regular employee" means an employee who works for an (6) The Kentucky Real Estate Commission may seek and obtain
employer, whose total compensation is subject to withholding of injunctive relief against any unlicensed individual acting in
federal and state taxes and FICA payments, and who receives from
4
 violation of this chapter by filing a civil action in the Circuit Court is allowed to expire without renewal for a period of more than one
where the commission is located or where the unlawful activity (1) year.
took place. (3) The commission shall hold examinations at the times and places it
determines, and an examination fee shall be collected from each
324.030 Exceptions to KRS 324.020 applicant to defray the expenses of holding the examinations.
KRS 324.020(1) and (2) shall not apply to: (4) The commission may, by the promulgation of administrative
(1) Any person who as owner or lessor performs any of the acts regulations, require all licensure applicants to submit to a criminal
defined in KRS 324.010 with reference to property owned or record check for which the applicant shall be responsible for the
leased by him or to his regular employees, with respect to the payment of any fees incurred.
property so owned or leased, if the acts are performed in the (5) Applicants shall be subject to a national criminal history check
regular course of, or as an incident to, the management of the through the Federal Bureau of Investigation. The applicant shall
property and the investment in it; request the criminal history check and shall provide the applicant’s
(2) Any person acting as attorney in fact under a duly executed power fingerprints to either the Federal Bureau of Investigation or the
of attorney from the owner authorizing the final consummation by Kentucky State Police for submission to the Federal Bureau of
performance of any contract for the sale, leasing, or exchange of Investigation to search for information regarding the applicant in
real estate; the National Crime Information Center or its successor entity. The
(3) Any attorney-at-law who is performing his duties as attorney-at- results of the criminal history check shall be sent to the
law; commission, and shall be sent to the applicant at the applicant’s
(4) Any receiver, trustee in bankruptcy, administrator, or executor, request. The applicant shall:
person selling real estate under order of any court, or a trustee (a) Authorize release of the results of the criminal history check
acting under a trust agreement, deed of trust, or will or the regular to the commission;
salaried employees thereof; (b) Pay the actual cost of the fingerprinting and criminal history
(5) A person engaged in property management, if the person: check, if any;
(a) Is a regular employee of the owner or principal broker of the (c) Complete the criminal history check within the ninety (90)
company engaged in property management; or calendar days prior to the date the license application is
(b) Receives as his primary compensation the use of a rental unit; received by the commission; and
or (d) Complete and return to the commission within one hundred
(6) A nonlicensed person under the supervision of a licensed real twenty (120) days a signed affidavit verifying that there is
estate broker who contacts the public for the purpose of setting an nothing on record to prohibit the applicant from licensure.
appointment for the broker to meet with them regarding buying or
selling property and giving out general public information 324.046 Requirements for initial licensure
specifically authorized by the broker. (1) Every applicant for initial licensure as a broker shall have:
(a) Successfully completed not less than twenty-one (21)
324.040 Application for license as broker or sales associate academic credit hours or the equivalent from an accredited
(1) Every applicant for a license, whether as broker or sales associate, institution or approved real estate school. Twelve (12) hours
shall state whether the applicant has ever had any broker’s or sales shall be in real estate courses, three (3) hours of which shall
associate’s license revoked or suspended. Every applicant for a be a course in broker management skills. The commission
license shall furnish a sworn statement setting forth his business shall, by promulgation of administrative regulations,
and residence address. determine the required course content of broker management
(2) Every applicant for a broker’s or sales associate’s license shall skills courses; and
apply in writing upon forms prepared or furnished by the (b) Been engaged in the real estate business as a sales associate
commission. The applicant shall state the name of the person or averaging at least twenty (20) hours per week for a period of
company with which he will be associated in the business of real twenty-four (24) months prior to application.
estate and the location of the place for which the license is desired. (2) Every applicant for initial licensure as a sales associate shall have
The applicant also shall set forth the period of time, if any, during successfully completed six (6) academic credit hours or their
which he has been engaged in the real estate business. equivalent in real estate courses from an accredited institution or
(3) Every applicant for a license shall be at least eighteen (18) years approved real estate school.
of age and shall have attained a high school diploma or its (3) Proof of the academic credit hours shall be an official transcript
equivalent. After an applicant passes the required examination, from the attended university or other documentation satisfactory to
the commission shall issue a license to him. the commission. Proof of the requisite experience as a sales
associate shall be either a sworn notarized statement signed by the
324.045 Qualifications for license – Examination – Fee – principal broker or principal brokers or other documentation
satisfactory to the commission. The applicant may file a complaint
Criminal record check
with the commission if the principal broker unjustly refuses to
(1) Licenses shall be granted only to persons who are trustworthy and
sign the statement.
competent to transact the business of a broker or sales associate in
(4) The commission may reduce the two (2) year experience
a manner to safeguard the interest of the public, and only after
requirement for applicants for a broker's license to one (1) year, if
satisfactory proof of qualifications has been presented to the
the applicant has an associate degree in real estate or a
commission.
baccalaureate degree with a major or minor in real estate.
(2) In addition to proof of honesty, truthfulness, and good reputation
(5) Persons licensed under the real estate laws of this state prior to
of any applicant for a license, each applicant shall pass a written
June 19, 1976 shall not be subject to any educational changes in
examination conducted by the commission, or its authorized
this chapter or subject to any continuing education requirements.
representative. The examination shall be of the scope and wording
sufficient in the judgment of the commission to establish the
competency of the applicant to act as a broker or sales associate in 324.080 Form of license certificate – Delivery
a manner to protect the interests of the public. However, an The commission shall issue to each licensee a license in the
examination shall not be required for the renewal of any present or form and size prescribed by administrative regulation promulgated by
future license, unless the license has been revoked, suspended, or the commission. This license shall show the name and address of the
5
licensee, and, in case of a sales associate’s license, shall show the name commission, in writing, if any overdraft occurs in the escrow
and business address of the principal broker. Each license shall have account for any reason other than service charges instituted by the
imprinted thereon the seal of the commission and other matter bank, and which is not corrected within seventy-two (72) hours of
prescribed by administrative regulation promulgated by the the broker receiving notice.
commission. The license of each sales associate shall be delivered or (2) The broker may place the deposit in an interest-bearing account or
mailed to the principal broker with whom the licensee is affiliated. instrument. The interest earned shall accrue to the person agreed to
in writing by all parties.
324.085 Continuing education requirements – Post-licensure (3) No checks shall be drawn against uncollected deposits in the
education requirements -- Qualifications of instructors – escrow account.
Administrative regulations (4) None of the contract deposits shall be withdrawn until the contract
(1) All actively licensed agents except those licensees exempt under has been terminated by performance, by agreement in writing
KRS 324.046(5), shall successfully complete six (6) classroom or between all parties, or by order of a court of competent
online hours of continuing education each year. Three (3) of the jurisdiction, except as permitted in subsection (6) of this section.
six (6) hours shall be in real estate law. (5) Upon licensure and each renewal, the principal broker shall sign a
(2) A licensee who is issued an initial sales associate license after permit giving the commission the permission to audit all his or her
January 1, 2016, shall complete forty-eight (48) classroom or escrow accounts.
online hours of commission-approved post-license education: (6) Upon being notified that one (1) or more parties to a contract
(a) Provided by one (1) or a combination of the following: intend not to perform, the broker may initiate the release process.
1. An accredited institution; or The release process shall require the broker to notify all parties at
2. A commission-approved: their last known address by certified mail that the contract deposit
a. Real estate school; or shall be distributed to the parties specified in the letter unless all
b. Broker-affiliated training program parties enter into a written mutual release, or unless one (1) or
(b) Within two (2) years of receiving or activating his or her more of the parties initiate litigation within sixty (60) days of the
license unless extended by the commission for good cause mailing date of the certified letter. If neither buyer nor seller
shown. initiates litigation or enters into a written release within sixty (60)
(3) The license held by any licensee failing to complete his or her days of the mailing date of the certified letter, the broker may
sales associate post-license education requirements in accordance release the deposit to the party identified in the certified letter
with subsection (2) of this section shall be automatically canceled, without penalty under this section and without civil liability in the
in accordance with administrative regulations establishing courts of the Commonwealth of Kentucky.
compliance and delinquency procedures. (7) All principal brokers whose companies engage in property
(4) The commission shall promulgate administrative regulations to management shall maintain property management accounts
establish procedures for implementing the requirements of this separate from all other accounts or specifically indicate in all
section. escrow records if funds are property management funds.
(5) In order to qualify to teach continuing education or post-license (8) A broker or sales associate who owns rental property shall not be
courses, all continuing education and post-license instructors shall required to use the principal broker's management account for the
maintain a minimum rating as prescribed by the commission by rental property, unless required by the principal broker.
the promulgation of administrative regulations. (9) If any licensee is alleged to have committed an escrow account
violation that warrants emergency action, the commission may
324.090 Expiration of license – Fine for failure to renew on conduct and emergency hearing as authorized by KRS
324.150(1)(b).
time – Expired status
(1) Licenses shall expire annually and shall be renewed each year on
the date determined by the commission by administration 324.112 Broker to manage certain branch offices – Qualified
regulation. The commission shall renew a license for each sales associate may manage certain branch offices –
ensuing year, in the absence of any reason or condition which Registration of branch offices - Filing of licenses –
might warrant the refusal of the granting of the license, upon Temporary affiliation of one principal broker with another
receipt of the written request of the applicant and payment of the (1) No principal broker shall maintain a branch office outside a one
annual fees required. A new license shall be mailed only if the hundred (100) mile radius of the main office without having a
licensee's name, address, status, or affiliation changes. broker managing the branch office.
(2) A fine not to exceed two hundred dollars ($200) shall be assessed (2) A sales associate with two (2) years experience in the real estate
for failure to renew on time before a new license is issued. Failure business, averaging at least twenty (20) hours per week for a
to receive a renewal form shall not constitute an adequate excuse period of twenty-four (24) months prior, may manage a branch
for failure to renew on time nor shall failure of the mail. office inside a one hundred (100) mile radius of the main office.
(3) Any license not renewed at the end of the renewal year as (3) The principal broker shall register any branch office with the
prescribed by the commission shall automatically revert to expired commission within ten (10) days of the creation of the branch
status. An expired license may be reactivated before a lapse of one office.
(1) year, if delinquent fees are paid by the licensee. (4) The licenses of all licensees shall be kept on file in the office in
which they are actively engaged and affiliated.
324.111 Escrow account of broker – Interest – Audit – (5) A principal broker in the process of closing a real estate brokerage
business may affiliate temporarily with another principal broker if:
Contract deposit release – Separate property management
(a) No other licensee is affiliated with the former principal
accounts broker;
(1) A principal broker shall maintain an escrow account or accounts,
(b) Both the former and the latter principal brokers represent to
separate from the individual or office account, in which all
the commission that the affiliation is for the purpose of
contract deposits and money belonging to others shall be deposited
closing the former principal broker's business; and
without unreasonable delay. The escrow accounts shall be
(c) Both the former and the latter principal brokers give
maintained within the State of Kentucky and shall be identified to
assurances satisfactory to the commission that no consumer
the commission in writing. Each principal broker shall advise the
6
 will be adversely affected by the affiliation or the closing of transaction, only the principal broker or a designated manager
the former principal broker's business. working under the principal broker’s direction shall be deemed to
be a dual agent representing the seller and buyer in a limited
fiduciary capacity. As a dual agent, the principal broker or
324.115 Brokers required to maintain definite place of designated manager shall keep confidential information relating to
business – Exception for reciprocity agreements either party in an individual file that shall be maintained and
(1) Except as provided in subsection (2) of this section, every broker accessed by the principal broker or designated manager only. As a
licensed under KRS 324.045 shall maintain a definite place of dual agent, the principal broker or designated manager shall not
business in this state. disclose to either party confidential information learned relative to
(2) A broker who is a nonresident shall not be required to maintain an the other party. Except as set forth in subsection (3) of this section,
active place of business in this state if: this designation shall not affect the principal broker's or
(a) He or she maintains a business place in the state of original designated manager’s agency relationships in cooperative sales
licensure; between consumers separately represented by nonaffiliated
(b) The state of original licensure, in accordance with its principal brokers or designated managers.
reciprocity agreement with the commission, does not require (3) No exchange of information or knowledge between or among
Kentucky licensees holding licenses in that state to maintain consumers, whether the seller, buyer, lessor, or lessee, and the
an office in that state; and principal broker, the designated manager, the firm, or the licensees
(c) Paragraphs (a) and (b) of this subsection do not conflict with shall be imputed as a matter of law in any real estate transaction.
the commission's agreement of reciprocity with the state of (4) Nothing in this section shall prevent a real estate brokerage firm or
original licensure. licensee from entering into a dual agency relationship with
consumers in a real estate transaction.
324.117 Advertising – Affiliations to be listed –
Administrative regulations of commission 324.141 Reciprocal licensing between state – Consent to
(1) No real estate advertising shall be intentionally false, misleading, service of process by nonresident applicant
or deceptive. (PLEASE NOTE – Although the heading of this statute still says
(2) The name of a deceased broker may remain a part of the firm “Reciprocal, “ the Real Estate Commission no longer has any
name. reciprocal agreements – please see 201 KAR 11:215 for a more
(3) A sales associate may have his or her name in the firm name after detailed explanation)
two (2) years’ experience with the firm, averaging at least twenty (1) (a) An individual who holds an active real estate license issued
(20) hours per week for twenty-four (24) months. by another jurisdiction within the United States may apply
(4) Whenever any real property is listed, a licensee shall include the for a Kentucky license by first:
name of the real estate company listed on the licensee's real estate 1. Completing the application forms;
license or the name of the principal broker, with whom the 2. Passing the state law portion of the licensing
licensee is affiliated in all advertisements of the listed property, examination; and
regardless of who places the advertisement, unless he or she is 3. Fulfilling all other pre-license qualifications as outlined
selling, renting, leasing, or otherwise dealing in his or her own in this chapter.
property. If listed property is advertised by a customer or client of (b) The commission shall promulgate administrative regulations
a listing licensee, the licensee shall, at a minimum, provide the in accordance with KRS Chapter 13A to establish the
customer or client with written notification of the requirements of procedures for implementing paragraph (a) of this subsection.
this section. The licensee shall keep in his or her files a copy of (2) All individuals who have held a real estate license in another
the notification and any other documentation that is generated by jurisdiction, whether the license is currently active or canceled,
the licensee as proof of his or her compliance with this section. shall be required to furnish, as part of his or her application for a
(5) The commission shall, by the promulgation of administrative Kentucky license, a certification of good standing, issued by the
regulations, define false, misleading, or deceptive advertising. jurisdiction. The document shall include the individual’s license
(6) The commission shall, by the promulgation of administrative history and any disciplinary information available from that
regulations, define the manner in which licensees may utilize any jurisdiction.
Internet electronic communication for advertising or marketing. (3) Every nonresident applicant shall file an irrevocable consent
stating that legal actions may be commenced against the applicant
in the proper court of any county of this state in which a cause of
324.121 Designation of licensee as exclusive agent – Effect of
action may arise in which the plaintiff may reside, by the service
designation – Availability of dual agency of any process or pleading authorized by the laws of this state on
(1) A principal broker may designate one (1) or more affiliated
the commission, the consent stipulating and agreeing that service
licensees to act as agent for a seller or lessor, to the exclusion of
of process of pleadings on the commission shall be taken and held
all other licensees affiliated with the principal broker. A principal
in all courts to be as valid and binding as if service had been made
broker may designate one (1) or more affiliated licensees to act as
upon the applicant in the State of Kentucky. Any process or
agent for a buyer or lessee, or prospective buyer or lessee to the
pleadings served upon the commission shall be by duplicate
exclusion of all other licensees affiliated with the principal broker.
copies, one (1) of which shall be filed in the office of the
The designation procedure shall be made in writing and
commission and the other immediately forwarded by certified
communicated to all licensees affiliated with the principal broker.
mail, return receipt requested, to the main office of the applicant
The designated agent shall inform and obtain the consent of the
against which the process or pleadings are directed.
buyer or lessee, or prospective buyer or lessee to the designation.
The designated agent shall inform and obtain the consent of the
seller or lessor to the designation. The principal broker shall not
324.142 Promotion of sales in Kentucky of property located
designate himself or herself as a designated agent. outside state
(2) If a principal broker designates one (1) or more licensees to Any licensee who engages in promotional activities in this
represent the seller and one (1) or more other licensees to Commonwealth for property located outside of this Commonwealth
represent the buyer or the prospective buyer in the same shall first apply to the commission for its approval before so doing, and
shall comply with administrative regulations, restrictions, and
7
conditions the commission may impose as well as those provisions set (4) If any licensee is alleged to have committed an escrow account
forth in this chapter. violation that warrants emergency action, the commission may
conduct an emergency hearing as authorized KRS 324.150(1)(b).
324.160 Sanctions – grounds for sanctions
324.150 Investigation of licensee – Disciplinary action (1) The commission may order any or all of the following sanctions
against licensee – Investigative powers of commission – for violation of subsections (4) to (7) of this section:
Emergency hearings (a) Suspension of any license;
(1) (a) The commission or its staff may on its own initiative (b) Revocation of any license;
investigate the actions of any licensee or any person who acts (c) Levy of fines not to exceed one thousand dollars ($1,000);
in that capacity. On the verified written complaint of any (d) Placing of any licensee on probation for a period of up to
person, the commission shall investigate the actions of any twelve (12) months;
person who assumes to act in that capacity, if the complaint, (e) Requiring successful completion of academic credit hours or
together with any evidence presented in connection with it, additional credit hours in real estate courses from an
alleges a prima facie case that a violation set out in KRS accredited institution or approved real estate school; or
324.160 has been committed. After the investigation, the (f) Issuing a formal or informal reprimand.
commission may order a hearing and, in appropriate cases, (2) A canceled license may be renewed if the licensee pays all
take disciplinary action against any licensee who is found in necessary fees and meets all other active licensure requirements
violation of KRS 324.160. within one (1) year of the cancellation date. No licensee whose
(b) The commission may conduct an emergency hearing when license is canceled shall engage in real estate brokerage during the
alleged escrow account violations warrant emergency action. period of cancellation or receive any compensation for real estate
The commission shall promulgate administrative regulations brokerage unless the compensation was earned prior to the
to describe the specific circumstances and allegation that effective date of the cancellation.
authorize emergency action. The emergency hearing shall be (3) No licensee whose license is suspended shall engage in real estate
conducted in accordance with KRS Chapter 13B, as it relates brokerage or receive any compensation for real estate brokerage
to emergency orders and emergency hearings. unless the compensation was earned prior to the suspension
(2) To investigate allegations of practices violating the provisions of period.
this chapter, the commission may: (4) The commission shall impose sanctions set out in subsection (1) of
(a) Issue subpoenas to compel attendance of witnesses and the this section against a licensee for:
production of books, papers, documents or other evidence; (a) Obtaining a license through false or fraudulent
(b) Administer oaths; representation;
(c) Review evidence; (b) Making any substantial misrepresentation or failing to
(d) Enter the office or branch office of any principal broker for disclose known defects which substantially affect the value of
the purpose of inspecting all documents required by the the property;
commission to be maintained in the principal brokers office (c) Making any false promises of a character likely to influence,
or branch office which relate to the allegations of practices persuade, or induce;
violating the provisions of this chapter; (d) Pursuing a continued and flagrant course of misrepresentation
(e) Examine witnesses; and or making false promises through agents or advertising or
(f) Pay appropriate witness fees. otherwise;
(e) Acting for more than one (1) party in a transaction without
324.151 Complaints – Answers the knowledge of all parties for whom the licensee acts;
(1) All complaints against licensees shall be submitted to the 1. A real estate licensee shall not directly or indirectly buy
commission on forms furnished by the commission. The property listed with him or her or with the broker with
complaint shall state facts which, if true, would constitute a prima whom the licensee is affiliated, nor acquire an interest
facie case that the licensee has violated the provisions of KRS therein, without first indicating in writing on the offer to
324.160. If the complaint does not constitute a prima facie case, purchase his or her status as a licensee;
the commission shall allow the complainant ten (10) days to revise 2. Before a licensee becomes a party to a contract to
and supplement the complaint in order to cure any defect. If the purchase real property, the licensee shall disclose his or
complainant fails to respond within ten (10) days or if the revised her status as a licensee to all parties to the transaction, in
and supplemented complaint does not constitute a prima facie case writing, on the sales contract or on the offer to purchase;
that the licensee has violated the provisions of KRS 324.160, the 3. Before a licensee sells, or receives compensation for
commission shall dismiss the matter without requiring the licensee property in which the licensee owns an interest, the
to file or serve a response. licensee shall disclose, in writing, any interest in the
(2) If the complaint constitutes a prima facie case that a licensee has property to all parties to the transaction;
violated the provisions of KRS 324.160, a copy of the complaint, (f) Accepting valuable consideration for the performance of any
exhibits attached thereto, and any subsequent pleadings, shall be of the acts specified in this chapter, from any person, except
served on the licensee, by the commission, at the licensee's last from his or her principal broker in accordance with a
known address and shall show certification that there has been compensation agreement between them. When acting as an
service by writing to the last known address. agent in the management of property, a real estate licensee
(3) If the commission serves the complaint upon the licensee, the shall not accept any commission, rebate, or profit on
licensee shall file with the commission an answer to the complaint, expenditures made for a client without the full knowledge
properly notarized, on forms secured from commission offices. and consent of the client;
The answer shall be returned to the commission within twenty (g) Representing or attempting to represent a broker other than a
(20) days. The licensee shall deliver to the complainant at his or principal broker, without the express knowledge and consent
her last known address a copy of the answer, exhibits attached of the principal broker with whom the licensee is affiliated;
thereto, and any subsequent pleadings. All further pleadings in the (h) Failing to account for or remit, within a reasonable time, any
matter filed with the commission by either party shall show that a money belonging to others that comes into the licensee's
copy has been furnished to the opposing party or parties. possession. When acting as a property manager, the licensee
8
 shall render an accounting and remit all moneys to his or her including any leasehold or security interest for an obligation,
client strictly in accordance with the contract of employment; information not required by this chapter or applicable federal law.
(i) Paying valuable consideration to any person for services
performed in violation of this chapter; 324.165 Prohibited business practices – Penalties
(j) Entering a plea of guilty or an "Alford" plea to, or having (1) No person shall:
been found guilty of, or having been convicted of, a felony or (a) Solicit or request a referral fee from a real estate licensee
of a misdemeanor involving sexual misconduct the time for unless that person introduced the business to the real estate
appeal has lapsed or the judgment or conviction has been licensee from whom the referral fee is sought and a
affirmed on appeal, irrespective of an order granting contractual referral fee relationship exists between the person
probation following the conviction suspending the imposition and the real estate licensee; or
of sentence; (b) Threaten to reduce or withhold employee relocation benefits
(k) Failing to report a conviction, plea of guilty, or an "Alford" or to take other action adverse to the interests of a client of a
plea to a felony or a misdemeanor involving sexual real estate licensee because of an agency relationship.
misconduct to the commission; (2) No real estate licensee, relocation firm, or firm with a corporate
(l) Soliciting, selling, or offering for sale real property under a relocation policy or benefits, or anyone on behalf of any licensee
scheme or program that constitutes a lottery, contest, or or firm, shall counsel a client of another real estate licensee
deceptive practice; regarding the manner in which the client may terminate or amend
(m) Acting in the dual capacity of licensee and undisclosed an existing listing contract, buyer agency agreement, or other
principal in any real estate transaction; agency relationship. Communicating corporate relocation policy
(n) Guaranteeing, authorizing, or permitting a person to or benefits to a transferring employee shall not be considered a
guarantee that future profits shall result from a resale of real violation of this section, as long as the communication does not
property; involve advice or encouragement regarding the manner in which
(o) Negotiating or attempting to negotiate the sale, exchange, the client may terminate or amend an existing agency relationship.
lease, or rental of real property, or attempting to obtain a (3) Violation of this section by a broker or sales associate shall be
brokerage agreement with a consumer knowing that the considered improper conduct as referred to in KRS 324.160 (4)(u).
consumer had a written outstanding contract granting Violation of this section by unlicensed persons shall be subject to
exclusive agency with another real estate broker; the penalties in KRS 324.990.
