Kentucky HOA Assessment Limits

Section 1: Overview — How assessment authority and limits work in Kentucky

Kentucky doesn't cap assessment increases with a hard percentage ceiling. Instead, any board-proposed budget that raises assessments by more than 15 percent over the prior year triggers a required owner ratification process — and that rule applies to both condominiums and planned communities created on or after June 29, 2023.¹ Condominiums fall under the Kentucky Condominium Act, KRS 381.9101 to 381.9207, which took effect January 1, 2011 and drew heavily from the Uniform Condominium Act; the budget provision sits at KRS 381.9169. Condominium regimes created before January 1, 2011 remain under the older Kentucky Horizontal Property Law, KRS 381.805 to 381.910 — though several Condominium Act sections, including KRS 381.9169, reach those pre-2011 regimes for events occurring after January 1, 2011.² Planned-community homeowners associations operate under the 2023 Planned Community Act, KRS 381.785 to 381.801, which applies only to planned communities formed after June 29, 2023; older associations rely on their recorded declarations and the Kentucky Nonprofit Corporation Act, KRS Chapter 273.³ Under the planned-community framework, owners can rescind or reduce a board-imposed special assessment at a meeting held within 30 days of board passage.⁴ On the national spectrum, Kentucky sits apart from states that impose hard statutory caps — California being the leading example — and uses an owner-ratification mechanism keyed to a 15 percent threshold rather than relying entirely on the recorded declaration. The sections below lay out the authority to assess, the limits on increases, the operating procedures, and the recent legislative and judicial record.

Section 2: The assessment framework

2A. Authority to levy and allocate assessments

For condominiums, the unit owners' association acts through its executive board. The board holds statutory power to adopt budgets and collect assessments for common expenses from unit owners under KRS 381.9167.⁵ Common expenses are assessed against all units according to the allocation formula in the declaration, with limited common element costs and benefit-specific costs assessed differently under KRS 381.9191.⁶ For condominium regimes created before January 1, 2011, the Horizontal Property Law continues to supply the baseline framework — but KRS 381.9167, 381.9169, 381.9191, and 381.9193 apply to those older regimes for events occurring after January 1, 2011 without invalidating existing declaration provisions.²

For planned communities formed after June 29, 2023, the association acts through a board of directors that must annually adopt and amend a budget and collect assessments for common expenses under the 2023 Planned Community Act.⁷ The common expense liability of each lot is allocated equally among all lots unless the declaration says otherwise, and the board assesses that liability at least annually based on the adopted budget under KRS 381.797.⁸ Planned communities formed before June 29, 2023 generally don't fall under the Act and continue to operate under their recorded declarations and KRS Chapter 273.³ In both settings, the board holds the power to set the assessment through the budget, and the declaration controls the allocation formula.

2B. Limits on regular assessment increases

For condominiums, KRS 381.9169(3) requires the executive board to send a budget summary to all unit owners within 30 days of adoption. If the adopted budget carries an increase of more than 15 percent over the previous year's budget, the board must schedule a meeting of the unit owners to consider ratification.¹ That 15 percent threshold entered the statute through 2012 House Bill 433 (2012 Ky. Acts ch. 99), which narrowed an earlier requirement that had called for a ratification meeting for any proposed budget.⁹ For planned communities formed after June 29, 2023, KRS 381.797(7) runs a parallel rule: if the adopted budget carries an increase of more than 15 percent over the previous year's budget, the board must notice a special meeting for member ratification.⁸

The 15 percent figure is a ratification trigger, not a cap. Below the threshold, the board may adopt the budget without an owner ratification meeting. Above it, the board must hold the meeting — but the budget is still deemed ratified unless a majority of all owners (or any larger vote the declaration specifies) reject it.¹ Kentucky imposes no flat percentage cap analogous to a hard ceiling, and no limit exists on how large an increase a board may ultimately impose if the ratification process is satisfied. If a budget is rejected, the last ratified budget continues until the board adopts a new one that conforms to the statute — so a board that skips the ratification procedure on an above-threshold increase risks having that portion of the budget treated as not in effect.¹

2C. Special assessments, emergency assessments, and the declaration

The 2023 Planned Community Act gives owners an express right to limit special assessments. After the declarant control period, a special assessment requires an affirmative vote of a majority of the full board. Within 30 days after passage, the association must hold a meeting at which a majority of the total lots — cast in person or by proxy — may rescind or reduce the special assessment.⁴ The Kentucky Condominium Act contains no identical owner-rescission mechanism for special assessments; condominium special and emergency assessments are governed by the declaration and by KRS 381.9167, which authorizes the association to levy assessments to cover emergency or extraordinary circumstances affecting the condominium.⁵ In both regimes, the declaration may set additional limits or approval thresholds, and the planned-community statute provides that its assessment provisions override any conflicting limitation on the amount of assessments or annual increases contained in an existing declaration.¹⁰ Operationally, a Kentucky board can adopt a budget without an owner ratification meeting only when the increase is at or under 15 percent — and it must plan and notice a ratification meeting whenever the increase crosses that line.

