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Kentucky Contract for Deed Law

Contract for Deed – General – Kentucky

Kentucky Statutes

TITLE XXXII OWNERSHIP AND CONVEYANCE OF PROPERTY
CHAPTER 381 TITLE TO PROPERTY AND RESTRICTIONS ON USE, OWNERSHIP AND ALIENATION

381.170. Consideration paid by other than grantee – Effect. –

When a deed is made to one (1) person, and the consideration is paid by another no use or trust results in favor of the latter unless the grantee takes a deed in his own name without the consent of the person paying the consideration, or unless the grantee in violation of a trust purchases the lands deeded with the effects of another person. Such deeds are fraudulent as against the existing debts and liabilities of the person paying the consideration.

Effective: October 1, 1942

History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky.

TITLE XXXII OWNERSHIP AND CONVEYANCE OF PROPERTY
CHAPTER 382 CONVEYANCES AND ENCUMBRANCES

382.110. Recording of deeds and mortgages – Place of recording – Use of certified copies of original records – Contents of deed.

(1) All deeds, mortgages and other instruments required by law to be recorded to be effectual against purchasers without notice, or creditors, shall be recorded in the county clerk’s office of the county in which the property conveyed, or the greater part thereof, is located.

(2) No county clerk or deputy county clerk shall admit to record any deed of conveyance of any interest in real property equal to or greater than a life estate, unless the deed plainly specifies and refers to the next immediate source from which the grantor derived title to the property or the interest conveyed therein.

(3) An authentic photocopy of any original record may be certified, as a true, complete, unaltered copy of the original record on file by the official public custodian of the record. A certified copy of a document certified by the official public custodian of that document may be submitted for filing in any other filing officer’s jurisdiction as though it were the original record. However, no county clerk or deputy county clerk shall accept for filing any original document or certified copy of any document unless the original document and its certified copy conforms to all statutory requirements for filing the document under KRS Chapter 382. The provisions of this subsection shall apply only to a record generated and filed in Kentucky, and only if the certified copy thereof is to be utilized in Kentucky. If the record is a foreign record or a Kentucky record to be filed or utilized in a foreign jurisdiction, then this subsection shall not apply and applicable federal, Kentucky, or foreign law shall apply.

(4) If the source of title is a deed or other recorded writing, the deed offered for record shall refer to the former deed or writing, and give the office, book and page where recorded, and the date thereof. If the property or interest therein is obtained by inheritance or in any other way than by recorded instrument of writing, the deed offered for record shall state clearly and accurately how and from whom the title thereto was obtained by the grantor.

(5) If the title to the property or interest conveyed is obtained from two (2) or more sources, the deed offered for record shall plainly specify and refer to each of the sources in the manner provided in subsections (2) and (4), and shall show which part of the property, or interest therein, was obtained from each of the sources.

(6) No grantor shall lodge for record, and no county clerk or deputy shall receive and permit to be lodged for record, any deed that does not comply with the provisions of this section.

(7) No clerk or deputy clerk shall be liable to the fine imposed by subsection (1) of KRS 382.990 because of any erroneous or false references in any such deed, nor because of the omission of a reference required by law where it does not appear on the face of such deed that the title to the property or interest conveyed was obtained from more than one (1) source.

(8) This section does not apply to deeds made by any court commissioner, sheriff or by any officer of court in pursuance of his duty as such officer, nor to any deed or instrument made and acknowledged before March 20, 1928. No deed shall be invalid because it is lodged contrary to the provisions of this section.

(9) A mortgage holder shall file a deed in lieu of foreclosure in the county clerk’s office of the county in which the property conveyed, or the greater part thereof, is located, no later than forty-five (45) days after the date the deed in lieu of foreclosure is executed.

Effective: July 12, 2012

History: Amended 2012 Ky. Acts ch. 44, sec. 1, effective July 12, 2012. — Amended
2005 Ky. Acts ch. 69, sec. 2, effective June 20, 2005. — Recodified 1942 Ky. Acts
ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 495.