(p) Publishing or circulating an unjustified or unwarranted threat
of legal proceedings or other action; 324.170 Hearing to precede any disciplinary action – Notice
(q) Failing or refusing on demand to furnish copies of a – Conduct of hearing
document pertaining to a transaction dealing with real estate (1) The commission shall, before denying an application for license or
to a person whose signature is affixed to the document; before ordering any disciplinary action against a licensee, order a
(r) Failing, within a reasonable time, to provide information hearing. The hearing shall be conducted in accordance with the
requested by the commission as a result of a formal or provisions of KRS Chapter 13B. If the applicant or licensee is a
informal complaint to the commission which may indicate a sales associate, the commission shall also notify the principal
violation of this chapter; broker of the hearing by mailing notice by certified mail, return
(s) Paying valuable consideration to any person for the name of receipt requested, to the broker's last known business address. The
potential sellers or buyers, except as otherwise provided in commission shall order the presence of the principal broker or his
KRS 324.020 (4); or her designated representative at the hearing.
(t) Violating any of the provisions in this chapter or any lawful (2) All hearings shall be conducted by a quorum of the commission or
order, rule, or administrative regulation made or issued under by a hearing officer appointed by the commission. Hearing
the provisions of this chapter; officers shall not order any disciplinary action against a licensee.
(u) Any other conduct that constitutes improper, fraudulent, or The function of hearing officers appointed to conduct hearings
dishonest dealing; or shall be to preside at the hearing and to prepare a recommended
(v) Gross negligence. order to be submitted to the commission.
(5) Any conduct constituting a violation of the Federal Fair Housing (3) If any licensee is alleged to have committed an escrow account
Act including use of scare tactics or blockbusting, shall be violation that warrants emergency action, the commission may
considered improper conduct as referred to in subsection (4)(u) of conduct an emergency hearing as authorized by subsection KRS
this section. 324.150(1)(b).
(6) No unlawful act or violation of any provision of this chapter by
any affiliated licensee of the principal broker shall be cause for
324.200 Hearing – Denial of license or any other disciplinary
holding the principal broker primarily liable, unless the broker has
knowledge of the unlawful violation and did not prevent it. The
action – Appeal – Stay of judgment pending appeal
(1) If the commission determines after a hearing that any applicant is
principal broker and his or her designated manager, if any, shall
not entitled to receive a license, a license shall not be granted to
exercise adequate supervision over the activities of licensed
the applicant, and if the commission determines after a hearing
affiliates and all company employees to ensure that violations of
that any licensee has violated any of the provisions of this chapter,
this chapter do not occur. The failure of a broker or his designated
the disciplinary measures in KRS 324.160(1) may be ordered.
manager to exercise adequate supervision of the licensed affiliates
(2) Any party aggrieved by the action of the commission in refusing
shall constitute a violation of this chapter.
to grant a license or in ordering any disciplinary action may appeal
(7) The practice of obtaining, negotiating, or attempting to negotiate
to the Circuit Court where the licensee has his principal place of
"net listings" shall be considered improper dealing.
business or where the applicant resides in accordance with KRS
Chapter 13B. Disciplinary action imposed by the commission
324.162 Agent’s duty to disclose shall be automatically stayed during the pendency of an appeal to
An agent licensed under this chapter representing a party in the
a circuit or appellate court, unless otherwise indicated in the final
sale, leasing, or exchange of real property shall have no affirmative
order of the commission.
duty to disclose to any person who acquires, by voluntary or
involuntary transfer, a legal or equitable interest in real property,
9
 (2) The out-of-state principal broker shall enter into a written
324.220 No other license to be issued for five years after cooperation agreement with the Kentucky cooperating broker that
revocation shall include but not be limited to the following:
No person who has had a broker's or sales associate's license (a) The terms of cooperation and compensation between the out-
revoked shall be issued another license for five (5) years from the date of-state principal broker and the Kentucky cooperating
of revocation. All persons seeking issuance of another license after the broker;
five (5) year period of revocation may do so only at the discretion of (b) A description of the parties, the commercial real estate, or
the commission and shall retake the appropriate examination and meet other information sufficient to identify the specific
all of the contemporary licensing requirements. transactions governed by the cooperation agreement; and
(c) The effective date and a definite termination date of the
324.230 Revocation or suspension of principal broker’s cooperation agreement; and
(3) Regarding transactions that fall within the scope of the
license renders inactive the license of person associated with
cooperation agreement specified in subsection (2) of this section,
broker the out-of-state principal broker and the out-of-state licensee shall:
The revocation or suspension of a principal broker's license shall
(a) Work in cooperation with a Kentucky cooperating broker;
automatically render inactive every license granted to any person by
(b) Furnish the Kentucky cooperating broker with a copy of the
virtue of association with the principal broker whose license has been
out-of-state principal broker's and out-of-state licensee's
revoked or suspended, pending a change of principal broker and the
current real estate license from the jurisdiction of his or her
issuance of a new license. Such new license shall be issued without
primary place of business;
charge, if granted during the same year in which the original license
(c) Limit acts of real estate brokerage to commercial real estate
was granted.
transactions referenced in the cooperation agreement;
(d) Only list commercial real estate located in this state for sale,
Commercial Real Estate Brokerage lease, or exchange if the real estate is co-listed with the
324.235 Definitions for KRS 324.235 to 324.238 Kentucky cooperating broker;
As used in KRS 324.235 to 324.238, unless the context requires (e) Be prohibited from holding escrow funds, security deposits,
otherwise: or other moneys in escrow or other accounts located outside
(1) (a) "Commercial real estate" means any parcel of real estate this state;
located in this state that is: (f) Promptly provide the Kentucky cooperating broker with
1. Lawfully used primarily for sales, retail, wholesale, relevant documentation relating to the specific transaction or
office, research, institutional, warehouse, manufacturing, transactions governed by the cooperation agreement;
or industrial purposes; (g) Keep the Kentucky cooperating broker fully informed of all
2. Lawfully used primarily for multifamily residential activities through prompt communications;
purposes involving five (5) or more dwelling units; or (h) Perform all actions under the direct supervision and control
3. Zoned for a business or commercial use by a planning of the Kentucky cooperating broker;
unit acting pursuant to KRS Chapter 100. (i) List his or her individual name, firm name, or both in
(b) "Commercial real estate" does not include single-family advertising for commercial real estate transactions only if the
residential units such as condominiums, townhouses, advertising:
manufactured homes, or homes or lots in a subdivision when 1. Includes with equal prominence the same identifying
sold, or residential units otherwise conveyed on a unit-by- information for the Kentucky cooperating broker and his
unit basis, even if those units are a part of a larger building or or her relevant licensees, except that, with respect to
parcel of real estate containing more than four (4) residential multistate portfolio listings, only the name or firm of the
units; Kentucky cooperating broker printed in legible type
(2) "Cooperation agreement" means a written co-brokerage, referral, shall be mandatory, with no requirement concerning
affiliation, or other agreement or arrangement between an out-of- prominence; and
state principal broker and a Kentucky cooperating broker; 2. Otherwise complies with the requirements of this
(3) "Kentucky cooperating broker" means a principal broker licensed chapter;
under this chapter who has entered into a written cooperation (j) Comply with and be bound by and subject to Kentucky law
agreement with an out-of-state principal broker; and the regulations of the commission, including but not
(4) "Out-of-state principal broker" means an individual who is limited to KRS 324.235 to 324.238;
licensed as a real estate broker in a jurisdiction other than (k) Not engage in improper conduct as set out in KRS
Kentucky, and who is the designated broker with whom one (1) or 324.160(4); and
more out-of-state licensees are affiliated or associated; and (l) File with the Kentucky cooperating broker a true and
(5) "Out-of-state licensee" means an individual who is licensed as a complete notice of affiliation in compliance with KRS
real estate broker or real estate sales associate in a jurisdiction 324.327.
other than Kentucky, and who is affiliated or associated with an
out-of-state principal broker. 324.237 Notice of affiliation with Kentucky cooperating
broker required
324.236 Engaging in commercial real estate brokerage by (1) A notice of affiliation required under KRS 324.236(3)(l) shall be
out-of-state principal broker and out-of-state licensee filed with the Kentucky cooperating broker and shall include the
An out-of-state principal broker and his or her out-of-state following:
licensee, for or in the expectation of a fee, commission, compensation, (a) The name, firm name, firm address, firm telephone number,
or other valuable consideration, may engage in real estate brokerage and real estate license number of the Kentucky cooperating
with respect to commercial real estate if the requirements of this section broker;
are satisfied: (b) The name, firm name, firm address, firm telephone number,
(1) The out-of-state licensee shall be licensed with and work under the address for service of process, and current real estate license
direct supervision of the out-of-state principal broker; numbers and jurisdictions of licensure of both the out-of-state
principal broker and out-of-state licensee;
10
 (c) The effective date and a definite termination date of the (b) Issue a formal or informal reprimand;
corresponding cooperation agreement between the Kentucky (c) Report misconduct to the licensing authority of any state;
cooperating broker and the out-of-state principal broker; (d) Revoke or suspend the authority of the out-of-state principal
(d) An agreement that the out-of-state principal broker and out- broker or out-of-state licensee to perform acts of real estate
of-state licensee shall: brokerage with respect to commercial real estate;
1. Each comply with and be subject to KRS 324.235 to (e) Publish and maintain a public registry of any sanctions or
324.238, Kentucky law, and administrative regulations penalties imposed pursuant to this subsection; and
promulgated by the commission; (f) Report suspected violations of KRS Chapter 523 to the
2. Not engage in improper conduct as set out in KRS Commonwealth's attorney of the county in which the office
324.160(4); and of the commission is located.
3. Ensure that all documentation pertaining to transactions
falling within the scope of the cooperation agreement Kentucky Revised Statutes Continued
complies with Kentucky law; 324.281 Kentucky Real Estate Commission – Members –
(e) The irrevocable consent of the out-of-state principal broker
Terms – Vacancies – Duties – Mandatory continuing
and out-of-state licensee that legal actions may be
commenced against them in the proper court of any county in
education
(1) There is hereby created the Kentucky Real Estate Commission.
this state in which a cause of action may arise or in which the
The Governor shall appoint five (5) persons, at least four (4) of
plaintiff may reside, by the service of process on the
whom, immediately prior to the date of their appointment have
Kentucky Secretary of State pursuant to KRS 454.210, and
been residents of the state for ten (10) years and whose vocation
stipulating and agreeing that service of process on the
for a period of at least ten (10) years shall have been that of an
Kentucky Secretary of State shall be taken and held in all
active real estate licensee. One (1) member shall be a citizen at
courts to be as valid and binding as if service had been made
large who is not associated with or financially interested in the
upon the out-of-state principal broker and out-of-state
practice or business regulated. The term of the members of the
licensee in this state;
commission shall be for four (4) years and until their successors
(f) A statement that the out-of-state principal broker and out-of-
are appointed and qualify, except as provided in subsections (2)
state licensee are trustworthy and competent to transact
and (3) of this section.
business in a manner to safeguard the interests of the public,
(2) All appointments shall be for the specified four- (4) year term. No
and that during the five (5) year period prior to the filing of
person appointed after July 14, 2000 shall serve more than two (2)
the notice of affiliation:
consecutive terms.
1. No state has revoked the real estate license of the out-of-
(3) For each appointment or vacancy, the Kentucky Association of
state principal broker or out-of-state licensee pursuant to
Realtors shall supply a list of not less than three (3) names of
a disciplinary action; and
licensees to the Governor each year from which the broker or sales
2. Neither the out-of-state principal broker nor the out-of-
associate appointments shall be made. The Governor may fill
state licensee has been convicted of a felony in any
vacancies arising in the middle of the year from those remaining
jurisdiction; and
on the list or from a new list supplied by the association.
(g) A statement that the out-of-state principal broker and out-of-
(4) There shall not be more than three (3) of any one (1) political
state licensee each consent to any criminal records check
party serving on the commission at the same time. Appointees to
undertaken by the commission in connection with any
fill vacancies shall be appointed for the unexpired term.
investigation pursuant to KRS 324.150.
(5) It shall be the duty of the commission to promulgate
(2) A notice of affiliation shall be true and complete and shall be
administrative regulations; to hold disciplinary hearings
signed or otherwise authenticated under penalty by both the out-
concerning matters in controversy as provided by this chapter; to
of-state principal broker and out-of-state licensee.
conduct examinations for applicants eligible under this chapter or
(3) An out-of-state principal broker and out-of-state licensee may
alternatively to contract with an entity to conduct examinations; to
enter into cooperation agreements and notices of affiliation with
conduct necessary educational seminars and courses directed
respect to more than one (1) Kentucky cooperating broker.
toward continuing education within the real estate field; to
investigate or cause to be investigated any irregularities in
324.238 Compliance with KRS 324.160(4) and 324.235 to violation of this chapter or the promulgated and authorized
324.238 – Sanctions and penalties administrative regulations of the commission; to participate with
For purposes of KRS 324.235 to 324.238: any other agency of the Commonwealth or the authorized agency
(1) A person licensed in a jurisdiction where there is not a legal of another state for the betterment or improvement of the
distinction between a real estate principal broker and a real estate administration of the statutes or administrative regulations
broker or salesperson shall satisfy the requirements of an out-of- governing this commission. Any action taken by the commission
state principal broker; under this subsection shall be appealable as are other actions of the
(2) Preliminary exchanges of information and materials, discussions, commission under this chapter.
and investment or other advice pertaining to commercial real (6) The commission, at its discretion, may use the funds necessary to
estate shall not constitute acts of real estate brokerage by out-of- purchase liability insurance for members and executive officers of
state principal brokers or out-of-state licensees; the commission, inspectors, and for members of the staff
(3) If any change in circumstances prevents compliance by the out-of- exempted from classified service of the state by KRS 18A.115.
state principal broker or out-of-state licensee, that person shall (7) The commission shall require all actively-licensed agents, except
immediately cease and desist from performing acts of real estate for those agents who were licensed prior to June 19, 1976, to
brokerage with respect to commercial real estate; and successfully complete mandatory continuing education as a
(4) The commission may impose one (1) or more of the following condition of license renewal.
sanctions or penalties against an out-of-state principal broker or an (8) The commission shall, by the promulgation of administrative
out-of-state licensee for failure to substantially comply with KRS regulations, develop a review process by which continuing
324.235 to 324.238 or for engaging in improper conduct as set out education courses may be approved for credit. An applicant may
in KRS 324.160(4): seek the commission's approval for credit for courses not
(a) Levy fines not to exceed one thousand dollars ($1,000); previously approved by the commission by submitting sufficient
11
 information describing the course to the commission for review. warrants of the director of finance as warrants generally are required to
be drawn by the statutes governing such respective offices from time to
324.2811 Automatic removal of member from commission time, when vouchers therefor are exhibited and approved by the
A member shall be automatically removed from the commission commission; provided, that the total expense for every purpose incurred
and a vacancy shall be created if: shall not exceed the total fees, charges, fines and penalties imposed
(1) A licensee of the commission ceases to be a broker or sales under the provisions of this chapter and paid into the State Treasury.
associate; All expenses incurred by the commission and designated for payment
(2) A consumer member of the commission acquires a license or out of the real estate education, research and recovery fund, including
financial interest in the practice of real estate; payments to aggrieved parties and the expenses of carrying on the
(3) A member enters a plea of guilty to, or has been found guilty of, a educational and research requirements of KRS 324.410, shall be paid
felony in which fraud is an essential element or to any crime out of the real estate education, research and recovery fund in the same
involving moral turpitude and the time for appeal has lapsed or the manner as required in this section for payments out of the general fund;
judgment or conviction has been affirmed on appeal; or provided, that the total expenses and payment for every purpose
(6) A member ceases to be a bona fide resident of this incurred and designated for payment out of the real estate education,
Commonwealth. research and recovery fund shall not exceed the total fees, charges and
interest received by the commission and paid into the real estate
324.2812 Limitation of commission’s jurisdiction education, research and recovery fund of the State Treasury.
Nothing in this chapter or the administrative regulations
promulgated under the authority of this chapter shall extend the 324.287 Fees
jurisdiction of the Kentucky Real Estate Commission to community The commission shall set, charge, and collect the following fees:
association managers and the management or business activities of not- (1) Examination fee, not to exceed one hundred dollars ($100).
for-profit community associations, which includes townhouse, (2) Broker's and sales associate's original license fee, not to exceed
condominium, homeowner, or neighborhood associations. thirty dollars ($30).
(3) Broker's and sales associate's renewal fee, not to exceed thirty
324.282 Election of chairperson – Rules and regulations dollars ($30).
The commission, immediately upon qualification of the member (4) Transfer from one (1) principal broker to another, not to exceed
appointed in each year, shall organize by selecting from its members a ten dollars ($10).
chairperson. The commission shall promulgate administrative (5) Certification of status with the commission, ten dollars ($10).
regulations in accordance with KRS Chapter 13A and this chapter to (6) Request for any change, not to exceed ten dollars ($10).
effectively carry out and enforce the provisions of this chapter, but the (7) Recovery fund, not to exceed thirty dollars ($30).
commission shall not promulgate any administrative regulation which (8) Broker's and associate's applicant license criminal record check
in any way fixes prices, establishes fees, or sets the rate at which fee, not to exceed thirty dollars ($30).
licensees are compensated.
324.288 Affiliation fee
324.283 Compensation of commission members No affiliation fee shall be charged in any year to a licensee. As
Each member of the commission shall receive as compensation used in this section, "affiliation fee" means any fee or compensation
fifteen thousand dollars ($15,000) per annum and actual and necessary paid by a licensee, to any person, for the privilege of listing his license
expenses incurred in the performance of duties pertaining to the office. with a particular principal broker, in records submitted to the
commission.
324.284 Employees – Office – Equipment and supplies
The commission shall employ, and at its pleasure discharge, a 324.310 Delivery of sales associate’s license to commission
secretary, and such clerks and assistants as shall be deemed necessary when association terminated – Placing license in escrow with
to discharge the duties imposed by the provisions of this chapter, and the commission
shall outline their duties and fix their compensation subject to the (1) If any sales associate is discharged or terminates his or her
general laws of the state. The commission shall obtain such office association with the principal broker, it shall be the duty of the
space, furniture, stationary, fuel, light, and other proper conveniences, broker to immediately deliver or mail to the commission the sales
as shall be reasonable necessary for carrying out the provisions of this associate's license in a manner that complies with KRS 324.312,
chapter. along with the release statement signed by the principal broker.
The broker shall, at the time of mailing the sales associate's license
324.285 Seal – Records to the commission, address a communication to the last known
The commission shall adopt a seal with the design the commission residence address of the sales associate, which shall advise the
prescribes engraved thereon, by which it shall authenticate its sales associate that his or her license has been delivered or mailed
proceedings. All records kept in the office of the commission under the to the commission. A copy of the communication to the sales
authority of this chapter shall be open to public inspection under the associate shall accompany the license when mailed or delivered to
administrative regulations as shall be prescribed by the commission. the commission. It shall be unlawful for any sales associate to
perform any of the acts contemplated by this chapter either
324.286 Disposition of fees – Payment of expenses directly or indirectly under authority of the sales associate’s
Except for the fees and charges paid by the licensees to the license from and after the date of receipt of the license from the
commission and deposited in the real estate education, research and broker by the commission.
recovery fund, all fees and charges collected by the commission under (2) A licensee may place his or her license in escrow with the
the provisions of this chapter shall be paid into the general fund in the commission provided that:
State Treasury. All expenses incurred by the commission under the (a) The licensee does not engage in any real estate activity for
provisions of this chapter, including compensations to members, others during the term of escrow of the license; and
secretaries, clerks, and assistants, except those expenses designated for (b) The licensee pays the annual license renewal fees for each
payment out of the real estate education, research and recovery fund, year the license is in escrow.
shall be paid out of the general fund in the State Treasury upon (3) At the request of the licensee, upon the meeting of requirements
applicable to active licensees and completion of all continuing
12
 education requirements, a license placed in escrow shall be transaction shall provide a blank form to the property's owner and
automatically converted to an active license upon payment of the shall request that the property's owner complete and sign the form.
established change fee. If the property's owner completes and signs the form, the licensee
shall deliver the form to the buyer or potential buyer not later than
324.312 Commission’s right for return of associate’s license one hundred twenty (120) hours after the creation of any
– Sanction for failure to return executory contract for sale of the property. The licensee shall
(1) A principal broker shall return an associate's license to the solicit the signature of the buyer on a copy of the form as
commission immediately: delivered to the buyer or prospective buyer and shall retain the
(a) Upon the written termination of the association between the copy in his or her principal broker's records. The signature of the
broker and the associate; or buyer or prospective buyer shall evidence the listing agent's
(b) At any time upon the commission’s request. compliance with the provisions of this section. Should the buyer
(2) If a principal broker fails to return a license to the commission as refuse to sign the form, the licensee shall record the buyer's refusal
required by subsection (1) of this section within five (5) business to sign on the form and retain a copy in his or her principal
days, the commission shall consider the license as released, and broker's records.
the principal broker shall be in violation of subsection of KRS (6) The original of the form shall be retained by the listing broker or
324.160(4)(u). by the broker of any licensee who presents an offer on a property
not subject to a listing agreement.
324.330 Notice of change of location, firm name, surname, or (7) The form shall not be required for residential purchases of new
homes if a warranty is offered, for a sale of real estate at an
associate – New license
auction, or for a court supervised foreclosure.
(1) Notice in writing shall be given to the commission by each
(8) If the seller refuses to complete and sign the form, his refusal shall
licensee of any change of principal business location, a change of
be communicated in writing by the broker or sales associate who
firm name, sales associate’s transfer from one (1) principal broker
is involved in the transaction to the purchaser or prospective
to another, or a change of surname. The commission shall issue a
purchaser, without unreasonable delay.
new license for the unexpired period and shall charge the fee as
(9) It shall be a violation of this chapter for a licensee to complete any
provided in KRS 324.287(6) for effecting the change on its
portion of the form unless the licensee is the owner of the property
records. This section shall apply to both brokers and sales
or has been requested by the owner to complete the form. The
associates.
request shall be acknowledged in writing on the form and the
(2) The commission shall be notified in writing of a change of
licensee shall be held harmless for any representation that appears
residence address within ten (10) days.
on the form.
