371.160 Deposit in escrow of amount held back by owner in contract involving
295 words·~1 min read·
/ky/371-160A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
improvement of real estate. Except as provided in KRS 367.620 to 367.628:
(1)If, in any contract in the amount of two million dollars ($2,000,000) or more
involving the improvement of real estate, a certain amount or percentage of the
contract is held back by the owner, that retained amount shall be deposited in a
separate escrow account with a bank or trust company authorized to do business in
the Commonwealth of Kentucky;
(2)As of the time of the deposit of the retained funds, they shall become the sole and
separate property of the contractor to whom they are owed;
(3)The escrow agent shall promptly invest all escrowed principal in obligations
selected by the escrow agent in its discretion;
(4)Upon satisfactory completion of the contract, to be evidenced by a written release
by the owner, all funds accumulated in the escrow account, together with any
interest thereon, shall be paid immediately to the contractor to whom it is owed;
(5)The escrow agent shall be compensated for its services in an amount agreed to by
the owner, contractor, and escrow agent. The compensation shall be a commercially
reasonable fee commensurate with fees being charged for handling of escrow
accounts of similar size and duration. The compensation shall be paid from the
escrow account;
(6)In the event the owner fails or refuses to execute the release provided for in
subsection
(4)of this section, then the contractor shall have a cause of action
against the owner in a court of proper jurisdiction; and
(7)This section shall not apply to contracts with the Commonwealth, any city, county,
charter county government, urban-county government, unified local government, or
consolidated local government, any other political subdivision, agency, or
instrumentality of the Commonwealth, or school boards.