TITLE XXXII OWNERSHIP AND CONVEYANCE OF PROPERTY
CHAPTER 382 CONVEYANCES AND ENCUMBRANCES

382.120. Real property acquired by descent – Requirements for conveyance of – Indexing – Clerk’s fees.

(1) Before any deed to real property, the title to which has passed to the grantor under the laws of descent, is filed for record the grantor or grantee, or the agent or attorney or either, shall present to the county clerk the affidavit of the grantor or any one (1) of the heirs at law or next of kin of the ancestor of the grantor, or of two (2) residents of this state, each of whom has personal knowledge of the facts, which affidavit shall set forth:

(a) The name of the ancestor;

(b) The date of the ancestor’s death;

(c) Whether the ancestor was married or single, and if married, the name of the surviving spouse and his or her address;

(d) The place of residence at the time of the ancestor’s death, if known to the affiant or affiants;

(e) The fact that the ancestor died intestate; and

(f) The names, ages and addresses, so far as known or ascertainable, of each of such ancestor’s heir at law and next of kin, who by his death inherited such real property, and the relationship of each to the ancestor and the interest in such real property inherited by each.

(2) The affidavit shall be filed with the clerk of the county in which the real property is situated, at or before the time when the deed or conveyance is filed with the clerk for record, and shall be recorded in the record of deeds, and indexed in the general index of deeds in the name of such ancestor as grantor, and in the name of each of such heirs at law or next of kin as grantees, in the same manner as if such names occurred in a deed of conveyance from the ancestor to the heirs at law. For indexing and recording the affidavit, the clerk shall receive the same fees as are allowed for recording and indexing deeds.

(3) No county clerk or deputy clerk shall receive or permit to be lodged for record any such deed until the affidavit has been presented to him, but nothing in this section shall prevent the recording from being legal of any such deed lodged for record prior to the filing of the affidavit.

Effective: July 15, 1980

History: Amended 1980 Ky. Acts ch. 259, sec. 2, effective July 15, 1980. — Recodified
1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 495a-1, 495a-2.

TITLE XXXII OWNERSHIP AND CONVEYANCE OF PROPERTY
CHAPTER 382 CONVEYANCES AND ENCUMBRANCES

382.130. When deeds executed in this state to be admitted to record. –

Deeds executed in this state may be admitted to record:

(1) On the acknowledgment, before the proper clerk, by the party making the deed;

(2) By the proof of two (2) subscribing witnesses, or by the proof of one (1) subscribing witness, who also proves the attestation of the other;

(3) By the proof of two (2) witnesses that the subscribing witnesses are both dead; and also like proof of the signature of one (1) of them and of the grantor;

(4) By like proof that both of the subscribing witnesses are out of the state, or that one

(1) is so absent and the other is dead; and also like proof of the signature of one (1) of the witnesses and of the grantor; or

(5) On the certificate of a county clerk of this state, or any notary public, that the deed has been acknowledged before him by the party making the deed or proved before him in the manner required by subsection (2), (3) or (4).

Effective: October 1, 1942

History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky.
Stat. sec. 501.

TITLE XXXII OWNERSHIP AND CONVEYANCE OF PROPERTY
CHAPTER 382 CONVEYANCES AND ENCUMBRANCES

382.135. Statement of consideration or market value required in deed to real property – Exceptions.

(1) In addition to any other requirement imposed by law, a deed to real property shall contain the following:

(a) The mailing addresses of the grantor and grantee;

(b) A statement of the full consideration;

(c) A statement indicating the in-care-of address to which the property tax bill for the year in which the property is transferred may be sent; and

(d) 1. In the case of a transfer other than by gift, or with nominal or no consideration a sworn, notarized certificate signed by the grantor or his agent and the grantee or his agent, or the parent or guardian of a person under eighteen (18) years old, that the consideration reflected in the deed is the full consideration paid for the property; or

2. In the case of a transfer either by gift or with nominal or no consideration, a sworn, notarized certificate signed by the grantor or his agent and the grantee or his agent, or the parent or guardian of a person under eighteen (18) years old, stating that the transfer is by gift and setting forth the estimated fair cash value of the property.