(3) A fee shall be assessed for certification of a licensee’s status with
the commission.
(4) The commission shall, by the promulgation of administrative 324.395 Errors and omissions insurance mandatory for all
regulations, require all licensees to file with the commission, at licensees
annual renewal, their telephone numbers and, if applicable, their (1) All real estate licensees, except those whose licenses are in escrow
electronic mail addresses. in accordance with KRS 324.310(2), shall carry errors and
omissions insurance to cover all activities contemplated under this
324.360 Form for seller’s disclosure of conditions chapter.
(1) This section shall apply to sales and purchases involving single- (2) The commission shall make the insurance mandated under this
family residential real estate dwellings if any person licensed section available to all licensees by contracting with an insurance
under this chapter receives compensation. provider for a group policy, after competitive, sealed bidding in
(2) The commission shall promulgate an administrative regulation accordance with KRS Chapter 45A.
authorizing a "seller's disclosure of conditions form." (3) Any policy obtained by the commission shall be available to all
(3) The form shall provide for disclosure by the seller of the licensees with no right on the part of the insurance provider to
following: cancel any licensee.
(a) Basement condition and whether it leaks; (4) Licensees shall have the option of obtaining errors and omissions
(b) Roof condition and whether it leaks; insurance independently, if the coverage contained in the policy
(c) Source and condition of water supply; and the financial condition of the insurance company complies
(d) Source and condition of sewage service; with the minimum requirements established by the commission.
(e) Working condition of component systems; and (5) The commission shall determine the terms and conditions of
(f) Other matters the commission deems appropriate. coverage mandated under this section, including, but not limited
(4) The seller of the property shall complete and sign the form at the to, the minimum limits of coverage, the permissible deductible,
time he or she executes any listing agreement or similar agreement and permissible exemptions.
by which a licensee intends to market the property. A copy of the (6) Each licensee shall be notified of the required terms and
form shall be provided by the listing agent to any prospective conditions of coverage for the annual policy at least thirty (30)
buyer or a buyer's authorized representative upon request. A copy days prior to the annual license renewal date. A certificate of
of the form shall be delivered by the listing agent to any coverage, showing compliance with the required terms and
prospective purchaser or his representative within seventy-two conditions of coverage, shall be filed with the commission by the
(72) hours of the listing agent's receipt of a written and signed annual license renewal date by each licensee who opts not to
offer to purchase. The listing agent shall solicit the signature of the participate in the group insurance program administered by the
buyer on a copy of the form which the listing agent shall retain in commission.
the principal broker's records. The signature shall evidence the (7) If the commission is unable to obtain errors and omissions
listing agent's compliance with the provisions of this section. insurance coverage to insure all licensees who choose to
Should the buyer refuse to sign the form, the licensee shall record participate in the group insurance program at a reasonable annual
the buyer's refusal to sign on the form and retain a copy in his premium, not to exceed two hundred dollars ($200), the insurance
principal broker's records. requirement mandated by this section shall be void during the
(5) If the subject property is offered for sale by the property's owner applicable contract year.
without a listing agreement, any licensee involved in the
13
 (d) To contract for a particular research project in the field of real
324.400 Real estate education, research and recovery fund -- estate for the Commonwealth of Kentucky;
Fees (e) To sponsor, contract for, and to underwrite other educational
(1) There is hereby created and established in the State Treasury the and research projects of a similar nature having to do with the
real estate education, research, and recovery fund. advancement of the real estate field in Kentucky;
(2) In addition to the license fees provided for in KRS 324.287, upon (f) To receive recommendations and to cooperate and work with
renewal of every broker's and sales associate's license, as well as the Kentucky Association of Realtors and other real estate
any and all other types of licenses, if any, issued by the groups for the enlightenment and advancement of the real
commission, as of June 30, 1972, and every regular annual estate licensees of Kentucky; and
renewal date thereafter, the commission shall charge each of the (g) To augment the trust and agency account for purposes of
aforesaid licensees an amount not to exceed thirty dollars ($30) addressing cash flow shortfalls, budget deficits, and for
per year to be included in the real estate education, research, and reimbursement of personnel, administrative, operational, and
recovery fund. Each and every original applicant for a license after capital expenses incurred by the trust and agency account
July 1, 1972, shall likewise submit to the commission an pursuant to the purposes of the education, research, and
additional fee of thirty dollars ($30) to be deposited in the real recovery fund as provided in this section, an amount not to
estate education, research, and recovery fund and shall also be exceed two hundred fifty thousand dollars ($250,000)
subjected thereafter to an annual renewal fee as of the regular annually.
renewal period. (4) Within one hundred (120) days after the end of each fiscal year,
(3) In addition to the license fees provided for in KRS 324.287, the the commission shall make public, through its Web site or other
commission, based upon its own discretion as to need, may assess public media, a statement of income and expenses of the real
each licensee upon renewal an amount less than thirty dollars estate education, research, and recovery fund, the details of which
($30) per year, or nothing, but not more. Each original applicant are in accordance with state financial reports requirements.
must pay the original amount of thirty dollars ($30), but on
renewal will be subjected to the same renewal amount as other 324.420 Collection by aggrieved party from recovery fund
licensees. (1) An aggrieved party may commence an administrative action
which may result in collection from the recovery fund by first
324.410 Purposes of fund filing a complaint with the commission on a form prepared by the
The purposes of the real estate education, research and recovery fund commission. The complaint shall constitute a prima facie case that
shall be as follows: a licensee is in violation of KRS 324.160 and is subject to the
(1) If a license, acting in the capacity of a licensee, has been duly same conditions set forth in KRS 324.150. If the complaint
found guilty of fraud in the violation of one (1) or more of the constitutes a prima facie case and the matter is not settled, the
provisions of KRS 324.160, and upon the conclusion of a final commission shall hold a hearing pursuant to the requirements set
order entered by the commission, or by the courts, if appealed, the forth in the provisions of this chapter and KRS Chapter 13B to
commission, may pay to the aggrieved person or persons an determine if a violation of this chapter has in fact occurred. If a
aggregate amount not to exceed twenty thousand dollars ($20,000) violation of fraud is so found, the commission shall determine if
per claimant with combined payments to all claimants against any the violation resulted in damages to complainant and in what
one licensee, not to exceed fifty thousand dollars ($50,000), if the amount. If damages cannot be accurately determined, then the
licensee has refused to pay the claim within a period of twenty amount of damages shall be determined by a Circuit Court in the
(20) days of entry of a final order and if the amount or amounts of county where the violation took place. In the event the question of
money in question are certain and liquidated. damages is referred to the Circuit Court, the decision of the
(2) The commission shall maintain a minimum level of four hundred commission will not be final and appealable until the question of
thousand dollars ($400,000) for recovery and guaranty purposes. damages is certifiable.
These funds may be invested and reinvested in the same manner as (2) Upon final order by the commission or upon certification to the
funds of the state employee’s retirement system and the interest commission by the Circuit Court on the issue of damages, and
from the investments shall be deposited to the credit of the real after the licensee has refused to pay the claim within a period of
estate education, research, and recovery fund. Sufficient liquidity twenty (20) days of entry of a final order, the aggrieved party or
shall be maintained so that there shall be money available to parties shall be paid the amount or amounts by the commission
satisfy any and all claims which may be processed through the from the recovery fund.
commission through the means of formal administrative hearing as (3) The license of the licensee against whom the claim was made by
outlined in this chapter. the aggrieved party shall be suspended or may be permanently
(3) The commission, in its discretion, may use any and all funds in revoked until such time as the licensee has reimbursed the
excess of the four hundred thousand dollars ($400,000) level, recovery fund in full for all amounts paid, plus interest at the rate
regardless of whether it is from the real estate education, research, of ten percent (10%) per annum.
and recovery fund fees or accrued interest thereon, for the (4) Any party aggrieved by a final order of the commission may
following purposes: appeal to the Circuit Court where the licensee has his principal
(a) To carry out the advancement of education and research in place of business or where the applicant resides in accordance
the field of real estate for the benefit of those seeking a real with KRS Chapter 13B.
estate license, and those licensed under the provisions of this (5) Upon the final order of the court and after the commission has
chapter and the improvement and making more efficient the paid from the real estate education, research, and recovery fund
real estate industry; any sum to the aggrieved party, the commission shall be
(b) To underwrite educational seminars, caravans, and other subrogated to all of the rights of the aggrieved party to the extent
forms of educational projects for the use and benefit of the payment. The aggrieved party shall to the extent of the
generally of real estate licensees; payment assign his right, title and interest in the judgment to the
(c) To establish a real estate chair or courses at Kentucky state commission. After such assignment, the commission may
institutions of higher learning for the purpose of making the challenge in bankruptcy court any attempt by a former licensee to
courses available to licensees and the general public who may discharge the debt, if proper notice is given. Any funds recovered
seek them on a college or university level. by the commission shall be deposited in the real estate education,
14
 research, and recovery fund. 324.425 Closing existing business of deceased or
(6) No aggrieved party shall be entitled to recover compensation from incapacitated principal broker
the real estate education, research, and recovery fund unless the In case of death or other incapacity of a principal broker having a
action against the licensee is commenced within two (2) years licensed sales associate or sales associates affiliated at the time of death
from actual knowledge of the cause of action or from the time or other incapacity, the commission reserves the right in its discretion,
when circumstances should reasonably have put the aggrieved based upon the merits of each case, to permit one (1) of the sales
party on notice of the cause of action. associates to complete and close the then existing business of the
(7) An aggrieved party shall not be entitled to recover compensation deceased or incapacitated broker for a temporary period not to exceed
from the real estate education, research, and recovery fund, unless six (6) months.
the compensation is for the actual financial harm suffered by the
aggrieved party, and this financial harm is specifically and directly 324.980 Persons to whom KRS Chapter 324 does not apply
related to the property. Nothing in KRS Chapter 324 shall be construed to apply to a
(8) For purposes of this section, an "aggrieved party" shall mean person engaged solely in the business of compiling and categorizing
either: information concerning the location and availability of real property
(a) A member of the consumer public who stands in a direct which may be leased or rented and who furnishes such information to
relationship to the licensee, i.e., one who demonstrates an prospective tenants for a fee.
interest in purchasing, leasing, renting, or otherwise securing
an interest in real estate through a licensee and who believes
324.990 Engaging in real estate brokerage without license –
that the licensee is in violation of the provisions of this
chapter; or
Penalties
(1) Any person engaging in real estate brokerage without a license
(b) A member of the consumer public who directly engages the
shall be guilty of a Class A misdemeanor for the first offense and a
services of a licensee for purposes of selling, leasing, renting,
Class D felony for any subsequent offenses. A person who
or otherwise dealing in his or her own property.
engages in real estate brokerage without a license due to a failure
(9) If at any time the money on deposit in the real estate education,
to renew a previously valid Kentucky license shall not be subject
research and recovery fund is insufficient to satisfy any duly-
to this penalty if the person is entitled to and does avail himself of
authorized claim or portion thereof, the commission shall, when
the remedial provisions of KRS 324.090(3).
sufficient money has been deposited in the real estate education,
(2) In addition to the penalties set out in this chapter, a Circuit Court
research, and recovery fund, satisfy such unpaid claim or portions
may impose an additional penalty on any person who violates any
thereof, in the order that such claims or portions were originally
provision of this chapter by fining them not less than one hundred
filed, plus accumulated interest at the rate of ten percent (10%) per
dollars ($100) nor more than one thousand ($1,000) or
annum.
imprisoning them for a term not to exceed six (6) months, or both.
(10) Any funds in excess of the four hundred thousand dollar
Upon conviction, in addition to the aforesaid fine, there shall be
($400,000) level which are not being currently used, may be
added to the fine the amount of any real estate brokerage
invested and reinvested as set forth in subsection (2) of KRS
commission paid or received as a result of the violation or
324.410.
violations in question. Each transaction shall be regarded as a
separate offense and shall be punished as such.

15
 KENTUCKY ADMINISTRATIVE REGULATIONS
KENTUCKY REAL ESTATE COMMISSION
In accordance with the laws of the Commonwealth, the following that are involved in the lease or purchase of the real estate that
regulations have been approved by the Legislative Research is the subject of the written agreement between the licensee and
Commission: This is an unofficial version. The official version can his principal, owner-client, or customer, until a lease or
be found at www.lrc.ky.gov. purchase agreement is signed and all contingencies that are
satisfied or waived; and
201 KAR 11:011. Definitions for 201 KAR Chapter 11 (4) Answer his or her principal’s, owner-client’s, or customer’s
RELATES TO: KRS 324.010(1), 324.046(1), 324.111(1), (2), (3), questions relating to offers, counteroffers, notices, and
(4), (6), 324.117(1), (5), 324.160(4)(j), (m), (r), 324.410(1), contingencies that are involved in the lease or purchase of the
324.420(1), (2), (3), (4), (5) real estate that is the subject of the written agreement between
Section 1. Definitions. the licensee and his principal, owner-client, or customer.
(1) "Academic credit hour" means: Section 2. Each licensee, who represents a prospective purchaser,
(a) One (1) college semester hour; or shall, without delay, submit all written offers to lease or purchase
(b) Sixteen (16), fifty (50) minute hours of actual classroom real estate from the licensee’s prospective purchaser-client or
attendance customer to the owner of the property or to the licensee who has
(2) “Contract Deposit” means money delivered to a licensed agent entered into any written agreement with the property owner-client or
as part of an offer to enter a contract for the sale of real customer to provide one (1) or more real estate brokerage services
property after: for the property owner-client or customer for a fee, compensation or
(a) The offer or counteroffer is accepted; and other valuable consideration.
(b) An executory contract exists. Section 3. Failure to comply with Section 1 or 2 of this
(3) "False, misleading, or deceptive advertising" means an administrative regulation shall constitute gross negligence and shall
advertisement that is prohibited pursuant to KRS 324.117(1) be subject to sanctions under KRS 324.160(4)(w).
because the advertisement:
(a) Is contrary to fact; 201 KAR 11:062. Retention of brokers' records
(b) Leads a person to a mistaken belief or conclusion; or RELATES TO: KRS 324.111, 324.160(6), 324.360
(c) Knowingly made a representation that is contrary to fact. Section 1. A broker shall preserve, for five (5) years following its
(4) "Fraud" or "fraudulent dealing" means a material consummation, records in one (1) file relating to any real estate
misrepresentation that: transaction, which shall include:
(a) Is: (1) Any written offers to lease or purchase real estate;
1. Known to be false; or (2) The acquisition of and disbursement of any monies;
2. Made recklessly; (3) Listing and sales contracts;
(b) Is made to induce an act; (4) Closing sheets;
(c) Induces an act in reliance on the misrepresentation; and (5) Property disclosure forms; and
(d) Causes injury. (6) Agency disclosure forms.
(5) "Without unreasonable delay" means within three (3) business
days of the creation of an executory contract for the sale or 201 KAR 11:090. Instruments prepared by broker;
lease of real property. disposition
RELATES TO: KRS 324.160(4)(r)
201 KAR 11:030. License cancellation; reasons for Section 1. At the time of signing all instruments, a real estate broker
RELATES TO: KRS 324.310, 324.330 shall deliver a copy of all instruments to all parties executing the
Section 1. A license shall be automatically cancelled if the licensee instruments where the instrument has been prepared by the broker or
fails to promptly notify the commission, in writing, of any of the under his supervision.
changes listed in KRS 324.330 (1) and (2).
201 KAR 11:095. Closing statements
201 KAR 11:045. Written offers to be submitted to owner- RELATES TO: KRS 324.160(4)(r), (w)
client, agreements to provide brokerage services, licensee Section 1. A real estate broker shall furnish a debit and credit type
duties closing statement to a buyer and seller upon closing a real estate
RELATES TO: KRS 324.160(4)(w) transaction if the financial institution or the attorney involved in a
Section 1. If a licensee has entered into a written listing agreement or real estate transaction fails to furnish a closing statement.
any other written agreement under the terms of which the licensee
agrees to provide one (1) or more real estate brokerage services for 201 KAR 11:100. Exclusive listing contract; continuation
the owner of the property to be brokered by the licensee, the licensee RELATES TO: KRS 324.160
shall, at minimum: Section 1. No real estate broker shall be a party to an exclusive
(1) Accept delivery and submit to his principal, owner-client, or listing contract which shall contain an automatic continuation of
customer, without delay, all written offers to lease or purchase the period of such listing beyond the fixed termination date set
the real estate that is the subject of the written agreement forth therein.
between the licensee and his principal, owner-client, or
customer; 201 KAR 11:105. Advertising listed property; advertising
(2) Accept all earnest money deposits that are presented to him or public information about specific property; when consent
her by other licensees involved in the lease or purchase of the and authorization of owner or principal broker is
real estate that is the subject of the written agreement between
required
the licensee and his principal, owner-client, or customer;
RELATES TO: KRS 324.117(1),(4), 324.160(4)(w), (6)
(3) Assist his or her principal, owner-client, or customer in
Section 1. A real estate broker shall not offer real estate for sale or
developing, communicating, negotiating, and presenting offers,
lease without the consent of the owner.
counteroffers, and notices that relate to offers and counteroffers

16
(1) If promoting or advertising the real estate to the general public, (2) Purchase of the owner’s real estate if the owner’s real estate is
the broker shall have a written listing agreement signed by the not sold by the broker.
owner. Section 2
(2) (a) After a closing has occurred, a buyer’s agent may (1) It shall constitute improper conduct for a licensed agent to:
advertise his or her role in the sale. (a) Accept or agree to accept, without written disclosure to the
(b) The advertisement shall conspicuously state that his or her seller and buyer or lessor or lessee on the purchase or lease
participation was as the buyer’s agent. contract, a referral fee from any person in return for
Section 2. A sign shall not be placed on any property by a real estate directing a client or customer to that person, or another,
licensee without the written consent of the owner. who provides or agrees to provide any goods, service,
Section 3. insurance or financing related to a transaction involving
(1) In accordance with KRS 324.117(4), a real estate property real estate. This provision shall not affect paying or
print advertisement of a licensee, or an offer or solicitation to receiving referral fees between licensed agents for
provide brokerage services by a licensee, related to marketing brokerage services.
or identifying real property for sale or lease, shall include the (b) Refuse or prohibit any prospective purchaser from viewing
name of the real estate company where the licensee’s license or inspecting real estate listed for sale or lease with the
is held or the name of the real estate company’s principal agent, or with the agent’s company, without the written
broker with whom the licensee is affiliated. and signed direction of the owner. This provision shall not
(2) If the advertisement includes the name of the real estate be construed to permit otherwise unlawful discrimination;
company’s principal broker, the principal broker’s name shall (c) Fail to satisfy one (1) or more of the following fiduciary
include his or her title as principal broker or be followed by duties owed to the licensee’s client:
any other clear designation of his or her status as a broker. 1. Loyalty;
(3) The requirements in this section shall apply to advertisements 2. Obedience to lawful instructions;
for listed property only. 3. Disclosure;
Section 4. 4. Confidentiality;
(1) An advertisement by a licensee shall be approved by 5. Reasonable care and diligence;
(a) The principal broker with whom the licensee is affiliated; 6. Accounting;
or (d) Advertise a guaranteed sales plan without:
(b) An individual designated by the principal broker to 1. Disclosing whether:
approve the advertisement. a. A fee is charged for participation;
(2) A principal broker shall require his or her licensee to: b. The real estate shall meet qualifications for
(a) Discuss with the property owner-client the advertising participation;
requirements of KRS 324.117; c. The purchase price under a guarantee of purchase of
(b) Provide the owner-client with written notice of these the owner’s real estate shall be determined by the
advertising requirements; and licensee or a third party; and
(c) Obtain the owner-client’s written agreement to comply d. The owner of the real estate shall purchase other real
with the advertising requirements. estate listed for sale for the licensee or his or her
Section 5. A licensee may advertise public information, such as designee; and
sales price, of properties that have sold and closed, even if the 2. Including, in:
licensee did not have a written listing agreement on the property. a. Print advertising, letter that shall be at least twenty-
Section 6. A licensee may advertise listings of another real estate five (25) percent the size of the largest letter in the
brokerage company if: advertisement;
(1) The licensee has requested and obtained the listing broker’s b. Radio advertising, communication that shall be
consent to advertise the other company’s listing or listings; and clearly understandable; or
(2) The licensee’s advertisement of the other company’s listings c. Television advertising:
includes the complete name of the other real estate brokerage (i) Verbal communication that shall be clearly
company. understandable;
(ii) Written communication that shall appear on the
201 KAR 11:110. Exclusive authority retained by screen at least three (3) seconds for the first line
original broker of lettering and at least one (1) one second for
RELATES TO: KRS 324.160 each additional line of lettering and in letters
Section 1. No real estate broker shall induce any party to a contract that shall be at least eighteen (18) video scan
or sale or lease to break such contract for the purpose of lines in size for uppercase letters or at least
substituting in lieu thereof a new contract with another principal. twenty-four (24) video scan lines for uppercase
capital letter if uppercase capitals and lowercase
201 KAR 11:115. Auction obligations letters are used; or
RELATES TO: KRS 324.160 (iii) Any combination of verbal and written
Section 1. Any real estate broker who advertises real property at communication that shall comply with the
absolute auction is obligated to the public to sell said property to requirements of this clause; or
the highest bona fide bidder on the day of the auction. (e) Violate a provision of KRS Chapter 324 or 201 KAR
Chapter 11 governing brokers, sales associates, or real
201 KAR 11:121. Improper conduct estate transactions.
RELATES TO: KRS 324.010(3), 324.160(4), (f), (l), (m), (o), (w), (2) It shall not be considered improper conduct for a licensed agent
(v), (5), (7) to advertise the fee or other compensation the licensed agent
Section 1. Definition “Guaranteed sales plan” means an offer or agrees to charge for his or her services.
solicitation to guarantee the:
(1) Sale of an owner’s real estate; or

17
201 KAR 11:135. Standards for filing a sworn statement (f) Copy of legal documentation required to support an
RELATES TO: KRS 324.045, 324.046(3), 324.160(4)(a), (v) answer, if applicable;
Section 1. Any affiant found to have misrepresented facts in any (g) A sample copy of an official transcript that will be issued
sworn statement shall be subject to disciplinary proceedings by the by the school.
commission and the commission may seek a criminal indictment for (h) A copy of contract or agreement signed by the student
perjury. which outlines the class schedule, assignments or
projects, examination requirements, grading system, and
201 KAR 11:145. Salesman’s duties when terminating attendance requirements; and
affiliation with broker (i) Other documents as outlined in Section 2 of this
RELATES TO: KRS 324.010(14), 324.160(4)(g), (v), 324.310 administrative regulation.
