324.111 Escrow account of broker -- Interest -- Audit -- Contract deposit release --
447 words·~2 min read·
/ky/324-111A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Separate property management accounts.
(1)A principal broker shall maintain an escrow account or accounts, separate from the
individual or office account, in which all contract deposits and money belonging to
others shall be deposited without unreasonable delay. The escrow accounts shall be
maintained within the State of Kentucky and shall be identified to the commission
in writing. Each principal broker shall advise the commission, in writing, if any
overdraft occurs in the escrow account for any reason other than service charges
instituted by the bank, and which is not corrected within seventy-two
(72)hours of
the broker receiving notice.
(2)The broker may place the deposit in an interest-bearing account or instrument. The
interest earned shall accrue to the person agreed to in writing by all parties.
(3)No checks shall be drawn against uncollected deposits in the escrow account.
(4)None of the contract deposits shall be withdrawn until the contract has been
terminated by performance, by agreement in writing between all parties, or by order
of a court of competent jurisdiction, except as permitted in subsection
(6)of this
section.
(5)Upon licensure and each renewal, the principal broker shall sign a permit giving the
commission the permission to audit all his or her escrow accounts.
(6)Upon being notified that one
(1)or more parties to a contract intends not to
perform, the broker may initiate the release process. The release process shall
require the broker to notify all parties at their last known address by certified mail
that the contract deposit shall be distributed to the parties specified in the letter
unless all parties enter into a written mutual release, or unless one
(1)or more of the
parties initiate litigation within sixty
(60)days of the mailing date of the certified
letter. If neither buyer nor seller initiates litigation or enters into a written release
within sixty
(60)days of the mailing date of the certified letter, the broker may
release the deposit to the party identified in the certified letter without penalty under
this section and without civil liability in the courts of the Commonwealth of
Kentucky.
(7)All principal brokers whose companies engage in property management shall
maintain property management accounts separate from all other accounts or
specifically indicate in all escrow records if funds are property management funds.
(8)A broker or sales associate who owns rental property shall not be required to use the
principal broker's management account for the rental property, unless required by
the principal broker.
(9)If any licensee is alleged to have committed an escrow account violation that
warrants emergency action, the commission may conduct an emergency hearing as
authorized by KRS 324.150(1)(b).