367.354 Residential real property service agreements -- Prohibitions --
803 words·~4 min read·
/ky/367-354A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Applicability -- Enforcement and penalties -- Administrative regulations.
(1)As used in this section:
(a)"Residential real property" means real property located in this state that is:
1. Used primarily for personal, family, or household purposes; and
2. Improved by one
(1)to four
(4)dwelling units;
(b)"Service agreement" means an agreement under which an owner of residential
real property is required, in connection with the purchase or sale of the
property, to:
1. Pay a real estate sales commission to a specified service provider;
2. Use a specified service provider to list the property for sale; or
3. Receive other real estate brokerage services from a specified service
provider; and
(c)"Service provider" means a person, as defined in KRS 367.110, that:
1. Is entitled to a real estate sales commission or other payment for real
estate brokerage services under a service agreement; or
2. Is required or entitled to:
a. List residential real property for sale under a service agreement; or
b. Otherwise provide real estate brokerage services under a service
agreement.
(2)A service agreement shall not:
(a)Provide for performance under the agreement, or contain any rights or
obligations that may be exercised or performed, more than two
(2)years after
the date the agreement becomes effective, except this paragraph shall not bar
enforcement of an otherwise valid agreement in accordance with KRS
413.160 or another applicable statute of limitations;
(b)Except as otherwise provided under KRS 376.075 and 426.720:
1. Be binding on future owners of interests in the residential real property
or otherwise purport to run with the land;
2. Create or impose a lien, encumbrance, or other real property interest on
the residential real property; or
3. Require or permit recording of the agreement or any notice or
memorandum of the agreement;
(c)To the extent permitted under federal law, restrict the resolution of any
disputes, claims, or controversies to binding arbitration or any other form of
binding alternative dispute resolution;
(d)Include a waiver by the residential real property owner or owners of any
rights to class action relief; or
(e)Allow for assignment of the service provider's rights under, or interest in, the
agreement without notice to, and written agreement of, the residential real
property owner or owners.
(a)Any provision of a service agreement or a notice or memorandum of a service
agreement, whether or not recorded, that violates subsection
(2)of this section
shall:
1. Be void and unenforceable; and
2. Not bind title to residential real property or run with the land.
(b)This subsection shall be:
1. Retroactively applied to service agreements, and notices or
memorandums of service agreements, entered or recorded prior to April
4, 2024; and
2. Prospectively applied to service agreements, and notices or
memorandums of service agreements, entered or recorded on or after
April 4, 2024.
(a)A service provider shall not, on or after April 4, 2024, record, or cause to be
recorded, a service agreement or a notice or memorandum of a service
agreement, except as otherwise provided in KRS 376.075 and 426.720.
(b)1. Any service provider who violates this subsection shall be guilty of a
Class B misdemeanor, unless the conduct prohibited by this subsection
constitutes another crime that provides for greater punishment.
2. This paragraph may be enforced by the Attorney General or any
Commonwealth's attorney or county attorney of appropriate jurisdiction.
(c)Any person with an interest in residential real property that is subject to a
service agreement, or a notice or memorandum of a service agreement,
recorded in violation of this subsection may institute an action against the
service provider in any court of competent jurisdiction to recover:
1. Actual damages arising from the recording; and
2. Attorney fees and costs incurred in the action.
(a)A violation of this section on or after April 4, 2024, shall be deemed to be an
unfair, false, misleading, or deceptive act or practice in the conduct of trade or
commerce in violation of KRS 367.170.
(b)All of the remedies, powers, and duties provided to the Attorney General or
any other person under KRS 367.110 to 367.300, and the penalties provided
in KRS 367.990, pertaining to acts and practices declared unlawful by KRS
367.170, shall apply with equal force and effect to a violation of this section.
(a)The remedies and penalties prescribed in this section shall be cumulative.
(b)Nothing in this section shall be construed to limit or restrict the powers,
duties, remedies, or penalties available to the Attorney General, the
Commonwealth, or any other person under any other statutory or common
law.
(7)The Attorney General may promulgate administrative regulations in accordance
with KRS Chapter 13A necessary to effectuate, or as an aid to the effectuation of,
the proper enforcement of this section.