Section 1. Unless there is a written contract stipulating otherwise, a (2) An approved real estate school shall include a statement in the
real estate salesman shall, upon termination of his affiliation with a school application that a criminal conviction may prevent an
real estate broker, immediately turn over to the broker any and all applicant from qualifying for licensure under KRS 324.045.
listing information obtained during his affiliation whether the Failure to do so may result in suspension of an approved
information was originally given to him by his broker or copied from school's certification until the information is included in the
the records of the broker or acquired by the salesman during his application.
affiliation. (3) An approved real estate school shall notify the commission
within ten (10) days of a material change in the information
originally furnished on the application or in an attachment to
201 KAR 11:147. Procedure for license retention when
the application.
sales associate released by broker (4) An Education Course Application, Form E102, shall be
RELATES TO: KRS 324.010(15), 324.160(4)(u), 324.310,
submitted by October 1 of each even numbered year. The
324.330
approval shall be for a two (2) year period, beginning
Section 1.
November 1.
(1) Upon receipt, by regular mail, from the principal broker, of
Section 2.
the released license for a sales associate pursuant to KRS
(1) The curriculum for a pre-license course at an approved real
324.310(1), the commission shall notify the sales associate by
estate school shall:
regular mail at his or her last resident address on file at the
(a) Include a minimum of:
commission office that, within thirty (30) days of the date of
1. Three (3) academic hours per course; or
the release letter, the associate shall:
2. Fifteen (15) hours for a course related to the
(a) Reaffiliate with another broker; or
appraisal of property;
(b) Request by letter that his or her license be placed in
(b) Be conducted for a maximum of no more than nine (9)
escrow.
hours during a twenty-four (24) hour period;
(2) Failure by the sales associate to comply with the order issued
(c) Consist of a course containing the topics listed in the
by the commission pursuant to subsection (1) of this section
Pre-License Prescribed Topics – Form E112 by the Real
shall:
Estate Commission.
(a) Be a violation of KRS 324.160(4)(u); and
1. A real estate course shall be designated specifically
(b) Result in the cancellation of the associate’s license.
as a real estate course by an approved or accredited
real estate school that offers the course.
201 KAR 11:170. Real estate school and pre-license 2. The academic content for the course shall
course approval specifically focus on real estate.
RELATES TO: KRS 324.010(7), 324.046(1), (2), 324.085 3. The course shall be for academic credit and not a
Section 1. continuing education unit, examination preparation
(1) To apply for certification as an approved real estate school or or review, experiential education, or competency
to renew certification, a real estate school shall submit a: testing.
(a) Completed Provider Application – Form E101, including 4. A candidate shall not submit completion of the
the information required concerning curriculum, same course or essentially the same course twice for
instructors, required textbooks, educational materials and licensure credit;
policies of the school; (d) Include a closed-book monitored final examination of
(b) Copy of the license from the Kentucky Commission on at least:
Proprietary Education, if applicable; (1) a. Fifty (50) multiple choice questions for a three
(c) Sample schedule to outline how a course will be (3) hour academic course; or
presented; b. 100 multiple choice questions for a six (6) hour
(d) Completed detailed Course Outline – Form 105 broken academic course
into four (4) hour increments to include teaching 2. The passing score shall be seventy-five (75) percent
methods, learning objectives for the course, auxiliary in order to pass the course.
aids and materials for each course, which shall include: 3. Examination questions shall cover all aspects of
1. Instructor Application – Form E100 and any material covered in the course, including applicable
additional documents required to explain a response license laws and administrative regulations.
on the application for each instructor who will teach 4. Two (2) retakes of the examination shall be
this course, as required by 201 KAR 11:175; and permitted; and
2. A copy of the written material, other than the (e) Include in all real estate pre-license courses, a practicum
textbook or real estate license law manual, which or project applicable to the topic, that shall be completed
the instructor will use in the classroom; with a passing score and averaged with the final
(e) Sample copy of a school brochure or information sheet examination and other components or assignments
promoting the school; required in the course, as part of the student’s final
grade.
18
(2) The application for course approval shall include a copy of (c) Failure to provide within ten (10) days a specific
the final examination and answer key, an explanation and summary detailing why credit is merited under this
copies of the project or practicum that shall be required of section shall constitute waiver by the applicant and the
students, when that assignment shall be due, and how the final education director’s decision shall become final at that
grade for the course shall be calculated. point;
(3) (a) All primary and secondary providers offering online pre- (9) (a) If the applicant indicates disagreement with the
license or other distance education courses shall be education director’s decision within ten (10) days of
approved in accordance with the provisions set forth in notification and provides a written summary detailing the
201 KAR 11:240. disagreement within ten (10) days of notification, the
(b) The commission shall review the content to ensure that it commission shall consider the submissions from the
meets the requirements outlined in this administrative applicant and the education director and reject or
regulation and in 201 KAR 11:240. approve the course for credit under this section.
(4) (a) The application and all required attachments shall be (b) The commission shall notify the applicant of its decision
submitted to the commission for consideration at its next in writing.
regularly-scheduled meeting, which is posted on the Section 4. An approved real estate school shall not:
commission’s Web site after calendar approval. (1) Advertise in conjunction with the business of a broker or a
(b) The provider shall be notified in writing of the brokerage firm; or
commission’s approval or denial of the course for (2) Discuss, induce, or promote affiliation with a broker or
academic credit. brokerage firm.
Section 3. Each real estate pre-license course completed at an out- Section 5.
of-state accredited institution, for which credit may be granted (1) An approved real estate school shall maintain accurate and
under this section shall be approved or rejected pursuant to the permanent records on each student enrolled in a course.
subsections (1) through (9) of this section: (a) A permanent record shall include each student's record
(1) A course description from the school catalog, course syllabus, of courses completed or attempted, academic hours
table of contents from text used in the course, or other awarded, and final grades.
summary of the course shall be provided to the commission (b) A certificate of completion shall be:
by the applicant; 1. Included in the permanent records of each student;
(2) The commission education director shall review the material and
submitted by the applicant and recommend the commission 2. Mailed to each student upon completion of a course.
either grant or reject credit under this section at the (2) Records shall:
commission’s regular monthly meeting; (a) Be maintained for three (3) years; and
(3) The commission education director shall record: (b) Include student attendance records, final grade, and test
(a) The name of the course; scores.
(b) If approval was granted or rejected; and (3) An approved real estate school shall notify the commission, in
(c) The date of approval or rejection. writing, within five (5) days of the beginning of a pre-license
(4) If a course has been previously approved by the commission course. Notice shall include the name of course, class location
under this section or if a course is substantially similar to a scheduled dates and times the class will be offered.
previously-approved course, the commission education (4) Schools and instructors shall take appropriate steps to
director shall be authorized to determine course approval. maintain the confidentiality of the final examinations at all
(5) In determining whether a course is substantially similar to a times. These steps shall include:
previously-approved course, one (1) or more of the following (a) Maintaining examinations and answer keys in a secure
items shall be considered: place accessible only to the school administrator and the
(a) The table of contents from text used in the course; instructor;
(b) The course syllabus; (b) Prohibiting students from retaining copies of the final
(c) Course description from the school catalog; or examination and answer sheets; and
(d) Other summary of the course. (c) Monitoring students at all times when examinations are
(6) The commission’s education director shall notify an applicant being conducted.
if a course is rejected for credit under this section; Section 6.
(7) (a) If an applicant disagrees with the education director’s (1) An approved real estate school shall permit an inspection and
decision under this section, he or she shall, within ten monitoring by the commission or its designee to evaluate an
(10) days from the date of the education director’s aspect of the administration or operation of the school or to
notification of rejection, file with the commission a evaluate the performance of the instructor.
written request for a commission review of its education (2) Monitoring may include a periodic mailing by the
director’s decision. commission to students seeking an evaluation of his or her
(b) The request shall specifically indicate the applicant’s pre-license course and instructor.
disagreement. Section 7.
(c) Failure to indicate disagreement within the ten (10) day (1) Private school approval may be withdrawn if the commission
period shall constitute waiver by the applicant and the determines that:
education director’s decision shall become final; (a) Information contained on the application or renewal is
(8) (a) In addition to notifying the education director of inaccurate or misleading;
disagreement with his or her decision, the applicant shall (b) The establishment or conduct of the school is not in
provide a written summary to the education director compliance with this administrative regulation or the
detailing why credit under this section is merited. instruction is so deficient as to impair the value of the
(b) The commission education director shall forward this course; or
summary to the commission along with his or her (c) The school is not certified by the Kentucky Commission
response to the commission for a final decision at the on Proprietary Education.
commission’s regular monthly meeting.
19
(2) If the commission has notice that a school’s approval may be (1) A violation of a provision of KRS Chapter 324 or 201 KAR
subject to withdrawal for the reasons set forth in subsection Chapter 11;
(1) of this section, the commission shall: (2) Falsification of material submitted to the commission to
(a) Give written notice to the school of the intent to become an approved instructor;
withdraw approval and the reasons therefor; (3) Failure to provide to the commission requested material;
(b) Give the school an opportunity to address the notice, in (4) While acting as an instructor in an educational facility,
writing, within thirty (30) days of the date of the notice engaging in brokerage activity with an enrolled student;
of intent to withdraw approval; and (5) Soliciting an investment from a student; or
(c) Review the issues and the school’s response, and the (6) Attempting to recruit a student to a real estate company while
commission may withdraw approval of the school. acting as an instructor.
Section 8. An effort made directly or indirectly by a school, Section 3.
official or employee, or a person on their behalf to reconstruct the (1) An approved instructor may teach:
real estate licensing examination or portion of the examination (a) A pre-licensure course offered by an:
shall result in immediate revocation of school approval. 1. Approved real estate school; or
Section 9. Incorporation by Reference. 2. Accredited real estate school which receives
(1) The following material is incorporated by reference: funding under the real estate education, research
(a) "Instructor Application – Form E100”, 05/15 edition, and recovery fund;
Kentucky Real Estate Commission; (b) A mandatory continuing education course; or
(b) “Education Course Application”, Form E102, 5/15; (c) A post-license education course.
(c) “Provider Application – Form E101”, 05/15 edition, (2) A person who is not an approved instructor shall not teach a
Kentucky Real Estate Commission; course listed in subsection (1) of this section.
(c) “Course Outline – Form E105”, 05/15 edition, Kentucky Section 4. Incorporation by Reference.
Real Estate Commission; and (1) The following material is incorporated by reference:
(e) “Pre-license Prescribed Topics – Form E112”, 05/15 (a) "Instructor Application – Form E100", 05/15 edition,
edition, Kentucky Real Estate Commission. Kentucky Real Estate Commission; and
(2) This material may be inspected, copied, or obtained, subject (b) "Course Outline – Form E105", 05/15 edition, Kentucky
to applicable copyright law, at the Kentucky Real Estate Real Estate Commission.
Commission, 10200 Linn Station Road, Suite 201, Louisville, (2) This material may be inspected, copied, or obtained at the
Kentucky 40223, Monday through Friday, 8 a.m. to 4:30 p.m. Kentucky Real Estate Commission, 10200 Linn Station Road,
Suite 201, Louisville, Kentucky 40223, Monday through
201 KAR 11:175. Instructor approval procedures and Friday, 8 a.m. to 4:30 p.m.
guidelines
RELATES TO: KRS 324.010(7) 201 KAR 11:180. Promotion of out-of-state property,
Section 1. To apply for certification as an instructor at an approved restrictions and prerequisites
real estate school, an instructor shall: RELATES TO: KRS 324.020(6), 324.142
(1) Submit a: Section 1. Definitions.
(a) Completed Instructor Application – Form E100; (1) “Promotional activities” means every solicitation or attempt
(b) Copy of a current resume; to bring about the sale, exchange, lease, assignment, license
(c) Copy of legal documentation required to support an or award with regard to an interest in real estate.
answer on the Instructor Application – Form E100, if (a) A time-share estate, wherein a freehold estate or an
applicable; and estate for years is conveyed;
(d) Completed Course Outline – Form E105 for each course; (b) A vacation lease, wherein a buyer purchases the right to
(2) Have: occupy a specific accommodation for a specified time
(a) A bachelor’s, masters or doctorate degree from a college period over a specified number of years;
or university duly accredited by a nationally recognized (c) A vacation license or club membership, wherein a buyer
rating or accrediting organization, in a field directly acquires the right to occupy an undesignated unit at
related to the nature of the course, such as real estate, certain real property(ies) during a specific time each year
business, law, finance, or education; for a specific number of years;
(b) An associate degree in real estate from a college or (d) Variations of the above that result in the acquisition of
university duly accredited by a nationally recognized the right to use real property for a limited period of time
rating or accrediting organization; in recurring intervals for a number of years.
(c) Completed five (5) consecutive years full-time (2) “Time-share” mean s an arrangement under which one may
experience in the real estate related subject area that he is acquire, for a period of time, the right to use and occupy
teaching (averaging at least twenty (20) hours per week property, for a recurring block of time. A time-share may be:
for each of the five (5) years); or (a) A time-share estate, wherein a freehold estate or an estate
(d) A combination of teaching, education, and full-time for years is conveyed;
experience in real estate totaling five (5) years (b) A vacation lease, wherein the buyer purchases the right
(averaging at least twenty (20) hours per week for each to occupy a specific accommodation for a specified time
year of experience); and period over a specified number of years;
(3) Possess: (c) A vacation license or club membership, wherein a buyer
(a) A thorough familiarity of the provisions of KRS Chapter acquires the right to occupy an undesignated unit at a
324 and the effect of those provisions on the subject area certain real property(ies) during a specific time each year
of the course; and for a specific number of years; or
(b) A thorough knowledge of the subject area of the course (d) Variations of the above that result in the acquisition of
he is teaching. the right to use real property for a limited period of time
Section 2. Approval of an instructor shall be withdrawn by the in recurring intervals for a number of years.
commission for:
20
Section 2. To obtain commission approval for engaging in
promotional activities in the Commonwealth for property located "You may cancel this contract without any penalty or
outside of the Commonwealth, each applicant shall file with the obligation within three (3) business days from the above date.
commission the applicable documents set forth below: If you cancel, any payments made by you under the contract
(1) “Registration of out-of-state properties and time share” form and any negotiable instrument executed by you will be
setting forth pertinent date pertaining to: legal description of returned within ten (10) business days following receipt by
property, name(s) of developers, owners and persons involved the seller of your cancellation notice, and any security interest
in promotional activities, type of offering, form of ownership arising out of the transaction will be cancelled.
of property, encumbrance(s) on property, current and
anticipated improvements, taxes and assessments, facilities If you decide to cancel this contract, you must notify the seller
and services offered or to be offered in the future, and in writing of your intent to cancel. Your notice of cancellation
description of promotional activities to be conducted in shall be effective upon the date sent and shall be sent to:
Kentucky. Name of seller at:
(2) (a) If a corporation, submits a copy of the Articles of Address of seller:
Incorporation with all amendments thereto and a current NO PURCHASER SHOULD RELY UPON REPRESENTA-
list of the names and addresses of officers and directors TIONS OTHER THAN THOSE INCLUDED IN THIS
with their principal occupation at the current time, CONTRACT."
(b) Out-of-state corporations must also submit "certificate of
authority" issued by the office of the Secretary of State (4) That if no interest in real property is being conveyed,
of the Commonwealth of Kentucky. contracts shall also contain the following statements in
(3) If a partnership or association, submits a copy of Articles of underlined, bold face type of a minimum size of ten (10)
Partnership or other organizational documents. points: "You may also cancel this contract at any time after
(4) “Consent to Service of Process” form. the accommodations or facilities are no longer available as
(5) Copies of all sales contracts, agreements, option forms, lease provided in this contract."
forms, and the prospectus currently used for the property. Section 5.
(6) “Consent to Inspect” form, for commission to inspect the real (1) Violation of any of the requirements of this administrative
estate being promoted and to inspect and copy books and regulation or failure to comply with the provision of the
reports of the owner and/or developer at the cost of the notice of cancellation by a licensee shall constitute a violation
applicant. of KRS 324.160(4)(u) of this administrative regulation.
Section 3. Exemptions. The registration required under Section 2 (2) Pursuant to KRS 324.142, commission approval is required
of this administrative regulation shall not apply to: for a licensee to promote out-of-state property and time-
(1) The making of any offer or disposition of any out-of-state shares, even if exempted from other registration requirements
property: under Section 3 of this administrative regulation. Violation of
(a) By an owner in a single or isolated transaction; any of the requirements of this administrative regulation or
(b) By any government or government agency; or failure to comply with the provision of the notice of
(c) By court order. cancellation by an owner/developer shall result in either
(2) Any applicant that has been granted an exemption by the revocation or denial of approval, whichever is applicable, and
Kentucky Real Estate Commission on the grounds that their may be enforced by injunctive action under KRS 324.020(6).
promotional activities involve property of a small amount or Section 6. Incorporation by Reference.
of such a limited character that the public interest and (1) The following material is incorporated by reference:
protection of purchasers is deemed unnecessary with regard to (a) “Registration of Out-of-State Properties and Time Shares”
said offerings. (1985);
(3) Any applicant who has registered under the Federal Interstate (b) “Consent to Service of Process” (1985);
Land Sales Full Disclosure Act shall be exempt from the (c) “Consent to Inspect” (1985); and
registration requirements contained in Section 2 of this (d) “Affidavit of Timeshare Developer” (1985).
administrative regulation, upon the filing with the commission (2) This material may be inspected, copied, or obtained, subject to
of a copy of an effective statement of record filed with the applicable copyright law, at the Kentucky Real Estate
Secretary of Housing and Urban Development. Commission, 10200 Linn Station Road, Suite 201, Louisville,
Section 4. Sellers of time-share plans in Kentucky regardless of Kentucky 40223, Monday – Friday, 8 a.m. to 4:30 p.m.
location of property shall verify, on the “Affidavit of Timeshare
Developer” form: 201 KAR 11:190. Rules of practice and procedure before
(1) That each purchaser shall receive a fully completed copy of the Kentucky Real Estate Commission
any contracts pertaining to the sale which includes the date of RELATES TO: KRS 324.150, 324.151, 324.160, 324.170, 324.200,
execution of contract, financial obligations of purchaser 324.281(5)
(including initial purchase price and any additional charges to Section 1. Complaint Review and Investigation.
which purchaser may be subject), estimated date of (1) An aggrieved party shall file a Sworn Statement of Complaint
availability of accommodation or facility which is not against a licensed real estate sales associate or broker. The
completed at time of contract, and a description of the nature complaint shall:
and duration of the time-share being sold. (a) Allege a prima facie case of specific violation of KRS
(2) That each purchaser shall be informed orally at the time he or 324.160 in accordance with KRS 324.151;
she signs a contract of the purchaser's right to rescission, (b) State the basis of the complaint fully and concisely,
which shall be substantially similar to that set forth in including the name of the broker or principal broker;
subsection (3) of this section. (c) Be notarized by a notary public;
(3) That all sales contracts utilized in the promotion and sale of (d) Include a completed damages claimed form, with a copy
said time-share plans shall include in underlined, bold face of each receipt, estimate, or other evidence of damages
type of a minimum size of ten (10) points substantially the attached to the report; and
following statement: (e) Be filed within two (2) years from:
21
 1. Actual knowledge of the cause of action; or Commission, 10200 Linn Station Road, Suite 201, Louisville,
2. The time circumstances would reasonably have put Kentucky 40223, Monday through Friday, 8 a.m. to 4:30 p.m.
the aggrieved party on notice of the cause of action.
(2) If the commission staff review determines the Sworn 201 KAR 11:195 Informal settlement procedures
Statement of Complaint does not allege a prima facie case of RELATES TO: KRS 324.160, KRS 324.170, KRS 324.281
a specific violation of KRS 324.160, the aggrieved party shall Section 1. Settlement by Informal Proceedings. After ordering a
file a Sworn Supplement to Complaint in accordance with hearing, the commission, through its legal counsel, may enter into
KRS 324.151. informal settlement proceedings with the licensee for the purpose
(3) A respondent shall file a Sworn Answer to Complaint if a of expeditiously resolving any disciplinary matter pursuant to KRS
complaint is filed against him in accordance with the 324.160.
requirements of KRS 324.151(3). The answer shall: (1) (a) The commission may approve or reject any settlement
(a) Identify the respondent; proposal.
(b) State his responses to the complaint; (b) Any matter to which a licensee and the commission's
(c) Be notarized by a notary public; and legal counsel have stipulated that is rejected by the
(d) Include a copy of the following documents: commission shall not thereafter bind the parties or the
1. Listing contract; commission.
2. Purchase contract; (2) The board may employ mediation as a method of resolving
3. Seller's disclosure form; the matter informally.
4. Agency disclosure form; and (3) All proposed agreed orders shall be signed by the licensee and
5. Settlement statement. shall advise the licensee that by entering into an agreed order,
(4) Upon completion of an investigation following the the licensee expressly acknowledges that the licensee is fully
submission of a complaint and answer, the commission shall: and completely informed of the due process rights afforded to
(a) 1. Dismiss the case without an administrative hearing the licensee under KRS Chapter 324 and KRS Chapter 13B
if the facts or evidence do not indicate a prima facie and that the licensee knowingly, willingly, and voluntarily
case for a violation of KRS Chapter 324; or agrees to waive those rights and enter into an agreed order.
2. Schedule an administrative hearing pursuant to KRS
Chapter 13B, 324.151, and 324.170; and
201 KAR 11:210. Licensing, education, and testing
(b) Notify the complainant and respondent of its decision in
writing. The notification shall include a brief statement
requirements
RELATES TO: KRS 324.010, 324.040, 324.045(1), (2), (3), 324.046
explaining the commission's reasons for the decision.
Section 1. In lieu of proof of high school graduation or a GED
Section 2. Motions.
diploma, an applicant may submit an official transcript from a
(1) A request for the commission or a hearing officer to take or
United States institution, or from an institution outside of the United
refrain from taking an action shall be made by an oral or
States, which indicates successful post-secondary completion of
written motion.
(1) A degree program; or
(2) A motion shall state the basis for the motion, including a
(2) Twenty-eight (28) academic semester hours of the equivalent.
citation to or description of the legal authority in support of
Section 2.
the requested action, if applicable.
(1) If an applicant submits documentation qualifying education in
(3) A party shall be given an opportunity to respond to a motion.
a language other than English, the diploma or transcript shall:
Section 3. Withdrawal of a Complaint. A complainant may
(a) Be accurately translated; and
withdraw a complaint if:
(b) Include a certification stating that the translation is true,
(1) (a) An answer has not been filed in accordance with KRS
accurate, and complete.
324.151; and
(2) The applicant shall provide a letter to the commission
(b) The withdrawal is made within twenty (20) days of the
indicating that the curriculum of the proffered education is
date the complaint was filed; or
equivalent to a high school diploma or GED. The comparison
(2) (a) There is good cause for the withdrawal; and
shall be made by an education credential service provider
(b) The commission approves the withdrawal.
with membership in the National Association of Credential
Section 4. Consolidation and Severance.
Evaluation Services:
(1) A hearing officer may consolidate cases assigned to his
(3) If the applicant is unable to comply with the requirements of
docket upon a finding by the hearing officer that:
this section, the applicant shall submit proof of the receipt of a
(a) There are:
GED granted by an agency or institution within the United
1. Common questions of law or fact; or
States.
2. Identical issues or witnesses; and
Section 3. An applicant who successfully passes the real estate
(b) Consolidation is appropriate.
examination shall apply for a license within sixty (60) days after
(2) A hearing officer may sever consolidated cases or claims in
the examination. A candidate who fails to apply for a license
an administrative action upon a finding that the requirements
within this period shall be reexamined.
for consolidation established in subsection (1) of this section
are not met.