(2) The deed filing requirements listed in subsection (1)(b), (c), and (d) of this section shall not apply to:

(a) Deeds which only convey utility easements;

(b) Deeds which transfer property through a court action pursuant to a divorce proceeding;

(c) Deeds which convey rights-of-way that involve governmental agencies;

(d) Deeds which convey cemetery lots;

(e) Deeds which correct errors in previous deeds conveying the same property from the same grantor to the same grantee; or

(f) Deeds which convey real property to a local airport board.

(3) In the case of an exchange of properties, the fair cash value of the property being exchanged shall be stated in the body of the deed.

(4) In the event of a transfer of property by will or under the laws of intestate succession, the personal representative of the estate, prior to closing out the estate, shall file an affidavit with the county clerk of each county in which any of the property is located, which shall contain the following:

(a) The names and addresses of the persons receiving each property passing by will or intestate succession; and

(b) The full or fair market value of each property as estimated or established for any purpose in the handling of the estate, or a statement that no such values were estimated or established.

(5) No county clerk or deputy clerk shall lodge for record, and no county clerk or deputy shall receive and permit to be lodged for record, any deed that does not comply with the provisions of this section.

Effective: July 15, 2010

History: Amended 2010 Ky. Acts ch. 32, sec. 1, effective July 15, 2010. — Amended
2008 Ky. Acts ch. 143, sec. 3, effective August 1, 2008. — Amended 2005 Ky. Acts
ch. 171, sec. 1, effective June 20, 2005. — Amended 1992 Ky. Acts ch. 263, sec. 8,
effective July 14, 1992. — Created 1990 Ky. Acts ch. 411, sec. 4, effective July 13,
1990.

TITLE XXXII OWNERSHIP AND CONVEYANCE OF PROPERTY
CHAPTER 382 CONVEYANCES AND ENCUMBRANCES

382.170. Recording of deeds executed according to laws of United States.

The requirements of this chapter as to the acknowledgment or proof of the execution of deeds, shall not apply to deeds made or executed under and in accordance with the laws of the United States. Such deeds, when executed, shall be entitled to be recorded in this state, and shall have the same force and effect as though they had been acknowledged or proved and recorded in accordance with the laws of this state.

Effective: October 1, 1942

History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky.
Stat. sec. 516.

TITLE XXXII OWNERSHIP AND CONVEYANCE OF PROPERTY
CHAPTER 382 CONVEYANCES AND ENCUMBRANCES

382.250. Acknowledgment before deputy clerk – Duty of clerk.

If the deputy of any county clerk takes the acknowledgment of a deed or other instrument, and writes thereon the certificate of acknowledgment, the instrument or deed, together with the certificate of the deputy, shall be recorded. If the deputy only endorses a memorandum of the acknowledgment on the deed or instrument, then the principal clerk shall write the certificate as if the acknowledgment had been taken before him, and the deed or instrument shall be as valid as if the certificate had been written in full by the deputy.

Effective: October 1, 1942

History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky.
Stat. sec. 515.

TITLE XXXII OWNERSHIP AND CONVEYANCE OF PROPERTY
CHAPTER 382 CONVEYANCES AND ENCUMBRANCES

382.270. Instruments not valid against purchasers or creditors unless recorded.

No deed or deed of trust or mortgage conveying a legal or equitable title to real property shall be lodged for record and, thus, valid against a purchaser for a valuable consideration, without notice thereof, or against creditors, until such deed or mortgage is acknowledged or proved according to law. However, if a deed or deed of trust or mortgage conveying a legal or equitable title to real property is not so acknowledged or proved according to law, but is or has been otherwise lodged for record, such deed or deed of trust or mortgage conveying a legal or equitable title to real property or creating a mortgage lien on real property shall be deemed to be validly lodged for record for purposes of KRS Chapter 382, and all interested parties shall be on constructive notice of the contents thereof. As used in this section “creditors” includes all creditors irrespective of whether or not they have acquired a lien by legal or equitable proceedings or by voluntary conveyance.