Section 5. Incorporation by Reference. 201 KAR 11:215 License Recognition; application
(1) The following material is incorporated by reference: requirements
(a) "Sworn Statement of Complaint" 3/01 edition, Kentucky RELATES TO: KRS 324.141, KRS 324.281(5)(7)
Real Estate Commission; Section 1. Definitions.
(b) "Sworn Answer to Complaint", 7/98 edition, Kentucky (1) "License recognition" means a licensing process that:
Real Estate Commission; and (a) Replaces reciprocal agreements; and
(c) "Sworn Supplement to Complaint", 10/00 edition, (b) May be used to obtain a Kentucky license by an
Kentucky Real Estate Commission. individual who holds an active and unrestricted out-of-
(2) This material may be inspected, copied, or obtained, subject state sales associate’s or broker’s license, or the
to applicable copyright law, at the Kentucky Real Estate equivalent of either.
22
(2) "Unrestricted license" means a license that is not under any (b) Forty-one (41) or more licensees shall carry a $2,000,000
order of limitation or discipline by another jurisdiction’s annual aggregate.
regulatory body. (3) The maximum deductibles, which may be separate
Section 2. deductibles, shall not exceed $2,500 for judgment or
(1) An individual who is actively engaged, outside Kentucky, in settlement and $1,000 for the cost of investigation and
real estate brokerage activities as a sales associate or broker, defense.
or the equivalent of either, may apply for a Kentucky license (4) Coverage shall apply for any covered claim resulting from a
that is the same as, or equivalent to, the individual’s out-of- licensed activity that occurred subsequent to April 1, 1987
state license, if the individual’s out-of-state license is active unless such claim had been made against the licensee before
and unrestricted. the present insurance policy's inception or is insured by a
(2) To obtain a license by recognition, an individual shall: previous insurance policy.
(a) File with the commission a criminal background check in Section 4. Except as provided in Section 5 of this administrative
accordance with KRS 324.045(5)(a) and (b) and 201 regulation, coverage shall not exclude claims brought against the
KAR 11:430; insureds arising out of an act or failure to act by the insured
(b) File with the commission a certification of licensure licensee when performing a professional service for which a
issued by the regulatory authority of each state in which license is required by the Commonwealth of Kentucky under KRS
the individual has, at anytime, held a real estate license, 324.020.
in accordance with KRS 324.141(2); Section 5. Coverage may exclude claims brought against the
(c) Pass the state law portion of the licensing examination insureds, regardless of whether the professional service involves an
for either a sales associate’s license or a broker’s license, activity for which a license is required by the Commonwealth of
whichever is applicable and is the equivalent of the Kentucky:
individual’s active out-of-state license when filing his or (1) Arising out of a dishonest, fraudulent, criminal or malicious
her application with the commission; and act, error, or omission, if committed by, at the direction of, or
(d) Apply for a Kentucky license within sixty (60) days of with the knowledge of the insured;
completion of the licensing examination. An applicant (2) Arising as a result of the insolvency of the insured;
who fails to apply for a Kentucky license within the sixty (3) Brought about or contributed to by any inability or failure to
(60) day period shall retake the examination. pay or collect premium, escrow, or tax money;
Section 3. A licensee who has obtained a Kentucky license by (4) Brought about by any employee, or former employee arising
recognition shall comply with the provisions of KRS Chapter 324 out of the contract of employment with the insured and
and 201 KAR Chapter 11. alleging breach thereof;
(5) Arising out of any injury or damage which the insured either
201 KAR 11:220. Errors and omissions insurance expected or intended;
requirements (6) Brought about by bodily injury, sickness, disease or death of
RELATES TO: KRS 324.010, KRS 324.020, KRS 324.395 any person or physical injury to or destruction of or loss of
Section 1. use of tangible property;
(1) An insurance company providing real estate errors and (7) Arising out of libel, slander, defamation of character, false
omissions insurance for real estate licensees must provide a arrest or imprisonment, wrongful entry or eviction or other
signed certification to the insured licensee which shall invasion of the right of private occupancy, publications or
confirm that the obligations of the insurance company meet utterances in violation of an individual's right of privacy, or
the minimum requirements set forth in this administrative malicious prosecution;
regulation\ (8) Arising out of services performed by the insured which are
(2) A licensee who chooses to be insured by other than the group subject to the Employee Retirement Income Security Act of
insurance policy obtained by the Commission shall file the 1974, 29 U.S.C. 1001, as amended;
private carrier certification of coverage with the license (9) Arising out of any violation of the Securities Act of 1933, 15
renewal application in accordance with KRS 324.395(6). U.S.C. 77a, as amended or the Securities Exchange Act of
This certification shall be available on the Commission’s Web 1934, 15 U.S.C. 78a, as amended or any state blue sky or
site, www.krec.ky.gov, and shall be included in the yearly securities law or similar state or federal statutes;
renewal package mailed to all principal brokers. (10) Arising out of the conversion, misappropriation,
Section 2. The insurance for which the certification has been commingling, or defalcation of funds or other property;
executed shall not be terminated, cancelled, lapsed, or nonrenewed (11) Brought against a real estate property manager for failure to
unless the insurance company has provided the Commission with effect or maintain adequate levels or types of insurance;
prior written notice. (12) Arising out of unlawful discrimination;
Section 3. The minimum requirements for the coverage contained (13) Arising out of liability assumed by the insured under any
in the insurance policy for which the certification has been indemnity, hold harmless or similar provisions or agreements,
executed shall provide that: but this exclusion does not apply to liability the insured would
(1) Coverage shall be that known as real estate agents errors and have in the absence of these agreements;
omissions insurance or real estate agents professional liability (14) (a) Arising
insurance. 1. Out of the insured's business; and
(2) The limit of liability shall not be less than $100,000 for any 2. By or on behalf of an investor, shareholder, or
one (1) claim, excluding the cost of investigation and defense, partner in any corporation, limited or general
nor less than $1,000,000 annual aggregate limit of liability, partnership, real estate trust, or venture in which the
excluding the cost of investigation and defense. A principal insured has; or had; a participating interest, directly
broker who decides to purchase independent errors and or indirectly, in the profits or losses; or
omissions “firm coverage” insurance shall have the following (b) In connection with the insured's activities as an
aggregate amounts: underwriter, sponsor, partner, joint or coventurer, or
(a) One (1) to forty (40) licensees shall carry a $1,000,000 member in any real estate partnership, venture or
annual aggregate; or syndicate;
23
(15) Arising out of, relating to, or based upon the dispersal, branch office name by promptly completing, signing, and filing with
discharge, escape, release, or saturation of smoke, vapors, the commission the “Request to Change Firm Name – Firm Address
soot, fumes, acids, alkalis, toxic chemicals, liquids, gases or – Branch Address” form. This form shall be accompanied by the
other material, irritant, contaminant or pollutants. Pollutants change request fee required by KRS 324.287(6). The fee shall be ten
shall include any solid, liquid, gaseous, thermal, biological or (10) dollars.
radioactive substance, material, matter, toxin, irritant or Section 5. Incorporation by Reference.
contaminant, including radon, asbestos, chemicals and waste. (1) The following material is incorporated by reference:
Waste shall include materials to be recycled, reconditioned, or (a) “Licensee Name Change”, August 2011;
reclaimed; (b) “Change of Residential/E-Mail Address”, August 2011
(16) Excluded by the Nuclear Energy Liability Exclusion (c) “Consent to Service of Jurisdiction”, April 2011; and
Endorsement (broad form) filed by the Insurance Services (d) “Request to Change Firm Name – Firm Address –
Office, Inc. with the Kentucky Department of Insurance and Branch Address”, August 2011
identified as form #IL 00 21 11 85. (2) This material may be inspected, copied, or obtained, subject
(17) (a) Arising from the sale or property management of to applicable copyright law, at the Kentucky Real Estate
property developed, constructed, or owned by: Commission, 10200 Linn Station Road, Suite 201, Louisville,
1. The insured: Kentucky 40223, Monday through Friday, 8 a.m. to 4:30 p.m.
2. Any firm or corporation in which the insured has a This material is also available from the commission’s Web
financial interest: site: www.krec.ky.gov (38 Ky.R. 1670; Am. 1835; eff. 6-1-
3. Any firm coming under the same financial control 2012.)
as the insured.
(b) This exclusion does not apply and coverage shall be 201 KAR 11:230. Continuing education requirements
extended to claims arising from the sale of real property, RELATES TO: KRS 324.010(7), (8), 324.046(5), 324.085(1),
if all three (3) of the following conditions are met: (2), 324.090, 324.160(1)(c), 324.160(4)(u), 324.281(7),
1. The property was acquired by the insured under a 324.287, 324.310
guaranteed sale listing contract;
Section 1. Definition. "Continuing education course" means a
2. The title to the property was only temporarily held
course approved pursuant to the requirements set forth in KRS
by the insured during the transit period, not to
324.085(1) and this administrative regulation.
exceed one (1) year, from acquisition to resale; and
Section 2. Mandatory Continuing Education.
3. The property is listed for sale during the entire
(1) An active licensee, licensed by the commission on or after
transit period; or
June 19, 1976, shall meet the requirements of KRS
(18) Arising out of the interests, operations, or activities of the
324.085(1) by attending and successfully completing six (6)
insured as a mortgage banker or correspondent, escrow agent,
hours of continuing education courses that are sponsored or
construction manager, or property developer (an insured will
approved by the commission by December 31 of each
not be considered engaging in the activities of an escrow
calendar year.
agent merely because the insured holds earnest money
(a) An active licensee shall receive continuing education
deposits, rental deposits, or similar items).
credit for any approved course taken, if he or she files
with the commission a certificate of completion for each
201 KAR 11:225. License renewal – annual requirements course for which credit is sought by December 31 of
and change request procedures each calendar year.
RELATES TO: KRS 324.090, 324.287(6), 324.330 (b) These courses may be offered in one (1) to six (6) hour
Section 1. A renewed license shall be valid from April 1 to March increments.
31, annually, and shall be canceled by the commission if not (c) An active license shall not be renewed unless the
renewed by March 31 of each year. licensee has complied with the provisions of this
Section 2. Licensee Name Changes. A licensee shall notify the administrative regulation.
commission of his or her legal name change by promptly (2) An active licensee shall attend a commission-approved core
completing, signing, and filing with the commission the “Licensee course once every four (4) years, with the first four (4) year
Name Change” form. This form shall be accompanied by the cycle beginning from the date of initial licensure. The core
change request fee required by KRS 324.287(6). The fee shall be ten course shall:
(10) dollars. (a) Satisfy the licensee's mandatory continuing education
Section 3. Licensee Residence Changes, E-mail Addresses, and requirement for the year in which the course is taken;
Telephone Numbers. and
(1) A licensee shall notify the commission of a change of his or her (b) Be a six (6) hour comprehensive review of the
residence address by completing, signing, and filing with the requirements of:
commission the “Change of Residential/E-mail Address” form, 1. KRS Chapter 324;
within ten (10) day from the date of the change. 2. 201 KAR Chapter 11;
(2) During the commission’s annual online renewal process, a 3. Common and federal law relating to real estate; and
licensee shall provide his or her direct telephone number and 4. The standards of practice for a real estate licensee.
electronic mail address, if applicable. A licensee shall promptly (3) Continuing education hours exceeding the amount required
report any changes to this information by completing, signing, shall not be carried forward to the next year's requirements or
and filing with the commission the “Change of Residential/E- used to reactivate a license in the next calendar year.
mail Address” form. (4) (a) An hour of instruction in a pre-license real estate
(3) The “Change of residential/E-mail Address” form shall be education course, unless it is the licensee’s year to
accompanied by a completed and signed “Consent to Service of complete the core course, shall be credited to the
Jurisdiction,” if applicable. mandatory continuing education requirements for the
Section 4. Change of principal business location, firm name, or calendar year in which the course is taken and
branch name. A principal broker shall notify the commission of any completed.
change of his or her principal business location, firm name, or
24
 (b) The licensee shall submit a transcript or course the year in which continuing education requirements
completion certificate for the pre-license course in order were not fulfilled.
to receive credit toward the continuing education (2) (a) If a licensee fails to comply with the provisions of this
requirements for that calendar year. administrative regulation, the executive director or his
Section 3. Exemptions from the Mandatory Continuing Education representative shall notify the licensee as soon as
Requirement. practical on or after January 10 of the next calendar year
(1) The provisions of this administrative regulation shall not of the failure to comply.
apply to any person licensed by the commission prior to June (b) If the licensee fulfilled the continuing education
19, 1976. requirements in the previous year, proof of completion
(2) A license recognition broker shall not be required to attend a shall be forwarded to the commission on or before
continuing education course during the first calendar year in February 10.
which he or she is first licensed in Kentucky. (3) A license shall not be cancelled for nonfulfillment of the
(3) A licensee shall not be required to attend a continuing continuing education requirements if, by February 10, the
education course during the first two (2) calendar years from licensee enters into a written delinquency plan, pays a $500
the date of issuance of an initial sales associate license. fine, and either:
(4) (a) An escrowed licensee shall not be required to attend (a) Places the license in escrow; or
continuing education courses while the license remains (b) Agrees in the delinquency plan to complete the
in escrow. delinquent continuing education requirements for the
(b) Before a license is changed from escrow to active status, previous calendar year on or before June 15.
a licensee shall provide the commission with (4) A licensee who places his or her license in escrow under the
documentation of the completion of the current calendar provisions of this section shall not reactivate the license until
year's education requirements. he or she has:
(c) If the licensee has not completed the core course in the (a) First completed the core course or the current year's
previous four (4) years as required, the core course shall mandatory continuing education requirements as
become the current calendar year's continuing education established in Section 2(2) of this administrative
requirement for a license changing from escrow to regulation; and
active. (b) Satisfied the requirements of KRS 324.310.
Section 4. Out-Of-State Continuing Education Requirements. A (5) A licensee who fails to place his or her license in escrow or
licensee who attends continuing education in another jurisdiction file the delinquency plan on or before February 10
within the United States, its territories, and possessions may immediately following the year in which continuing education
receive approval for completed continuing education courses if: requirements were not fulfilled, shall automatically have the
(1) The real estate regulatory agency of the state where the course license cancelled as of that date and shall not be eligible to
is held approved the course for real estate continuing renew.
education credit; (6) If a licensee fails to complete the requirements of the
(2) The focus of the course is not on the specific real estate laws delinquency plan:
of another state; (a) The commission shall notify the licensee of the
(3) The course is taken and completed during the calendar year deficiency on or after July 1;
for which continuing education credit is sought in Kentucky; (b) The deficiency notice shall advise that the licensee may
(4) The course enables the licensee to better understand the real request a hearing for the commission to consider if the
estate brokerage business and meets the content criteria license should be suspended for noncompliance with the
prescribed by the commission; delinquency plan; and
(5) The licensee submits proof of completion of the out-of-state (c) Any suspension ordered by the commission for
course to the Kentucky Real Estate Commission through noncompliance with the continuing education
electronic or paper verification issued by the provider, and a delinquency plan shall be for a period of six (6) months.
completed Out of State Continuing Education Compliance (7) Failure to request a hearing shall result in a default order of
Form – Form E111; suspension.
(6) The provider’s course verification, the Out-of-State (8) If the commission suspends the license as a result of a default
Continuing Education Compliance form – Form E111, and order or after hearing, the licensee shall not be allowed to
other requested forms are provided to the commission for activate the license unless, within ninety (90) days following
review by December 31 of the calendar year for which the expiration of the suspension, the licensee:
licensee is seeking credit; and (a) First completes the current year’s continuing education
(7) After review of the materials submitted, the commission requirements;
determines, pursuant to subsections (1) through (4) of this (b) Submits the required documents to reinstate the license;
section, that the course complies with continuing education and
credit requirements. (c) Pays all necessary renewal and transfer fees as required
Section 5. The commission shall notify the licensee of this denial by KRS 324.287.
and a brief explanation of the reasons for denial. (9) If the licensee does not reinstate the license within ninety (90)
Section 6. Compliance and Delinquency. days following the completion of the suspension period, the
(1) The time requirements established in this administrative license shall be cancelled and the licensee shall meet the
regulation shall be extended by the commission if: requirements for initial licensure, including retaking the
(a) A true hardship or other good cause, such as extensive examination.
medical issues for the licensee or the licensee’s Section 7. Incorporation by Reference.
immediate relative or if the licensee convenes active (1) "Out-of-State Continuing Education Compliance Form –
military duty, clearly warrants relief; and Form E111", 05/15 edition, is incorporated by reference.
(b) The request for extension and any required (2) This material may be inspected, copied, or obtained, subject
documentation is received in writing on or before to applicable copyright law, at the Kentucky Real Estate
February 10 of the calendar year immediately following
25
 Commission, 10200 Linn Station Road, Suite 201, Louisville, (5) A course and instructor that have been previously approved
Kentucky 40223, Monday through Friday, 8 a.m. to 4:30 p.m. within the calendar year may be conducted by another
provider, upon the submission of an Education Course
201 KAR 11:232 Continuing education provider requirements Application Form - E102 and approval by the commission
RELATES TO: KRS 324.010(7)(8), 324.046(5), 324.085(1)(2), staff.
324.090, 324.160(1)(c),(4)(u), 324.281(7) (6) A provider shall:
Section 1. Continuing Education Course Criteria. (a) At least thirty (30) days prior to the scheduling of a
(1) One (1) hour of continuing education shall be allowed for continuing education course, submit to the commission
each fifty (50) minutes of actual instruction. an Education Schedule - Form E106;
(2) To receive approval, each course shall: (b) Give to each attendee listed on the roster an Education
(a) Be in hourly increments from one (1) to six (6) hours; Completion Certificate - Form E110;
(b) Be real estate specific; and (c) Within ten (10) days of a continuing education course,
(c) Consist of topics that shall: submit to the commission:
1. Increase the student’s knowledge of real estate laws 1. An education attendance roster;
and the brokerage business; and 2. A Course Evaluation - Form E108 completed by
2. Serve the public. each attendee listed on the roster; and
(3) A course that is solely motivational or considered to be 3. A Course Evaluation Transmittal - Form E109;
personal development in nature shall not be approved. (d) Permit monitoring of the courses and inspection of the
(4) All course approvals shall expire on December 31 of each records by the commission; and
calendar year. (e) Make the course available to all licensed agents, subject
(5) All primary or secondary providers wishing to offer online or only to space limitations.
other distance education courses shall be approved in (7) A provider’s approval to conduct continuing education
accordance with the provisions set forth in 201 KAR 11:240. courses shall be withdrawn by the commission for:
The commission shall review and approve the content to (a) A violation of the KREC Guidelines for Classroom
ensure that it meets the requirements outlined in 201 KAR Management - Form E103;
11:240. (b) Falsification of attendance information submitted to the
Section 2. Continuing Education Course Provider Requirements. commission;
(1) An education course shall be sponsored by: (c) Allowing an instructor to solicit business or sell
(a) An accredited institution; materials to students in the classroom;
(b) A school that has been given a license from the (d) Failure to provide the commission the required materials
Kentucky Commission on Proprietary Education; in accordance with this administrative regulation; or
(c) An appropriate governmental regulatory body; or (e) Conducting a course not approved prior to being offered.
(d) An approved real estate school as defined by KRS Section 3. Instructor Requirements.
324.010(7)(b). (1) A course instructor shall:
(2) To apply for approval of a continuing education course, a (a) Pursuant to 201 KAR 11:175, have adequate education,
provider shall submit: knowledge, and experience in the topic to be presented;
(a) A completed Provider Application - Form E101, which (b) Have prior teaching experience in real estate; and
shall: (c) Be an approved instructor under the requirements
1. Include a Course Outline Form - E105, broken into established in 201 KAR 11:175.
fifteen (15) minute increments, to include learning (2) A licensee who teaches an approved continuing education
objectives for the course, teaching methods, course shall be entitled to credit on an hour-for-hour basis.
auxiliary aids, materials, and the policies of the (a) To obtain continuing education credit, the instructor's
provider; and name shall be added to the education attendance roster
2. Be signed by the sponsor's administrator to indicate for the course.
compliance with applicable law and the (b) The instructor shall not receive credit more than once in
requirements of this administrative regulation; a calendar year for teaching a specific course.
(b) A copy of the license from the Kentucky Commission on (3) A licensee who is a pre-license instructor of an approved
Proprietary Education, unless the provider is an course shall receive credit toward his or her continuing
accredited college or university, an appropriate education requirements. The instructor’s supervisor shall
government regulatory body, or an approved real estate provide the commission with a written notice requesting
school as defined by KRS 324.010(7); teaching credit that shall:
(c) An Instructor Application - Form E100 for each (a) Include:
instructor who will teach the course, as required by 201 1. The instructor’s name;
KAR 11:175; 2. The name of the course; and
(d) An Education Course Application - Form E102, along 3. The dates the course was conducted; and
with a processing fee of fifteen (15) dollars; and (b) Be signed by the approved school or institution’s
(e) A copy of all advertising or brochures advertising the authorized representative.
continuing education course. Section 4. Records Maintenance.
(3) The course provider shall agree that all instructors shall abide (1) Each continuing education provider shall maintain the
by the Generally Accepted Principles of Education - Form following records in a file for three (3) years following the
E104 as adopted by the Real Estate Educators Association end of each calendar year:
and the commission as the standard for classroom (a) A copy of the roster submitted to the commission of
performance and comply with the KREC Guidelines for licensees attending the course;
Classroom Management - Form E103. (b) A copy of the Course Evaluation Transmittal - Form
(4) The commission education director shall submit the E109;
information to the commission for approval or rejection of the (c) The sign in sheet or registration list used by the provider
course at its regularly scheduled meeting. to track attendance; and
26
 (d) Any other documentation regarding student attendance. (d) A completed Instructor Application – Form E100 for
(2) Records containing licensee information shall be destroyed by each instructor who will teach the course, as required by
the provider after the three (3) years established in subsection 201 KAR 11:175; and
(1) of this section. (e) A copy of all advertising or brochures advertising the
Section 5. Incorporation by Reference. post-license education course.
(1) The following material is incorporated by reference: (3) The course provider shall agree that all instructors shall abide
(a) "Instructor Application - Form E100", 05/15 edition; by the Generally Accepted Principles of Education – Form
(b) "Provider Application - Form E101", 05/15 edition; E104 as adopted by the Real Estate Educators Association
(c) "Education Course Application - Form E102", 09/15 and the commission as the standard for classroom
edition; performance, and comply with the KREC Guidelines for
(d) "KREC Guidelines to Classroom Management - Form Classroom Management – Form E103.
E103", 05/15 edition; (4) The commission education director shall submit the
(e) "Generally Accepted Principles of Education - Form information to the commission for approval or rejection of the
E104", as adopted by the Real Estate Educators course at its regularly scheduled meeting.
Association and the Kentucky Real Estate Commission, (5) A course and instructor that has been previously approved
05/15 edition; within the calendar year may be sponsored by another
(f) "Course Outline - Form E105", 05/15 edition; provider, upon the submission of an Education Course
(g) "Education Schedule - Form E106", 05/15 edition; Application – Form E102 and approval by the commission
(h) "Course Evaluation - Form E108", 05/15 edition; staff.
(i) "Course Evaluation Transmittal - Form E109", 05/15 (6) A provider shall:
edition; and (a) At least thirty (30) days prior to the scheduling of a post-
(j) "Education Completion Certificate - Form E110", 05/15 license education course, submit to the commission an
edition. Education Schedule – Form E106;
(2) This material may be inspected, copied, or obtained, subject (b) Give each attendee who completes the course an
to applicable copyright law, at the Kentucky Real Estate Education Completion Certificate – Form E110;
Commission, 10200 Linn Station Road, Suite 201, Louisville, (c) Within ten (10) days of conclusion of a post-license
Kentucky 40223, Monday through Friday, 8 a.m. to 4:30 p.m. education course, submit to the commission a completed:
1. Roster that lists all attendees that completed the
201 KAR 11:235 Post-license education requirements course;
RELATES TO: KRS 324.010, 324.046, 324.090, 324.160 2. Course Evaluation – Form E108 completed by each
Section 1. Definitions. attendee listed on the roster; and
(1) "Broker-affiliated training program" means one (1) or more 3. Course Evaluation Transmittal – Form E109; and
post-license education course offered for post-license (d) Permit unannounced monitoring of the courses and
educational credit provided or sponsored by a licensed real inspection of the records by the commission.
estate principal broker. (7) A provider’s approval to conduct a post-license education
(2) "Initial sales associate license" means the original Kentucky course shall be withdrawn by the commission for:
sales associate license issued by the commission. (a) A violation of the KREC Guidelines for Classroom
Section 2. Post-license Education Course Provider Requirements. Management – Form E103;
(1) A post-license education course shall be sponsored by: (b) Falsification of attendance information submitted to the
(a) An accredited institution; commission;
(b) A school that has been licensed by the Kentucky (c) Allowing an instructor to solicit business or sell
Commission on Proprietary Education; materials to students in the classroom;
(c) An appropriate governmental regulatory body; (d) Failure to provide the commission the required materials
(d) An approved real estate school as defined by KRS in accordance with this administrative regulation; or
324.010(7); or (e) Conducting a course not approved prior to being offered.
(e) A broker-affiliated training program approved pursuant Section 3. Instructor Requirements.
to this administrative regulation. (1) A post-license education course shall be taught by an
(2) To apply for approval of a post-license education course, a instructor approved under the requirements established in 201
provider shall submit: KAR 11:175 and subject to the requirements in 201 KAR
(a) A completed Provider Application – Form E101, which 11:460.
shall: (2) A licensee who teaches an approved post-license education
1. Include a Course Outline – Form E105, broken into course shall be entitled to continuing education credit on an
fifteen (15) minute increments, to include learning hour-for-hour basis.
objectives for the course, teaching methods, (a) To obtain continuing education credit, the instructor shall
auxiliary aids, materials, and the policies of the be included on the roster that lists all attendees that
provider; and completed the course that is provided to the commission.
2. Be signed by the sponsor's administrator to indicate (b) The instructor shall not receive credit more than once in
compliance with applicable law and the a calendar year for each specific course taught.
requirements of this administrative regulation; Section 4. Post-license Education Course Criteria and
(b) A completed Education Course Application – Form Requirements.
E102, and the fifteen (15) dollar fee; (1) One (1) hour of post-license education shall be allowed for
(c) A copy of the license from the Kentucky Commission on each fifty (50) minutes of actual instruction.
Proprietary Education, unless the provider is an (2) Post-license education shall consist of thirty-two (32) hours
accredited college or university, an appropriate from the courses established in paragraphs (a) and (b) of this
governmental regulatory body, an approved real estate subsection and sixteen (16) hours as established in paragraph
school as defined by KRS 324.010(7)(b), or an approved (c) of this subsection:
broker-affiliated training program;
27
 (a) The three (3) hour Commission Licensee Compliance (2) Records containing licensee information shall be destroyed by
course; the provider after the three (3) years established in subsection
(b) The requirements in each of the following course topics: (1) of this section.
1. Six (6) hours in Agency; Section 7. Incorporation by Reference.
2. Six (6) hours in Contracts; (1) The following material is incorporated by reference:
3. Three (3) hours in Finance; (a) "Instructor Application – Form E100", 05/15 edition;
4. Three (3) hours in Advertising; (b) "Provider Application – Form E101", 05/15 edition;
5. Three (3) hours in Disclosure; (c) "Education Course Application – Form E102", 09/15
6. Three (3) hours in Fair Housing; edition;
7. Three (3) hours in Technology and Data Security; (d) "KREC Guidelines for Classroom Management – Form
and E103", 05/15 edition;
8. Two (2) hours in Risk Management; and (e) "Generally Accepted Principles of Education – Form
(c) Sixteen (16) hours in elective topics chosen by the E104", as adopted by the Real Estate Educators
licensee from the electives listed in the Post-license Association, 05/15 edition;
Topics – Form E113. (f) "Course Outline – Form E105", 05/15 edition;
(3) A licensee shall not receive post-license education credit for a (g) "Education Schedule – Form E106", 05/15 edition;
duplicate course. (h) "Course Evaluation – Form E108", 05/15 edition;
(4) More than nine (9) hours of post-license education shall not (i) "Course Evaluation Transmittal – Form E109", 05/15
be taken in a twenty-four (24) hour period. edition;
(5) Each post-license education course shall consist of: (j) "Education Completion Certificate – Form E110", 05/15
(a) Topics that are real estate specific, provide practical edition; and
knowledge of the brokerage business, and protect the (k) "Post-License Prescribed Topics – Form E113", 05/15
public interest; and edition.
(b) Course objectives and assessments that are practicum (2) This material may be inspected, copied, or obtained, subject
based to allow application of knowledge from pre- to applicable copyright law, at the Kentucky Real Estate
license education to practical real estate brokerage Commission, 10200 Linn Station Road, Suite 201, Louisville,
scenarios. Kentucky 40223, Monday through Friday, 8 a.m. to 4:30 p.m.
(6) A course that is solely motivational or considered to be
personal development in nature shall not be approved. 201 KAR 11:240 Distance education requirements
(7) All course approvals shall expire on December 31 of each RELATES TO: KRS 324.046(5), 324.085(1), (2), 324.281(7)
calendar year. Section 1. Definitions.
(8) All primary or secondary providers wishing to offer online or (1) "Continuing education course" means a course approved
other distance education courses shall be approved in pursuant to the requirements set forth in KRS 324.085(1) and
accordance with the provisions set forth in 201 KAR 11:240. 201 KAR 11:230.
The commission shall review the content of each course to (2) "Distance education course" means a continuing or post-
ensure that it meets the requirements established in this license education course or a pre-license course that:
administrative regulation and in 201 KAR 11:240. (a) Is taught in a setting in which the teacher and the student
Section 5. Compliance and Delinquency. are in separate locations; and
(1) The time requirements established in this administrative (b) Uses instructional methods that include internet-based
regulation shall be extended by the commission for good training, computer-based training (CBT), satellite
cause shown, such as extensive medical issues for the licensee transmission, or teleconferencing.
or the licensee’s immediate relative or if the licensee (3) "Post-license education course" means a course that satisfies
convenes active military duty. A licensee’s request for an the forty-eight (48) hours of education that is required within
extension of time for good cause shown shall be submitted to two (2) years of receiving or activating an initial sales
the commission within the two (2) year timeframe set forth in associate license.
KRS 324.085. (4) "Pre-license course" means a course that satisfies an
(2) If a licensee fails to provide proof of completion of the post- education requirement to obtain a real estate sales associate’s
license education requirements within the allotted timeframe or broker’s license, generally consisting of forty-eight (48)
set forth in KRS 324.085, then the licensee’s license shall be fifty (50) minute hours or more.
automatically canceled. Section 2. Distance Education Standards for Approval.
(3) A canceled license shall not be reactivated until the licensee (1) (a) The design and format of all continuing education, post-
has completed all of his or her post-license education license education, and pre-license courses offered
requirements, complied with all commission orders, and all through means of distance education shall satisfy the
other applicable licensing requirements. requirements of this administrative regulation and
Section 6. Records Maintenance. Distance Education Guidelines of the commission.
(1) Each post-license education provider shall maintain the (b) Continuing education, post-license education, and pre-
following records in a file for three (3) years following the license courses conducted for academic credit in an
end of each calendar year: accredited college or university via interactive television
(a) A copy of the roster submitted to the commission of shall be exempt from paragraph (a) of this subsection,
licensees attending the course; but shall satisfy the requirements established in Section 5
(b) A copy of the Course Evaluation Transmittal – Form of this administrative regulation.
E109; (2) A course shall be offered only in the delivery format in which
(c) The sign-in sheet or registration list used by the provider it was approved.
to track attendance; and (3) (a) An instructor for a distance education course shall be
(d) Any other documentation regarding student attendance. approved by the commission pursuant to the
requirements set out in 201 KAR 11:175.

28
 (b) Each course shall have an approved instructor available (f) A ninety-six (96) hour course shall contain at least 100
to answer questions from students. questions.
(c) The individual applying for approval as an instructor (g) More than two (2) retakes of the exam shall not be
shall complete the course before submitting the allowed.
application to the commission for its approval and shall (h) 1. A pre-license final examination shall be monitored
submit evidence of course completion with the by the approved instructor for the course or another
application. individual designated by the instructor who is not a
(4) (a) Course content shall be approved as established in 201 relative or a business associate of the student.
KAR 11:170, 201 KAR 11:230, and 201 KAR 11:235. 2. The monitor may be:
(b) The content of the course shall be in a topic specifically a. A certified librarian;
related to real estate. b. A public school administrator;
(c) License law or regulations from other states and general c. A college professor;
skills computer classes shall not satisfy this course- d. Other real estate instructor associated with the
content requirement. school that offers the course; or
(5) (a) The provider shall be approved by the commission and e. A monitor from a qualified online test
meet all other requirements for education as established monitoring service.
in KRS Chapter 324 and its administrative regulations. 3. The monitor shall sign a statement that he or she is
(b) A course shall be open to all licensees. not affiliated with the student in any way.
Section 3. Distance Education Course Requirements. A distance 4. The monitor shall:
education course shall provide mastery of the material and be a. Verify that the person taking the examination
developed in accordance with this section. is the person registered for the course;
(1) The material shall be divided into learning units, modules, or b. Observe the student taking the exam;
chapters. Each unit shall contain learning objectives that are c. Assure that the student does not use aids of any
comprehensive enough to ensure that the course will likely be kind;
mastered by the student upon completion of the material. d. Assure that a calculator is nonprogrammable;
(2) The course shall provide a structured learning method e. Assure that limitations on the final
designed to enable students to attain each objective. examination are not exceeded;
(3) The course shall: f. Certify to the provider that all requirements for
(a) Provide a means to assess the student’s performance on a the final examination have been met;
regular basis during each unit of instruction and before g. Submit to the provider a signed and notarized
proceeding to the next unit; and statement to that effect; and
(b) Provide a method for tracking the length of time a h. Assure that any student’s mobile device, cell
student spends on the course. phone, or camera is shut down and put away,
(4) A student shall not be able to bypass the course materials and while at the test site.
advance directly to the end-of-module quizzes or exercises (i) 1. Each student shall complete an affidavit that
that are included to assess the student’s performance. certifies that he or she has personally completed all
(5) Security shall be provided to ensure that the student receiving components of the course and the final exam with
credit is the one who actually completes the course. no assistance from persons other than the instructor.
(6) (a) For a continuing and post-license education course, the 2. The certification shall include the date of
student shall pass a final exam with a score of at least completion and the student’s signature, which may
seventy-five (75) percent that shall be included as the be provided electronically.
last module of the course, in order to receive credit. 3. Credit shall be denied and disciplinary action taken
(b) No more than two (2) retakes of the final examination if it is determined that a licensee received assistance
shall be allowed. on a distance education course or the final exam.
(c) Each course shall have an item bank from which the final 4. a. To obtain credit for a distance education
examination questions shall be pulled. course, a licensee shall complete the course
(d) The bank shall contain multiple choice items and have within the time frame allotted by the school for
forty (40) percent more questions than required on the pre-license courses or within the calendar year
final examination, so that retake exams will contain for continuing and post-license education,
unique new questions. unless the licensee is completing the course to
(e) The final examination shall have a minimum of five (5) comply with a continuing education
questions for each approved hour of education. delinquency plan as outlined in 201 KAR
(7) (a) A pre-license distance education course shall contain a 11:230, or to comply with an order of the
monitored final examination arranged for the student by commission.
the instructor for the course. b. The completion date for all courses shall be the
(b) The examination shall cover both the content area date the student completes the final
covered by the course and the applicable real estate laws examination with a passing score of at least
and administrative regulations that apply to those content seventy-five (75) percent, and submits the
areas. evaluation and the student affidavit.
(c) Each course shall have an item bank from which the final Section 4. Distance Education Provider Requirements.
examination questions shall be pulled. (1) (a) A provider shall submit the appropriate application for
(d) The bank shall contain multiple choice items and have approval and the Distance Education Checklist and
forty (40) percent more questions than required on the Information Sheets – Form E114.
final examination, so that retake exams will have some (b) The application shall include:
unique new questions. 1. A complete copy of the program on the medium
(e) a. A forty-eight (48) hour course shall contain a that is to be used;
minimum of fifty (50) items.
29
 2. All hardware or software required to review the (1) A course offered for academic credit via interactive television
material; in an accredited college or university shall include:
3. A link to the internet site; (a) Two (2) way audio and video connections between the
4. A copy of the final examination question bank and instructor and the student; and
key for each course; and (b) College personnel stationed at each remote site to handle
5. A copy of any student materials. technology problems that may arise and to monitor
(c) The application and other required documents shall be attendance of students during the class.
submitted at least sixty (60) days prior to the (2) The program shall be one that has been properly approved by
commission’s meeting date, to allow adequate time for the college accrediting body as fulfilling the requirements for
review. academic credit.
(2) The provider shall have reasonable oversight to monitor a Section 6. Incorporation by Reference.
student’s work and electronic access in order to ensure that (1) The following material is incorporated by reference:
the student completing the work is the one who is enrolled in (a) "Distance Education Checklist and Information Sheets –
the course. Form E114", 06/15 edition, Kentucky Real Estate
(3) (a) The provider shall ensure that approved instructors are Commission; and
available to assist students who have questions (b) "Distance Education Guidelines", 9/2015.
regarding: (2) This material may be inspected, copied, or obtained, subject
1. The technology used in the delivery; to applicable copyright law, at the Kentucky Real Estate
2. The course content; or Commission, 10200 Linn Station Road, Suite 201, Louisville,
3. The completion requirements. Kentucky 40223, Monday through Friday, 8 a.m. to 4:30 p.m.
(b) A student shall not be required to call more than one (1)
person to obtain answers to questions about the course. 201 KAR 11:245. Property management procedures and
(4) (a) The provider shall include a complete description of the guidelines
hardware and software or other technology required by RELATES TO: KRS 324.160(4)(f), (h)
the student in order to complete the course. Section 1.
(b) The provider shall include an explanation of the (1) A licensee shall not engage in property management without a
safeguards against loss of data resulting from inadvertent current written property management agreement.
hardware or software failure. (2) A property management agreement shall contain:
(5) The provider shall include a detailed explanation of how the (a) The business name and address of the licensed agent's
course measures, documents and records the student company;
completion of the material, and any activities or exercises (b) The name and address of the owner;
required to achieve mastery of the material. (c) The address of the real estate being managed and the
(6) (a) The provider shall obtain an evaluation from each number of units;
student. (d) The date when the agreement begins and ends, and a
(b) An evaluation may be submitted to the provider provision stating whether the owner agrees or not to
electronically and a copy of each form shall be returned automatic annual renewal;
along with the attendance roster and other documents (e) A provision stating the method for early termination;
required by the commission for continuing education (f) The amount of, or the method for computing the amount
courses. of compensation to the licensee;
(c) Attendance rosters for each approved continuing and (g) The amount of or the method of determining the minimum
post-license education course shall be submitted on a security deposit to be collected from tenants for each unit
semi-monthly basis and shall include: managed;
1. Provider’s name; (h) The name and address of the bank where the licensee's
2. Course name and number assigned by the escrow account is kept where the security deposit will be
commission; held together with the account number. This information
3. Total enrollment for the month; shall also be contained in the lease;
4. Licensee’s full legal name; (i) A provision which is in accord with KRS 383.580 setting
5. Licensee’s residence address; forth the procedures governing returning or retaining the
6. Licensee’s identifying information; and security deposit. This provision shall also be contained in
7. The date of completion for each student, so that the lease;
compliance with various deadlines can be verified. (j) A provision setting forth the conditions under which the
(d) A completion certificate shall be issued to the student licensee is authorized to pay expenses related to the real
upon completion of the course, submission of the estate being managed;
evaluation, signing of the affidavit, and passing the final (k) A statement setting forth the date when the licensee shall
exam. send the owner an accounting of the transactions related
(7) (a) For a pre-license course, a provider shall issue a to the real estate being managed;
completion certificate to the student. The document shall (l) A copy of the form of the lease document which the
contain: licensee shall have the tenant sign shall be attached to the
1. The provider’s name; agreement;
2. Course name; (m) A provision whereby the owner certifies that he has
3. Number of hours earned; received a duplicate copy of the agreement and the
4. Beginning and completion date for the course; attached lease form; and
5. Student’s full legal name; and (n) The signature and date of signature of the owner and the
6. Licensee’s residence address. licensee.
(b) This document shall be submitted with the student’s Section 2.
license application. (1) An owner ledger, in electronic or written form, shall be
Section 5. Interactive Television Requirements. maintained for each owner of real estate being managed.
30
(2) A tenant ledger, in electronic or written form, shall be (6) Provision setting forth the date by which the closing shall
maintained for each tenant renting real estate being managed. occur and when possession shall be given to the buyer.
(3) (a) A receipt shall be given for money received. Section 3.
(b) Money received shall be deposited into an escrow or (1) If a licensee presents an offer to purchase real estate for which
management account of the licensee without unreasonable an executory contract to sell the property is already in
delay. Licensees who have an ownership in the real estate existence, the offer shall indicate in writing that the offer is
being managed shall comply with the requirements of contingent upon the nonperformance of the existing executory
KRS 383.580. contract by inserting the following provision in the offer:
(c) The amount of money received shall be entered into the "This offer is submitted as a back-up offer, which means the
owner and tenant ledgers, by unit. property is subject to a previously-accepted offer which has
(4) Expenses paid by an agent shall be documented by invoice or priority over this offer."
receipt, by unit. Documentation shall be retained with a (2) The provision required in subsection (1) of this section shall be:
licensee's records. (a) Inserted by the licensee who prepares the offer to
(5) Adjustments to a security deposit shall be made in accordance purchase, if he is aware of the existing contract; and
with KRS 383.580. Adjustments shall also be entered on the (b) Made by the listing licensee as a counteroffer.
owner and tenant ledgers, by unit. Section 4. Contracts to contain financing provisions. A contract
(6) A licensee shall send a monthly accounting to an owner of providing for the purchase of property shall specifically state:
transactions: (1) The manner in which the purchase shall be financed; and
(a) Related to the real estate being managed, by unit; and (2) The amount of any encumbrance and whether it is to be
(b) Entered on the owner and tenant ledgers, by unit. underwritten by the seller or a commercial institution or
(7) Within sixty (60) days of the termination of a management otherwise.
agreement, a licensee shall send the owner a final accounting. Section 5. Any agreement for compensation from a licensee to his or
The final accounting shall contain transactions that occurred her client or customer shall be in writing. If a licensee fails to
after the last monthly accounting. comply with the requirement in this section, the licensee’s conduct
(8) A licensee who owns the real estate being managed shall: shall be considered improper and in violation of KRS 324.160(4)(u).
(a) Comply with the accounting requirements relating to Section 6. Negotiating a subsequent listing agreement with another
receipt, deposit and adjustment of tenant security deposits; broker.
and (1) Prior to the expiration of an original listing agreement;
(b) Be exempt from the other accounting requirement (a) Another real estate broker, or sales associate of the broker,
specified in this administrative regulation. shall not contact the seller to obtain a subsequent listing
Section 3. A broker shall retain property management agreements, agreement; and
leases, monthly statements, owner and tenant ledgers, and bank (b) The seller may contact another real estate broker to obtain
statements relating to property management for five (5) years. a subsequent listing agreement.
Section 4. A tenant security deposit shall be deposited and (2) Another broker, or sales associate of the broker, may enter into
maintained in an escrow account in compliance with KRS 324.111. a subsequent listing agreement with the seller, if:
A licensee who has an ownership in the real estate being managed (a) The seller initiated contact with the licensee to discuss a
shall comply with the requirements of KRS 383.580. new listing agreement;
(b) The new listing agreement will take effect upon the
201 KAR 11:250. Listing and purchase contracts and expiration of the current listing agreement; and
other agreements entered into by licensees; provisions (c) The commission’s Seller-Initiate Re-Listing Request
required – seller-initiated re-listing request disclosure Disclosure Form is properly completed and signed by the
form seller and licensee. The form shall provide:
RELATES TO: KRS 324.160(4)(v), (w), 324.281(5) 1. The seller’s affirmation that the seller initiated
contact with the licensee to discuss a new listing
Section 1. Listing contracts shall include the:
agreement;
(1) Listing price of the property, unless the sale is to be by
2. The date on which the seller contacted the licensee to
auction;
discuss a new listing agreement; and
(2) Date and time of the signing of the listing contract for all
3. The signatures of the seller and the licensee,
parties who sign;
including the date and time that the seller and
(3) Date and time of expiration of the listing contract;
licensee signed the form.
(4) Fee or compensation agreed upon;
(3) If a licensee fails to comply with the requirements in this
(5) Street, address or location of the real estate listed for sale;
section, the licensee’s conduct and dealings will be considered
(6) Signatures of all owners;
improper and in violation of KRS 324.160(4)
(7) Special directions of the owner concerning limitations on
Section 7. Incorporation by Reference.
showings and sub agency restrictions; and
(1) "Seller-Initiated Re-Listing Request Disclosure Form", July
(8) Date and time for initialing of all changes on the contract.
2009, is incorporated by reference.
Section 2. An offer to purchase or a counteroffer prepared by or at
(2) This material may be inspected, copied, or obtained, subject
the direction of a licensed agent shall include the:
to applicable copyright law, at the Kentucky Real Estate
(1) Purchase price, the amount of contract deposit given and who is
Commission, 10200 Linn Station Road, Suite 201, Louisville,
to hold the deposit;
Kentucky 40223, Monday through Friday, 8 a.m. to 4:30 p.m.
(2) Date and time of signing of the offer or counteroffer for all
parties who sign;
(3) Date and time when the offer or counteroffer expires;
201 KAR 11:300. Use of facsimile and electronic-mail
(4) Street, address or a general description of the real estate transmissions, electronic storage
sufficient to identify the parcel; RELATES TO: KRS 324.281(5), 324.282
(5) Names of the offering party and the agent who prepared the Section 1. Facsimile Transmissions.
offer or counteroffer; and

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(1) A licensee may use facsimile (FAX) devices to transmit and (3) If the property that is the subject of the Seller's Disclosure of
receive documents according to the provisions of this Property Condition form is not listed, any licensee involved in
administrative regulation. the transaction shall solicit:
(2) A copy of a document transmitted by FAX device shall be (a) The initials of all property owners-sellers and the date
immediately mailed by regular mail, postage prepaid and and time for the initialing; and
properly addressed, to the person to whom the FAX (b) The initials of all prospective buyers and the date and
transmission is transmitted. time for initialing.