Effective: July 15, 2010

History: Amended 2010 Ky. Acts ch. 155, sec. 2, effective July 15, 2010. — Amended
2006 Ky. Acts ch. 183, sec. 16, effective July 12, 2006. — Amended 1962 Ky. Acts
ch. 83, sec. 16. — Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1,
1942, from Ky. Stat. sec. 496.

TITLE XXXII OWNERSHIP AND CONVEYANCE OF PROPERTY
CHAPTER 382 CONVEYANCES AND ENCUMBRANCES

382.330. Instrument not to be recorded unless date of maturity shown – Exception.

No county clerk shall record a deed or deed of trust or mortgage covering real property by which the payment of any indebtedness is secured unless the deed or deed of trust or mortgage states the date and the maturity of the obligations thereby secured which have been already issued or which are to be issued forthwith. In the case of obligations due on demand, the requirement of stating the maturity thereof shall be satisfied by stating that such obligations are “due on demand.”

Effective: June 17, 1978

History: Amended 1978 Ky. Acts ch. 373, sec. 1, effective June 17, 1978. — Amended
1962 Ky. Acts ch. 83, sec. 17. — Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 511a-1.

TITLE XXXII OWNERSHIP AND CONVEYANCE OF PROPERTY
CHAPTER 382 CONVEYANCES AND ENCUMBRANCES

382.290. Recording of mortgages and deeds retaining liens – Assignment – Discharge – Form of record – Clerk’s fee.

(1) In recording mortgages and deeds in which liens are retained (except railroad mortgages securing bonds payable to bearer), there shall be left a blank space immediately after the record of the deed or mortgage of at least two (2) full lines for each note or obligation named in the deed or mortgage, or in the alternative, at the option of the county clerk, a marginal entry record may be kept for the same purposes as the blank space. Each entry in the marginal entry record shall be linked to its respective referenced instrument in the indexing system for the referenced instruments.

(2) No county clerk or deputy county clerk shall admit to record any mortgage or deed in which liens are retained unless the mortgage or deed in which a lien is retained plainly specifies and refers to the immediate source from which the mortgagor or grantor derived title to the property or the interest encumbered therein.

(3) When any note named in any deed or mortgage is assigned to any other person, the assignor may, over his own hand, attested by the clerk, note such assignment in the blank space, or in a marginal entry record, beside a listing of the book and page of the document being assigned, and when any one (1) or more of the notes named in any deed or mortgage is paid, or otherwise released or satisfied, the holder of the note, and who appears from the record to be such holder, may release the lien, so far as such note is concerned, by release, over his own hand, attested by the clerk. Each entry in the marginal entry record shall be linked to its respective referenced instrument in the indexing system for the referenced instrument.

(4) No person who does not, from such record or assignment of record, appear at the time to be the legal holder of any note secured by lien in any deed or mortgage, shall be permitted to release the lien securing any such note, and any release made in contravention of this section shall be void; but this section does not change the existing law if no such entry is made.

(5) For each assignment and release so made and attested by the clerk, he may charge a fee pursuant to KRS 64.012 to be paid by the person executing the release or noting the assignment.

(6) If such assignment of a note is made by separate instrument or by deed assigning the note, or in a marginal entry record, the instrument of writing or deed or marginal entry record shall set forth the date of notes assigned, a brief description of notes, the name and post office address of assignee, and the deed book and page of the instrument wherein the lien or mortgage is recorded and the clerk or deputy clerk receiving such instrument of writing or deed of assignment for record shall at the option of the county clerk immediately either link the assignment and its filing location to its respective referenced instrument in the indexing system for the referenced instrument, or endorse at the foot of the record in the space provided in subsection (1) of this section, “The notes mentioned herein (giving a brief description of notes assigned) have been transferred and assigned to (insert name and address of assignee) by deed of assignment (or describe instrument) dated and recorded in deed book …. page ….,” and attest such certificate. For making such notation on the record the clerk shall be allowed a fee pursuant to KRS 64.012 for each notation so made, to be paid by the party filing the instrument of writing or deed of assignment.