(3) A document received by FAX device shall be immediately Section 4. Incorporation by Reference.
placed in the licensee's file as required under 201 KAR (1) "Seller’s Disclosure of Property Condition", 3/2016 edition, is
11:062. incorporated by reference.
Section 2. If a licensee complies with Section 1 of this (2) This material may be inspected, copied, or obtained, subject
administrative regulation, the time of delivery of a document to applicable copyright law, at the Kentucky Real Estate
transmitted by FAX device, and a document required to be Commission, 10200 Linn Station Road, Suite 201, Louisville,
submitted under 201 KAR 11:045, shall be the time of Kentucky 40223, Monday through Friday, 8 a.m. to 4:30 p.m.,
transmission by FAX device. and is also available on the Website at www.krec.ky.gov.
Section 3. Electronic-mail Transmissions.
(1) A licensee may use electronic mail to transmit and receive 201 KAR 11:400. Agency disclosure requirements
documents according to the provisions of this administrative RELATES TO: KRS 324.160(4)(e), (n)
regulation. Section 1. Definitions.
(2) A copy of a document received by electronic mail shall be (1) "Business relationship" means any arrangement whereby a
immediately mailed by regular mail, postage prepaid, and licensee and a party have or had a mutual financial ongoing
properly addressed to any participating licensee who requests interest in any company, corporation, or other income-
a copy of the document. A document received by electronic producing venture, including any prior representation by the
mail shall be immediately placed in the licensee's file as licensee for the party’s purchase or sale of real estate, but
required under 201 KAR 11:062. does not include the current real estate transaction.
Section 4. If a licensee uses electronic mail to transmit and receive (2) "Commercial transaction" means a transaction other than the
documents, in accordance with section 3 of this administrative sale of a single-family residential property, multifamily
regulation, the time of delivery of the electronically-mailed property containing four (4) units or less, single-family
document shall be the time that it is sent from the originator’s residential lot, or agricultural property.
electronic-mail system. (3) "Confidential information" means information that would
materially compromise the negotiating position of a party or
201 KAR 11:350. Seller's disclosure of property prospective party to a real estate transaction if disclosed to the
conditions form. other party.
RELATES TO: KRS 324.360, 44 C.F.R. 64.3(b) (4) "Contact" means discussion or correspondence between a
Section 1. Definition. "Single family residential real estate licensee and an identified prospective party involving the
dwelling" means any: licensee’s services related to a mutually-contemplated real
(1) Duplex, triplex, fourplex; condominium, townhouse, or estate transaction.
residential unit; (5) "Delivery" means delivery of an item to a party or prospective
(2) Manufactured home permanently attached to land; or party by:
(3) Residential unit otherwise conveyed on a unit-by-unit basis, (a) Mail;
even if the unit is part of a larger building or parcel of real (b) Facsimile transmission;
estate containing more than four (4) residential units. (c) Electronic mail;
Section 2. The Seller’s Disclosure of Property Condition form shall (d) Messenger; or
be completed and signed by the seller of a single family residential (e) Hand.
real estate dwelling, as required by KRS 324.360, upon execution (6) "Family relationship" means any known familial relationship
of the listing agreement or a similar agreement by which a licensee between a licensee and party regardless of distance of the
intends to market the property. relationship.
Section 3. (7) "Party" means one represented by a real estate licensee;
(1) The Seller’s Disclosure of Property Condition form shall also (8) "Personal relationship" means a platonic or nonplatonic
include: friendship between a licensee and a party.
(a) Whether or not the single family residential real estate (9) "Prospective party" means a person who:
dwelling is located within a special flood hazard area as (a) Has contact with a licensee; and
identified in 44 C.F.R. 64.3(b) mandating the purchase of (b) Has not entered into a brokerage agreement with a
flood insurance for federally backed mortgages (Zones licensee relative to the contemplated transaction.
A, A1-30, AE, A99, AO, AH, AR, AR/A1-30, AR/AE, Section 2. The provisions of this administrative regulation shall not
AR/AO, AR/AH, AR/A, V1-30, VE, V, VO, M, and E; apply to a:
(b) Contact information for any homeowner’s association; (1) Sale of real estate at auction;
and (2) Property management of real estate; or
(c) Notice of the written disclosure of methamphetamine (3) Commercial transaction.
contamination required by KRS 224.1-410(10) and 902 Section 3. Prospective Party Information.
KAR 47:200. (1) A licensee shall complete either the "Consumer Guide To
(2) If the property that is the subject of the Seller's Disclosure of Agency Relationships (For Companies That Allow Only Dual
Property Condition form is listed, the listing agent shall solicit Agency {No Designated Agency} - Model Policy)" or the
the initials of all property owners-sellers and the date and time "Consumer Guide To Agency Relationships (For Companies
for the initialing at the time he or she executes any listing That Allow Designated Agency & Dual Agency - Model
agreement or similar agreement by which a licensee intends to Policy)", whichever is applicable, and deliver it to the
market the property. appropriate prospective party prior to:
32
 (a) Receiving confidential information from a prospective 1. If the real estate transaction involves designated
party relative to a mutually-contemplated real estate agency, the licensee shall complete Section II,
transaction; providing on the appropriate line the name of the
(b) Entering a representation agreement or submitting an agent representing the buyer and the name of the
offer to, or on behalf of, a prospective party; and agent representing the seller. The licensee shall also
(c) The conclusion of the second contact between the provide on the appropriate line the name of the real
licensee and a prospective party. estate brokerage company whose principal broker
(2) The commission’s Consumer Guide to Agency Relationships and manager or managers shall be the dual agents in
Model Policies and the Agency Disclosure Statements shall the designated-agency transaction. The licensee
provide: shall then present the appropriate Agency
(a) Relationships available between the licensee and Disclosure Statement to the buyer and seller for
prospective party in Kentucky; their signatures, which shall be provided in the
(b) The specific relationship proposed between the licensee "Consent" section, appearing at the bottom of the
and prospective party; Agency Disclosure Statement.
(c) The name of the licensee completing the form, the name 2. If the real estate transaction involves dual agency,
of the principal broker of the licensee, and the name of the licensee shall complete Section II, providing on
the licensee’s real estate company; the appropriate line the name of both agents
(d) The name of the prospective party; and involved in the transaction. If an agent has any
(e) The signature and date of signing by the prospective business, family, or personal relationship with the
party. other party, then the agent shall explain the nature
(3) (a) The commission’s "Consumer Guide to Agency of the relationship or relationships in the space
Relationships" model policies may be revised by a provided for that information. The licensee shall
broker to include the broker’s company-specific then present the appropriate Agency Disclosure
information, including logos, and any other revisions Statement to the buyer and seller for their
which shall constitute a change or changes in the form of signatures, which shall be provided in the "Consent"
either or both model policies. section, appearing at the bottom of the Agency
(b) Model policies that have been properly revised by a Disclosure Statement.
broker may be completed and delivered by the broker to (c) If the real estate transaction involves only one (1) agent,
a prospective party as substitutes for the commission- the licensee shall complete Section III, providing on the
required model policies, to satisfy the requirements set appropriate lines the licensee’s name and the name of the
out in Section 3 of this administrative regulation. real estate brokerage company involved in the
(c) A licensee shall solicit the signature of a consumer on transaction.
the appropriate consumer guide as an acknowledgement 1. If the agent will be representing both the buyer and
by the consumer of his or her receipt of it and as the seller in the transaction, the licensee shall
evidence of the licensee’s compliance with this acknowledge that by marking the first box in
provision. Section III, which states that the agent will be a dual
(4) (a) An "Agency Disclosure Statement" that has been agent. If the agent has any business, family, or
developed by the broker or sales associate shall be personal relationship with either the buyer or seller
submitted to the commission for its prior approval. in the transaction, then the agent shall explain the
(b) The general counsel of the commission shall: nature of the relationship or relationships in the
1. Review the form; space provided at the end of the information
2. Make a recommendation to the commission that the presented for the first box in Section III. The
form be approved or disapproved; and licensee shall then present the appropriate Agency
3. Inform the broker or sales associate of the Disclosure Statement to the buyer and seller for
commission's decision. their signatures, which shall be provided in the
(5) The agency disclosure statements shall be given to the "Consent" section, appearing at the bottom of the
consumer and signed at the time a buyer is making an offer Agency Disclosure Statement.
and at the time a seller is reviewing that offer. 2. If the agent will be representing only one (1) of the
(a) A licensee shall complete Section I of the Agency parties or none of the parties in the real estate
Disclosure Statement if the real estate transaction transaction, then the licensee shall acknowledge that
involves agents from two (2) different companies. In by marking the second box in Section III and only
such transactions, the licensee shall provide on the one (1) of the boxes that follow it, identifying which
appropriate lines the licensee’s name and the name of the party, if any, the agent will be representing in the
real estate brokerage company along with the name of transaction. The second box in Section III shall be
the principal broker for that company. The licensee shall checked if a real estate transaction involves a "for
then present the appropriate Agency Disclosure sale by owner" seller, an unrepresented buyer, or a
Statement to the buyer or seller, whichever applies, for transaction brokerage situation. The licensee shall
that person’s signed consent, which shall be provided in present the appropriate Agency Disclosure
the "Consent" section, appearing at the bottom of the Statement to the buyer and seller for their
Agency Disclosure Statement. signatures, which shall be provided in the "Consent"
(b) A licensee shall complete Section II of the Agency section, appearing at the bottom of the Agency
Disclosure Statement if the real estate transaction Disclosure Statement.
involves two (2) agents in the same real estate brokerage Section 4. Incorporation By Reference.
company. In such transactions, the licensee shall (1) The following material is incorporated by reference:
designate whether the transaction involves designated (a) "Consumer Guide To Agency Relationships (For
agency or dual agency by checking the appropriate box. Companies That Allow Only Dual Agency - Model
Policy)", March 2006;
33
 (b) "Consumer Guide To Agency Relationships (For (3) A street address and phone number for the company's
Companies That Allow Designated Agency & Dual principal office.
Agency - Model Policy)", March 2006; Section 2. A real estate Internet real property advertisement of a
(c) "Agency Disclosure Statement - Buyer", March 2006; licensee, or offer or solicitation to provide brokerage services by a
and licensee, related to marketing or identifying real property for sale
(d) "Agency Disclosure Statement - Seller", March 2006. or lease shall include the name of the principal broker of the
(2) This material may be inspected, copied, or obtained, subject company with whom the licensee is affiliated pursuant to KRS
to applicable copyright law, at the Kentucky Real Estate 324.010(6) and 324.010(14) or the name of the real estate company
Commission, 10200 Linn Station Road, Suite 201, Louisville with which the licensee’s license is held.
Kentucky 40223, Monday through Friday, 8 a.m. to 4:30 p.m. Section 3. A nonprincipal broker real estate licensee's Internet
home page shall include:
201 KAR 11:410. Broker duties pursuant to designated (1) The licensee’s name;
agency (2) The principal broker with whom the licensee is affiliated or
RELATES TO: KRS 324.121, 324.160(3) the name of the real estate company recorded with the
Section 1. Definitions. Kentucky Real Estate Commission with which the licensee’s
(1) "Confidential information" means information that: license is held;
(a) Is provided to a designated agent by a seller or (3) A statement indicating the licensee holds a Kentucky license
prospective buyer of real estate; to broker real estate if the licensee's principal business
(b) Describes or affects the provider's negotiation, location is outside Kentucky;
bargaining position or motivation; (4) The regulatory jurisdiction of the licensee’s principal business
(c) Is not required by law; and address; and
(d) Will not constitute fraud or a dishonest dealing, if not (5) A street address and phone number for the licensee's principal
disclosed. business location.
(2) "Designated agent" means a person designated pursuant to
KRS 324.121(1). 201 KAR 11:430. Procedure for criminal records
Section 2. A principal broker who appoints a designated agent background check: disciplinary action against licensees
shall: for acts committed before or during the application
(1) Require that all documents that contain confidential process
information relating to a client; RELATES TO: KRS 324.045, 324.990, 28 CFR 16.30 to 16.33
(a) Be kept in an individual file maintained by the principal Section 1. Prior to taking a licensure examination, an applicant
broker and accessed only by the principal broker or the shall request a copy of the applicant's identification record.
designated agent appointed by the principal broker to (1) The applicant may request a copy of his or her identification
represent the individual; and record from the Federal Bureau of Investigation pursuant to
(b) Not be accessible to another licensee except as required the provisions of 28 CFR 16.30 to 16.33 or from any other
by KRS 324.160(3); commission-approved criminal background-checking
(2) Implement a system to maintain confidential information. The provider or company furnishing identification records that are
system shall: comparable to those provided by the Federal Bureau of
(a) Prohibit an employee from assisting more than one (1) Investigation, as determined by the commission.
designated agent in the same transaction, if the (2) An applicant seeking licensure through a reciprocal
designated agents represent different clients in that agreement shall request the Federal Bureau of Investigation
transaction; identification record, or the identification record of a
(b) Prohibit discussions between a designated agent and commission-approved alternate provider, prior to applying for
client concerning confidential information of the client licensure with the Kentucky Real Estate Commission.
within the office unless the conversation occurs in an Section 2.
environment which allows appropriate privacy; (1) Upon receipt of the identification record of the Federal
(c) Prohibit the disclosure of confidential information by Bureau of Investigation, or a commission-approved alternate
office personnel and clerical staff; and provider, the applicant shall:
(d) Require notification to each client involved in a (a) Submit the original identification record to the Real
transaction, if the principal broker becomes aware of an Estate Commission within five (5) days of the
unauthorized or inadvertent disclosure of confidential applicant’s receipt of it if the identification record
information relating to that transaction; reveals:
(3) Require a licensee to disqualify himself from being appointed 1. Any felony conviction regardless of when the
as a designated agent for a party if the agent has received conviction occurred; or
confidential information concerning the other party to the 2. A misdemeanor conviction within the five (5) years
transaction. previous to the applicant’s receipt of the
identification record;
201 KAR 11:420. Standards for internet advertising (b) Submit the identification record to the Real Estate
RELATES TO: KRS 324.117(6) Commission at the time of application if it does not
Section 1. A real estate company’s Internet home page shall indicate:
include the following information: 1. A felony conviction at any time; or
(1) The company’s full, nonabbreviated name as recorded with 2. A misdemeanor conviction within the previous five
the Kentucky Real Estate Commission or the name of the real (5) years.
estate company's principal broker; (2) If the Real Estate Commission receives an identification
(2) A statement indicating the principal broker is a Kentucky record which reveals a felony conviction, or a misdemeanor
licensed real estate broker if the principal office location is conviction within the previous five (5) years, the Real Estate
outside of Kentucky; and Commission shall investigate the conviction and may, at its

34
 discretion, investigate any charges that are revealed by the commonwealth may be denied by the commission, at its
identification record or any other evidence of dishonesty, discretion. If the commission denies an application
untruthfulness, or bad reputation of the applicant. based upon one or more of these grounds, the applicant
(3) Following the completion of the investigation, the Real Estate may reapply for licensure after the period of probation,
Commission shall review the investigation report and shall: parole, or other state supervision or reporting
(a) Order the applicant to appear before the commission for requirements has ended.
a hearing pursuant to KRS 324.045 and Chapter 13B; or (7) An issued license shall be revoked if, while an applicant, the
(b) Allow the applicant to proceed with the licensure licensee:
application without a hearing if the Real Estate (a) Received an identification report indicating a felony
Commission determines the conviction does not conviction, or a misdemeanor conviction in the previous
necessitate a hearing pursuant to KRS 324.045. five (5) years and the applicant did not submit the report
(4) (a) If a hearing is ordered under subsection (3)(a) of this to the Real Estate Commission for investigation as
section, the applicant shall appear before the Real Estate required by subsection (1)(a) of this section;
Commission or the Real Estate Commission’s authorized (b) Failed to request the report as required by this section; or
representative pursuant to KRS Chapter 13B. (c) Failed to submit the identification report with the
(b) The hearing shall determine whether the applicant meets application for licensure, as required by subsection (1)(b)
the standards of KRS 324.045 and shall consider: of this section.
1. The nature of the crime; (8) If an applicant has engaged in any unlicensed brokerage
2. Whether the crime indicates the applicant’s activity within this commonwealth, the applicant shall, prior
untrustworthiness or incompetence in a manner that to the issuance of any license by the commission, disgorge all
threatens the public interest; fees earned or received by him or her as a result of the
3. Any evidence of honesty, truthfulness, and good unlicensed brokerage activity.
reputation of the applicant;
4. Evidence of rehabilitation by the applicant since the 201 KAR 11:440. Personal assistant duties
crime; RELATES TO: KRS 324.010(4), 324.030(6)
5. Whether the applicant has received written Section 1. A nonlicensed personal assistant, office worker, or
confirmation from a principal broker willing to clerical worker shall not:
accept the applicant as an associate upon licensure; (1) Negotiate terms of a real estate transaction or real estate
6. Whether the applicant is currently under probation, brokerage agreement;
parole, or other state supervision or reporting (2) Complete offers or contracts relative to a real estate
requirements as a condition of any criminal transaction;
sentence; and (3) Disclose information that is available to a real estate licensee
7. Other information relevant to the applicant’s fitness but is not available to the general public;
to broker real estate. (4) Attend a real estate closing except to assist a licensee present
(5) If an authorized representative conducts the hearing, the at the closing;
authorized representative shall recommend to the Real Estate (5) Access information which requires membership in an industry
Commission whether the applicant meets the standards of trade group if the supervising licensee is not a member of the
KRS 324.045. The Real Estate Commission may accept the industry trade group;
recommendation, reject the recommendation and enter a (6) Write or place advertisements without review by a licensee;
separate order, or remand to the representative for further (7) Express material opinions on any aspect of a real estate
proceedings in accordance with KRS Chapter 13B. transaction to anyone other than the supervising licensee;
(6) (a) 1. Following the hearing, the Real Estate Commission (8) Interpret real estate contractual terminology for others;
shall either approve or deny the application and (9) Represent to others that he has a real estate license; or
notify the applicant of its decision along with a (10) Perform any activity which requires a real estate license.
brief, written explanation of the reasons for its Section 2. A nonlicensed personal assistant, office worker, or
decision. clerical worker may perform the following tasks:
2. The applicant may proceed with the licensure (1) Distribute literature, serve refreshments, greet guests, and
application if the Real Estate Commission states in procure guest signatures on a sign-in book at an open-house,
its order that the applicant may proceed with the without a supervising licensee present at the open house if:
licensure application. (a) The seller or lessor provides written consent for the
3. The Real Estate Commission’s order shall provide assistant to serve in this capacity; and
an expiration date by which the applicant shall take (b) The supervising licensee directs the assistant to serve in
the licensure examination. this capacity;
4. If the Real Estate Commission denies the (2) Provide the following general public information to others
application, the Real Estate Commission shall pursuant to KRS 324.030(6):
indicate in its order, if and when, the applicant will (a) Whether real estate is listed with the real estate
be eligible to submit a subsequent licensure company;
application. (b) Whether real estate is under contract with the company;
(b) If the Real Estate Commission’s order indicates the (c) Whether a real estate transaction has closed;
applicant may proceed with the licensure application, the (d) The listing price of the real estate;
applicant shall submit a copy of the order to the Real (e) Other information about the real estate if:
Estate Commission with the licensure application. 1. The information is provided in writing;
(c) Failure to produce the order shall constitute grounds to 2. Disclosure is approved by the supervising licensee;
deny the licensure application. and
(d) The application of an applicant who is, at the time of 3. Disclosure does not violate the licensee’s fiduciary
filing, under probation, parole, or other state supervision duties to his client;
or reporting requirements ordered by any court of the
35
(3) Appear in advertisements and have his or her name appear in (c) The examination shall be submitted to the commission
advertisements if the advertisement does not indicate or imply for approval prior to use in the course.
the assistant has a real estate license; (d) The commission shall review each proposed examination
(4) Contact others to set appointments on behalf of the for content to ensure that each course topic is covered
supervising licensee; and tested.
(5) Receive confidential information from a consumer relative to (e) If certain areas are lacking, the commission shall issue
a real estate transaction if the information is communicated recommendations as to how to improve the examination
only to the supervising licensee; and shall allow the school thirty (30) days to resubmit
(6) Copy a key related to a real estate transaction at the direction the examination for approval.
of the supervising licensee; or (6) Require schools and instructors to take appropriate steps to
(7) Unlock real estate for any purpose relative to the real estate maintain the confidentiality of the final examinations at all
transaction if: times. These steps shall include:
(a) The supervising licensee receives the consent of the (a) Maintaining examinations and answer keys in a secure
owner or lessor; place accessible only to the school administrator and the
(b) The assistant answers no questions about the real estate instructor,
other than as specifically allowed by this administrative (b) Prohibiting students from retaining copies of the final
regulation or statute; and examination answer sheets; and
(c) The assistant does not show the real estate to a (c) Monitoring the students at all times when examinations
consumer. are being conducted.
Section 3. Supervision of a nonlicensed personal assistant, office Section 3. Instructors.
worker, or clerical worker shall require: (1) An instructor teaching this course shall have at least three (3)
(1) A principal broker to assign supervision duties for each years of previous experience within the past five (5) years as a
assistant to at least one (1) licensee, which may be the Kentucky approved instructor of prelicense courses.
principal broker, of the company; (2) Each instructor shall attend a commission-approved training
(2) The principal broker to require all assistants working for a program specifically designed for this course prior to teaching
licensee of the company to be informed of the requirements of the course for the first time.
this administrative regulation and the provisions of KRS (3) All approved prelicense schools shall be notified when a
324.030; training program has been scheduled, and it shall be the
(3) A principal broker to establish a policy by which a school’s responsibility to notify any instructors that wish to
supervising licensee provides training for assistants in a attend the training program.
manner reasonably adequate to ensure compliance with this (4) Upon completion of the training course, the instructor’s
administrative regulation; request for approval shall be submitted to the commission for
(4) A supervising licensee to provide reasonable supervision of approval, along with the course materials.
assistants in a manner which shall ensure compliance with (5) The commission shall notify the provider and instructor of its
this administrative regulation; and decision in writing.
(5) A supervising licensee to be reasonably accessible to (6) In order to retain approval to teach this course, an instructor
assistants in a manner which allows the assistant to contact shall attend all subsequent training programs that the
and locate the licensee concerning pending transactions. commission deems necessary based upon changes in license
laws and administrative regulations.
201 KAR 11:450. Broker management course Section 4. Course Approval.
RELATES TO: KRS 324.046(1)(a) (1) To obtain approval for the course, the school shall submit a
Section 1. An applicant for a broker’s license shall first attend a course syllabus which outlines the requirements for the course
three (3) academic credit hour brokerage management skills course and other attachments, specifically:
as part of his or her twelve (12) hours of broker prelicense (a) The time period over which the course will be conducted
education real estate courses pursuant to KRS 324.046(1)(a). and a sample schedule of how course will be offered;
Section 2. The brokerage management skills course shall: (b) The course description and objectives;
(1) Satisfy three (3) hours of the applicant’s twelve (12) hours of (c) The attendance and participation requirements;
real estate courses required to become a broker; (d) When projects shall be due;
(2) Be a three (3) academic hour comprehensive review of all the (e) When the final examination shall be conducted;
skills necessary to run a brokerage office in accordance with: (f) The grading scale;
(a) KRS Chapter 324; (g) The textbooks being used and how material will be
(b) 201 KAR Chapter 11; taught in conjunction with completion of the projects, the
(c) Common law and federal law relating to real estate; and final exam;
(d) The standards of practice for a real estate broker (h) The name and contact information for each instructor
pertaining to adequate supervision of all sales associates who will teach the course, subject to completion of the
affiliated with the broker; required instructor training program;
(3) Require each student successfully completing the course to (i) A copy of the final examination bank and answer key;
develop a sample business plan, a sample financial plan and and
an office policy and procedure manual; and (j) A copy of the mandated curriculum.
(4) Require submission of the projects listed in subsection (3) of (2) Course approval may be withdrawn by the commission if the
this section within one (1) year of completion of the instructor fails:
coursework; (a) To follow the prescribed outline;
(5) (a) Require each successful student to take a comprehensive, (b) To require the students to develop a sample business and
closed-book examination consisting of at least seventy- financial plan or a sample office policy and procedure
five (75) multiple choice questions and to pass the test manual;
with a minimum score of seventy-five (75) percent.
(b) One (1) retake of the examination shall be permitted.
36
 (c) To require the students to take and pass a comprehensive submit a recommendation to the commission as to if the
examination and obtain a seventy-five (75) percent pass instructor shall be allowed to continue to teach courses.
rate; or (10) Based on the recommendation of the monitor, the evaluation
(d) To attend training programs required by the commission. score, and the comments from the third class, a
(3) Any school whose course approval has been withdrawn may recommendation shall be made to the commission to:
apply to the commission for an opportunity to be heard. The (a) Take no further action;
commission shall make a decision as to reinstatement of (b) Suspend the approval of the instructor; or
course approval. (c) Place the instructor on probation pending the evaluation
Section 5. Monitoring. and review of a future class.
(1) A school shall permit monitoring by the commission or its (11) If the commission issues a probationary order, the
authorized representative. commission shall establish the length and terms of the
(2) (a) A school shall submit, sample copies of projects probationary period as well as the date of the class to be
submitted by students and graded by the instructor as an monitored.
evaluation of the course. (12) At the conclusion of the probationary period, the commission
(b) If the instruction or content of the projects is deficient, so education director shall recommend to the commission if the
as to impair the value of the course, a notice of instructor’s approval shall continue.
deficiency shall be issued to the school. (13) The commission shall consider the education director’s
(c) The school shall be given an opportunity to correct the recommendations and determine if the instructor’s approval
deficiency within thirty (30) days. shall continue or be removed.
Section 6. Incorporation by Reference. (14) The commission shall notify the instructor and the school of
(1) "Brokerage Management Curriculum", 09/07 edition is its decision in writing.
incorporated by reference. (15) If probation has ended satisfactorily, the instructor’s approval
(2) This material may be inspected, copied, or obtained, subject shall be reinstated.
to applicable copyright law, at the Kentucky Real Estate (16) If the commission determines that instructor approval shall be
Commission, 10200 Linn Station Road, Suite 201, Louisville suspended, the instructor shall not be allowed to teach any
Kentucky 40223, Monday through Friday. commission-approved education courses unless approval is
reinstated.
201 KAR 11:460 Minimum rating requirements for (17) In any class with ten (10) or fewer participants for which the
instructors instructor receives at least one (1) evaluation below eighty-
RELATES TO: KRS 324.085 five (85) percent on a category, the commission shall not
Section 1. Each approved continuing and post-license education consider the highest and lowest course approval percentage
instructor shall: rating in order to ensure greater accuracy in the rating.
(1) Be approved by the Kentucky Real Estate Commission and be (18) The annual recertification of instructors and continuing and
in compliance with the provisions of 201 KAR 11:175; post-license education courses shall include an in-depth
(2) Enforce the KREC Guidelines for Classroom Management – review of the evaluations completed by the students and those
Form E103 as developed by the commission; and of any monitor that may have been present for the class.
(3) Comply with the Generally-Accepted Principles of Education (19) (a) Any instructor who has been suspended from teaching
(GAPE) – Form E104 developed by the Real Estate Educators continuing and post-license education courses may apply
Association and adopted by the Kentucky Real Estate for reinstatement by:
Commission as the standard for classroom presentation. 1. Submitting an application for approval to the
Section 2. Evaluation of Instructors. commission;
(1) Each education provider shall distribute an instructor 2. If the deficiency is in presentation, the instructor
evaluation form to each student and collect a Course attending an instructor development workshop
Evaluation – Form E108 from each student at the end of the approved by the commission upon request;
course. 3. If the deficiency is in the subject matter, the
(2) Within ten (10) days of course conclusion, the course provider instructor attending a prescribed number of credit
shall deliver all continuing education instructor evaluation hours in that subject approved by the commission
forms to the commission education director. upon request;
(3) If a course provider fails to submit all forms completed by 4. Submitting proof of attendance at the required
students and provided to the course provider, the commission course; and
shall suspend the course provider’s approval. 5. Providing written documentation of other steps
(4) All Course Evaluation – Form E108 forms shall be reviewed taken to improve the instructor’s knowledge and
by the commission. skills; and
(5) The commission education director shall review the course (b) After submission of the above documents and
approval percentage rating for each instructor. consideration by the commission, the commission shall
(6) An eighty-five (85) percent approval rating shall be required approve or deny the instructor’s request for
in each category of "instructor knowledge" and "instructor reinstatement.
presentation". Section 3. Incorporation by Reference. (1) The following material
(7) The comments section of the Course Evaluation – Form E108 is incorporated by reference:
forms shall be reviewed for other remarks concerning the (a) "KREC Guidelines for Classroom Management – Form
instructor’s performance. E103", 05/15 edition;
(8) After a second rating lower than eighty-five (85) percent on a (b) "Generally-Accepted Principles of Education (GAPE) – Form
category, the commission shall notify the instructor and the E104", 05/15 edition; and
course provider of the deficiency. (c) "Course Evaluation – Form E108", 05/15 edition.
(9) The next class taught by the instructor shall be monitored by a (2) This material may be inspected, copied, or obtained, subject
commission representative. The commission monitor shall to applicable copyright law, at the Kentucky Real Estate

37
 Commission, 10200 Linn Station Road, Suite 201, Louisville, known or reasonably determinable address, of the amount of
Kentucky 40223, Monday through Friday, 8 a.m. to 4:30 p.m. any refund due the tenant. In the event the landlord shall not
have received a response from the tenant within sixty (60)
Other Helpful Statutes & Regulations days from the sending of such notification, the landlord may
371.010 Statute of frauds; Contracts to be written remove the deposit from the account and retain it free from
-- No action shall be brought to charge any person:…. any claim of the tenant or any person claiming in his behalf.
(6) Upon any contract for the sale of real estate, or any lease
thereof for longer than one year; 207.250 Disclosure of HIV information in real estate
(8) Upon any promise, agreement, or contract for any transaction prohibited
commission or compensation for the sale or lease of any real (1) The fact that an occupant of real property is infected or has
estate or for assisting another in the sale or lease of any real been infected with human immunodeficiency virus or
estate. diagnosed with acquired human immunodeficiency syndrome
is not a material fact that shall be disclosed in a real estate
383.580 Security deposits transaction.
(1) All landlords of residential property requiring security (2) No cause of action shall arise against an owner of real estate
deposits prior to occupancy shall be required to deposit all or his agent, or any agent of a transferee of real property for
tenant’s security deposits in an account used only for that failure to disclose to the transferee that an occupant of that
purpose, in any bank or other lending institution subject to property was infected with human immunodeficiency virus or
regulation by the Commonwealth of Kentucky or any agency diagnosed with acquired human immunodeficiency syndrome.
of the U.S. Government. Prospective tenants shall be
informed of the location of the separate account and the 367.46951 Definitions for zero call list
account number. (1) “Telephone solicitation” means:
(2) Prior to tendering any consideration deemed to be a security (a) A live or recorded communication sent by a telephone or
deposit, the prospective tenant shall be presented with a message sent by a facsimile machine to a residential,
comprehensive listing of any then-existing damage to the unit mobile, or telephone paging device telephone number,
which would be the basis for a charge against the security including a call made by an automatic dialing or
deposit and the estimated dollar cost of repairing such recorded message device, for the purpose of:
damage. The tenant shall have the right to inspect the 1. Soliciting a sale of consumer goods or services,
premises to ascertain the accuracy of such listing prior to offering an investment, business, or employment
taking occupancy. The landlord and the tenant shall sign the opportunity, or offering a consumer loan to the
listing, which signatures shall be conclusive evidence of the person called;
accuracy of such listing, but shall not be construed to be 2. Obtaining information that will or may be used for
conclusive to latent defects. If the tenant shall refuse to sign the solicitation of a sale of consumer goods or
such listing, he shall state specifically in writing the items on services, the offering of an investment, business, or
the list to which he dissents, and shall sign such statement of employment opportunity, or the offering of a
dissent. consumer loan to the person called;
(3) At the termination of occupancy, the landlord shall inspect the 3. Offering the person called a prize, gift, or anything
premises and compile a comprehensive listing of any damage else of value, if payment of money or other
to the unit which is the basis for any charge against the consideration is required in order to receive the
security deposit and the estimated dollar cost of repairing prize or gift, including the purchase of other
such damage. The tenant shall then have the right to inspect merchandise or services or the payment of any
the premises to ascertain the accuracy of such listing. The processing fees, delivery charges, shipping and
landlord and the tenant shall sign the listing, which signatures handling fees, or other fees or charges; or
shall be conclusive evidence of the accuracy of such listing. 4. Offering the person called a prize, gift, or other
If the tenant shall refuse to sign such listing, he shall state incentive to attend a sales presentation for consumer
specifically in writing the items on the list to which he goods or services, an investment or business
dissents, and shall sign such statement of dissent. opportunity, or a consumer loan; or
(4) No landlord shall be entitled to retain any portion of a security (b) A live or recorded communication sent by a telephone,
deposit if the security deposit was not deposited in a separate facsimile machine, mobile telephone, or telephone
account as required by subsection (1) of this section and if the paging device in response to inquiries generated by
initial and final damage listings required by subsections (2) unrequested notifications sent by the merchant to persons
and (3) of this section are not provided. who have not previously purchased goods or services
(5) A tenant who disputes the accur acy of the final damage from the merchant or telemarketer or who have not
listing given pursuant to subsection (3) of this section may previously requested credit from the merchant, to a
bring an action in District Court. Tenant’s claim shall be prospective purchaser if the merchant or telemarketer
limited to those items from which the tenant specifically represents or implies to the recipient of the notification
dissented in accordance with the provisions of subsection (3) that any of the following applies:
of this section, or except as otherwise provided, and if the 1. That the recipient has in any manner been specially
tenant shall fail to sign the listing or specifically dissent in selected to receive the notification or the offer
accordance with subsection (3) of this section, the tenant shall contained in the notification;
not be entitled to recover any damages under this section. 2. That the recipient will receive a prize or gift if the
(6) In the event a tenant leaves not paying his last month’s rent recipient calls the merchant or telemarketer; or
and does not demand a return of his deposit, the landlord may, 3. That if the recipient buys one (1) or more items
after thirty (30) days, remove the deposit from the account from the merchant or telemarketer, the recipient will
and apply any such excess to the debt owing. also receive additional or other items of the same or
(7) In the event the tenant leaves not owing rent and having any a different type at no additional cost or for less than
refund due, the landlord shall send notification to the last the regular price of the items;
38
(1) “Telephone solicitation” does not mean the following: the services were performed, to secure the amount of the
(a) A telephone call made in response to an express request charges for services with interests as provided in KRS
of a person called, unless the request was made during a 360.040 and costs.
prior telephone solicitation; (2) The provisions of KRS 376.010(1) and (2) shall determine
(b) A telephone call made to the debtor or a party to the when a lien created under this section shall take precedence
contract in connection with the payment or performance over a mortgage or other contract lien or bona fide
of an existing debt or contract, the payment or conveyance for value without notice.
performance of which has not been completed at the time (3) No person who has not contracted directly with the owner or
of the call; his agent shall acquire a lien under this section.
(c) A telephone call to any person with whom the (4) Any lien provided for under this section shall be dissolved
telemarketer or merchant has a prior or existing business unless the claimant, within six (6) months after he ceases to
relationship, including but not limited to the solicitation provide services, files in the office of the county clerk of the
of contracts for the maintenance or repair of items county in which the property is situated a statement of the
previously purchased from the person making the amount due the claimant, with all just credits and setoffs
solicitation or on whose behalf the solicitation is made; known to him, together with a description of the property
(d) A telephone call made by the following: intended to be covered by the lien sufficiently accurate to
1. A merchant or telemarketer located in Kentucky to identify it, the name of the owner, if known, and whether the
a location outside of the Commonwealth of services were furnished by contract with the owner or with a
Kentucky; contractor or architect. This statement shall be subscribed and
2. A telephone call made by one (1) merchant to sworn to by the person claiming the lien or by someone in his
another;………………………………………… behalf.
367.46955 Prohibited telephone solicitation acts and (5) Any lien created under this section shall be dissolved unless
practices an action is brought to enforce the lien within twelve (12)
It is a prohibited telephone solicitation act or practice and a months from the day of filing the statement in the clerk’s
violation of KRS 367.46951 to 367.46999 for any person making a office as required by subsection (4) of this section. If the lien
telephone solicitation to engage in the following conduct . . . holder complies with all filing requirements under this
(15) Making or causing to be made an unsolicited telephone section, and does so within the time fixed, his lien shall be
solicitation call if the residential number for that telephone valid and effective against any creditor of, or bona fide or
appears in the current publication of the national Do Not other purchaser from, the owner of the property.
Call registry maintained by the United States federal (6) The provisions of this section shall in no way abridge or
Trade Commission; conflict with the provisions of KRS 376.210 which provide
for liens on public improvements, and any potential lien or
40 KAR 2:075 Commonwealth of Kentucky zero call list valid lien of a professional engineer, architect, landscape
. . . Section 2. Publication architect, real estate broker, or professional land surveyor on a
(1) Quarterly publication schedule. The Zero Call List shall be public improvement shall be governed by KRS 376.210.
published according to the following schedule: (7) No real estate broker shall acquire a lien under this section
(a) The first quarter shall be effective January 15-April 14, relative to newly constructed residential real estate unless the
and it shall be published on December 15; purchaser has agreed in writing to directly compensate such
(b) The second quarter shall be effective April 15-July 14, broker for performing brokerage services related to the
and it shall be published on March 15; transaction.
(c) The third quarter shall be effective July 15-October 14, (8) No real estate broker shall acquire a lien under this section
and it shall be published on June 15; and unless:
(d) The fourth quarter shall be effective October 15-January (a) The owner or the owner’s authorized agent:
14, and it shall be published on September 15. 1. Lists the subject property with the broker under the
(2) The Zero Call List shall be: terms of a written agreement to sell, lease, or
(a) Available in accordance with Section 4 of this otherwise convey any interest in the subject
administrative regulation; property; or
(b) Published on the Internet at website address 2. Agrees in a written agreement to pay the broker a
www.kycall0.com; and fee for his or her services as a buyer’s
(c) Available in electronic and hard copy. A request for an representative; and
electronic or hard copy of the Zero Call List shall require (b) The broker or the broker’s affiliated sales associate
a minimum of five (5) business days notice to the provides licensed services that result, during the term of
division. a written agreement described in paragraph (a) of this
subsection, in the procuring of a person or entity ready,
willing, and able to purchase, lease, or otherwise accept a
376.075 Engineers’, architects’, landscape architects’,
conveyance of the property or any interest in the
real estate brokers’ and land surveyors’ liens – When property:
lien not required of real estate broker – Filing statement 1. Upon terms contained in a written agreement
of amount claimed described in paragraph (a) of this subsection; or
(1) Any professional engineer, licensed architect, licensed 2. Upon terms that are otherwise acceptable to the
landscape architect, real estate broker, or professional land owner or the owner’s authorized agent as evidenced
surveyor who performs professional services or services as by a written agreement to convey any interest in the
defined in KRS 322.010(4) for professional engineers, KRS property signed by the owner or owner’s authorized
323.010(3) for architects, KRS 323A.010(3) for landscape agent.
architects, KRS 324.010(1) for real estate brokers, and KRS
322.010(10) for professional land surveyors shall have a lien
on the building, structure, land, or project relative to which
39
381.9201 Applicability of KRS 381.9201, 381.9205, and necessary to enable the unit owner to comply with subsection
381.9207 -- Modification or waiver by agreement -- (1) of this section. A unit owner or unit owner’s agent
Certificate not required in certain cases. providing a purchaser with the certificate issued pursuant to
(1) This section and KRS 381.9205 and 381.9207 apply to all this subsection shall not be liable to the purchaser for
units subject to KRS 381.9101 to 381.9207, except as erroneous information provided by the association and
provided in subsection (2) of this section or as modified or included in the certificate.
waived by agreement of purchasers of units in a condominium (3) A unit owner or unit owner’s agent shall not be liable to a
in which all units are restricted to nonresidential use. purchaser for the failure or delay of the association to provide
(2) The certificate referred to in KRS 381.9203 shall not be the certificate in a timely manner, but the sales contract is
required in the case of: voidable by the purchaser until the certificate has been
(a) A gratuitous disposition of a unit; provided and for five (5) days thereafter or until conveyance,
(b) A disposition pursuant to court order; whichever first occurs.
(c) A disposition by a government or governmental agency; (4) An association may not deny the validity of any statement in
(d) A disposition by foreclosure or deed in lieu of the certificate.
foreclosure; (5) Failure to provide a certificate does not void a deed to a
(e) A disposition to a person in the business of selling real purchaser.
estate who intends to offer those units to purchasers, and KRS 286.8-010 to 286.8-285 (Kentucky’s Mortgage
where the purchaser has modified or waived the
Licensing and Regulation Act)
requirements of KRS 381.9203 by agreement; or
(f) A disposition that may be canceled at any time and for
286.8-290 Mortgage loan originators – Applicability of
any reason by the purchaser without penalty.
and exclusion from requirements of subtitle
381.9203 Documentation to be furnished by seller of unit (1) The following mortgage loan originators shall be subject to
-- Certificate. subsections (3) and (4) of this section, but shall be exempt
(1) Except as provided in KRS 381.9201(2), a seller of a unit from the registration and regulatory requirements of KRS
shall furnish to a purchaser, upon request and before 286.8-255:
execution of any contract for sale of a unit, or otherwise ...
before conveyance, a copy of the declaration, other than the (e) Any natural person, including all entities owned in whole
plats and plans, and a copy of the bylaws, the rules or or part by that natural person, that make no more than
regulations of the association, and a certificate, current to the four (4) loans each calendar year: and
date of issuance and signed and dated by the association’s ...
manager or authorized agent, containing:
(a) A statement disclosing the effect on the proposed 286.8-020 Exemptions
disposition of any right of first refusal or other restraint (1) The following mortgage loan companies and mortgage loan
on the free alienability of the unit; brokers shall be subject to KRS 286.8-046, 286.8-180, 286.8-
(b) A statement setting forth the amount of the monthly 220(1), and subsections (12), (13), and (14) of this section,
common expense assessment and any unpaid common but shall be exempt from all other provisions of this subtitle:
expense, emergency assessment, or special assessment ...
currently due and payable from the selling unit owner; (d) Any person other than a natural person, including any
(c) A statement of any other fees payable by unit owners; affiliate of that person, that makes in the aggregate no
(d) A statement of any capital expenditures anticipated by more than four (4) mortgage loans within a calendar year
the association for the current and, if known, next two with its own funds and secured by residential real
(2) fiscal years; property owned by the person making the mortgage loan,
(e) A statement of the amount of any reserves for capital provided that the mortgage loan is made without the
expenditures, if any, and of any portions of those intent to resell the mortgage loan, and provided that the
reserves designated by the association for any specified person does no hold itself out to the public as being
projects; primarily in the mortgage loan business.
(f) The most recent regularly prepared balance sheet and
income and expense statement, if any, of the association;
369.101 Short title for KRS 369.101 to 369.120.
(g) The current operating budget of the association;
KRS 369.101 to 369.120 may be cited as the Uniform
(h) The date of the most current financial report prepared for
Electronic Transactions Act.
the association pursuant to KRS 381.9197;
...
(i) A statement of any unsatisfied judgments against the
association, the status of any pending suits in which the
association is a defendant, or any pending suits in which 369.105 Use of electronic records and electronic
the association is a named party and the amount in signatures -- Variation by agreement.
dispute or contest is more than ten thousand dollars (1) KRS 369.101 to 369.120 does not require a record or
($10,000); signature to be created, generated, sent, communicated,
(j) A statement describing any insurance coverage received, stored, or otherwise processed or used by electronic
maintained by the association or an attachment of a means or in electronic form.
certificate of insurance issued to the association; and (2) KRS 369.101 to 369.120 applies only to transactions between
(j) If any portion of the condominium is situated upon a parties each of which has agreed to conduct transactions by
leasehold estate, a statement of the remaining term of electronic means. Whether the parties agree to conduct a
any leasehold estate affecting the condominium and the transaction by electronic means is determined from the
provisions governing any extension or renewal thereof. context and surrounding circumstances, including the parties'
(2) The association shall, within ten (10) days after a request by a conduct.
unit owner, furnish a certificate containing the information (3) A party that agrees to conduct a transaction by electronic
means may refuse to conduct other transactions by electronic
40
 means. The right granted by this subsection may not be
waived by agreement.
(4) Except as otherwise provided in KRS 369.101 to 369.120, the
effect of any of its provisions may be varied by agreement.
The presence in certain provisions of KRS 369.101 to
369.120 of the words "unless otherwise agreed," or words of
similar import, does not imply that the effect of other
provisions may not be varied by agreement.
(5) Whether an electronic record or electronic signature has legal
consequences is determined by KRS 369.101 to 369.120 and
other applicable law.
369.106 Construction and application of KRS 369.101 to
369.120.
KRS 369.101 to 369.120 must be construed and applied:
(1) To facilitate electronic transactions consistent with other
applicable law;
(2) To be consistent with reasonable practices concerning
electronic transactions and with the continued expansion of
those practices; and
(3) To effectuate its general purpose to make uniform the law
with respect to the subject of KRS 369.101 to 369.120 among
states enacting it.
369.107 Legal recognition of electronic records,
electronic signatures, and electronic contracts.
(1) A record or signature may not be denied legal effect or
enforceability solely because it is in electronic form.
(2) A contract may not be denied legal effect or enforceability
solely because an electronic record was used in its formation.
(3) If a law requires a record to be in writing, an electronic record
satisfies the law.
(4) If a law requires a signature, an electronic signature satisfies
the law.
...

41