(7) No holder of a note secured by lien retained in either deed or mortgage shall lodge for record, and no clerk or deputy clerk shall receive and permit to be lodged for record, any deed or instrument of writing that does not comply with the provisions of this section.

Effective: July 15, 2016

History: Amended 2016 Ky. Acts ch. 11, sec. 3, effective July 15, 2016. — Amended
2015 Ky. Acts ch. 65, sec. 1, effective June 24, 2015. — Amended 1982 Ky. Acts ch.
323, sec. 2, effective July 15, 1982. — Amended 1978 Ky. Acts ch. 84, sec. 15,
effective June 17, 1978. — Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 498a.

TITLE XXXII OWNERSHIP AND CONVEYANCE OF PROPERTY
CHAPTER 382 CONVEYANCES AND ENCUMBRANCES

382.360. Discharge of liens by deed or mortgage – Effect.

(1) Liens by deed or mortgage may be discharged by an entry acknowledging their satisfaction on the margin of the record thereof, or in the alternative, at the option of the county clerk, in a marginal entry record, signed by the person entitled thereto, or his or her personal representative or agent, and attested by the clerk, or may be discharged by a separate deed of release, which shall recite the date of the instrument and deed book and the page wherein it is recorded. Such release in the case of a mortgage or deed of trust shall have the effect to reinstate the title in the mortgagor or grantor or person entitled thereto. Each entry in the marginal entry record shall be linked to its respective referenced instrument in the indexing system for the referenced instruments.

(2) If a lien or mortgage is released by a deed of release, the clerk shall immediately, at the option of the clerk, either link the release and its filing location to its respective referenced instrument in the indexing system for the referenced instrument, or endorse on the margin of the record wherein the lien is retained “Released by deed of release (stating whether in whole or in part) lodged for record (giving date, deed book and page wherein such deed of release may be found)” and the clerk shall also attest such certificate. The clerk shall cause the original deed of release to be delivered to the mortgagor or grantor or person entitled thereto.

(3) When a mortgage is assigned to another person, the assignee shall file the assignment for recording with the county clerk within thirty (30) days of the assignment and the county clerk shall attest the assignment and shall note the assignment in the blank space, or in a marginal entry record, beside a listing of the book and page of the document being assigned. Provided, however, that an assignee that reassigns the note prior to the thirtieth day after first acquiring the assignment may request that the subsequent assignee file the unfiled assignment with the new reassignment.

(4) Delivering an assignment to the assignee or a lien release to the mortgagor shall not substitute for filing the assignment or release with the county clerk, as required by this section.

(5) Notwithstanding the provisions of this section, nothing in this chapter shall require the legal holder of any note secured by lien in any deed or mortgage to file a release of any mortgage when the mortgage securing such paid note also secures a note or other obligation which remains unpaid.

(6) Failure of an assignee to record a mortgage assignment shall not affect the validity or perfection, or invalidity or lack of perfection, of a mortgage lien under applicable law.

Effective: July 12, 2006

History: Amended 2006 Ky. Acts ch. 183, sec. 17, effective July 12, 2006. — Amended
1982 Ky. Acts ch. 323, sec. 3, effective July 15, 1982. — Recodified 1942 Ky. Acts
ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 498.

TITLE XXXII OWNERSHIP AND CONVEYANCE OF PROPERTY
CHAPTER 382 CONVEYANCES AND ENCUMBRANCES CONSERVATION EASEMENTS

382.990. Penalties.

(1) Any grantor of a deed or any holder of a note who lodges for record a deed, instrument, or deed assigning a note or a deed of release or an instrument wherein there is a release, and any county clerk or deputy county clerk who receives and permits to be lodged for record any such instrument or deed contrary to the provisions of KRS 382.110, 382.120, 382.290, or 382.360, shall be guilty of a violation; the clerk or deputy who actually receives and files the instrument for record shall incur the penalty, but no clerk or deputy shall be fined because of any false or erroneous statement in the instrument filed.

(2) Any person who willfully and fraudulently makes affidavit to any statement mentioned in KRS 382.120, which is false, knowing the statement to be false, shall be guilty of a Class A misdemeanor, and in addition shall be liable to any person who may be injured by the making, filing, recording, or use of the affidavit.

(3) Any person who causes to be recorded in a county clerk’s office a deed, deed of trust, or mortgage in violation of KRS 382.330, or fails to file the statement required by KRS 382.380, shall be guilty of a Class A misdemeanor.

(4) Any county clerk who records a deed or mortgage in violation of KRS 382.330 shall be guilty of a violation.

(5) Any county clerk who, by himself or deputy, fails to perform any duty enjoined upon him by any of the provisions of KRS 382.110, 382.160, 382.180 to 382.200, 382.210, 382.250, 382.300 to 382.320, 382.360, or 382.370 shall be guilty of a violation.

(6) Any person who knowingly and intentionally gives a false name or address in any instrument or assignment mentioned in KRS 382.430, shall be guilty of a Class A misdemeanor.

(7) Any county clerk who fails to perform his duties under KRS 382.430, shall be guilty of a violation.

(8) Any person who willfully and fraudulently gives a false statement as to the full actual consideration of property or the full estimated value under KRS 382.135, shall be guilty of a Class D felony.

(9) Any mortgage holder that fails to file a deed in lieu of foreclosure pursuant to KRS 382.110(9) shall be guilty of a violation.

Effective: July 12, 2012

History: Amended 2012 Ky. Acts ch. 44, sec. 2, effective July 12, 2012. — Amended
1992 Ky. Acts ch. 463, sec. 44, effective July 14, 1992. — Amended 1990 Ky. Acts
ch. 411, sec. 5, effective July 13, 1990. — Recodified 1942 Ky. Acts ch. 208, sec. 1,
effective October 1, 1942, from Ky. Stat. secs. 495, 495a-3, 498, 498a, 511a-3, 522, 4051a.
Kentucky Case Law

When a typical installment land contract is used as the means of financing the purchase of property, legal title to the property remains in the seller until the buyer has paid the entire contract price or some agreed-upon portion thereof, at which time the seller tenders a deed to the buyer. However, equitable title passes to the buyer when the contract is entered. The seller holds nothing but the bare legal title, as security for the payment of the purchase price. Sebastian v. Floyd, 585 S.W.2d 381 (1979).

There is no practical distinction between the land sale contract and a purchase money mortgage, in which the seller conveys legal title to the buyer but retains a lien on the property to secure payment. The significant feature of each device is the seller’s financing the buyer’s purchase of the property, using the property as collateral for the loan. Id. at 381.

Where a purchaser of property has given a mortgage and subsequently defaults on his payments, his entire interest in the property is not forfeited. The mortgagor has the right to redeem the property by paying the full debt plus interest and expenses incurred by the creditor due to default. In order to cut off the mortgagor’s right to redeem, the mortgagee must request a court to sell the property at public auction. From the proceeds of the sale, the mortgagee recovers the amount owed him on the mortgage, as well as the expenses of bringing suit; the mortgagor is entitled to the balance, if any. Id. at 381.

The modern trend is for courts to treat land sale contracts as analogous to conventional mortgages, thus requiring a seller to seek a judicial sale of the property upon the buyer’s default. Id.

A conditional land contract in effect creates a vendor’s lien in the property to secure the unpaid balance owed under the contract. This lien is closely analogous to a mortgage. In fact, the vendor is commonly referred to as an “equitable mortgagee.” In view of this characterization of the vendor as a lien holder, it is only logical that such a lien be enforced through foreclosure proceedings. Id.


Inside Kentucky Contract for Deed Law