Section 3: Assessment limits and procedures in practice

A. Regular assessment increase procedure

For condominiums, the executive board adopts the budget, provides a summary to all unit owners within 30 days, and — only when the increase exceeds 15 percent — sets a ratification meeting to be held not less than 14 days nor more than 30 days after the summary is provided. The budget is deemed ratified unless a majority of all unit owners reject it. (KRS 381.9169(3); applies to CONDOMINIUMS, including pre-2011 regimes for post-2011 events.)¹ For planned communities formed after June 29, 2023, the board adopts the budget, delivers it to all owners within 30 days, and — if the increase exceeds 15 percent — notices a special meeting to be held within 45 days. The budget is deemed ratified unless a majority of all owners reject it. (KRS 381.797(7); applies to POST-JUNE-2023 PLANNED COMMUNITIES.)⁸ For OLDER HOAs not covered by the Act, the increase procedure is declaration-defined with no statutory rule.³

B. Special assessment procedure

For planned communities formed after June 29, 2023, the board may levy a special assessment by majority vote of the full board after the declarant control period. Owners may rescind or reduce it at a meeting held within 30 days, by a majority of the total lots cast in person or by proxy. (KRS 381.797(3) and (4); applies to POST-JUNE-2023 PLANNED COMMUNITIES.)⁴ For condominiums, the declaration and the association's statutory power to assess for emergency or extraordinary circumstances govern special and emergency assessments — with no identical statutory owner-rescission right. (KRS 381.9167; applies to CONDOMINIUMS.)⁵

C. Caps, ceilings, and override mechanisms

Kentucky supplies no flat percentage cap on assessments in either the Condominium Act or the Planned Community Act. The operative control is the 15 percent ratification trigger described above. (KRS 381.9169(3); KRS 381.797(7).)¹ The Condominium Act expressly authorizes assessments to cover emergency or extraordinary circumstances, and the Planned Community Act provides that its assessment provisions override conflicting assessment or increase limitations in an existing declaration. (KRS 381.9167; KRS 381.797(8); applies to CONDOMINIUMS and POST-JUNE-2023 PLANNED COMMUNITIES respectively.)¹⁰

D. Notice, documentation, and disclosure tied to assessments

For condominiums, the budget summary must reach unit owners within 30 days of adoption, and a ratification meeting — when required — must occur within the 14-to-30-day window. (KRS 381.9169(3); applies to CONDOMINIUMS.)¹ On transfer of a condominium unit, the seller must furnish a resale certificate disclosing common expense fees, anticipated capital expenditures, reserves, and any past-due assessments — prepared by the association within 10 days of request. (KRS 381.9203; applies to CONDOMINIUMS, including pre-2011 regimes.)¹¹ For planned communities formed after June 29, 2023, owners may examine and copy association books, records, and minutes subject to reasonable standards, and the board must deliver the budget within 30 days of adoption. (KRS 381.785 to 381.801; applies to POST-JUNE-2023 PLANNED COMMUNITIES.)¹²

Section 4: Recent legislative and judicial activity

Recent Legislation

Kentucky enacted its first statutory framework for planned-community homeowners associations in 2023, followed in 2024 by a receivership remedy for neglected infrastructure. Neither the 15 percent ratification trigger nor the scope of the Planned Community Act has changed since.

A note on provenance: the 15 percent condominium ratification trigger in KRS 381.9169(3) dates to 2012, not to any recent bill. 2012 House Bill 433 (2012 Ky. Acts ch. 99, effective April 11, 2012) added it, narrowing the original any-budget ratification requirement.⁹

Recent Court Rulings

No published Kentucky appellate opinion within the past 36 months squarely construes the 15 percent budget-ratification trigger in KRS 381.9169 or KRS 381.797, the validity of an above-threshold increase, or a special-assessment rescission under the Planned Community Act. The two most recent association cases located are both designated "not to be published" and turned on issues other than assessment authority.

Active Legislative Debates

No pending 2025 or 2026 proposal verified on legislature.ky.gov would change the 15 percent ratification threshold or extend the Planned Community Act to communities formed before June 29, 2023. The 2024 effort that would have reached older associations through KRS 381.786 was removed before passage.¹³

Section 5: National positioning

Kentucky holds a middle position on the assessment-limit spectrum. Statutory-cap states — California leading the way — provide under California Civil Code Section 5605(b) that the board may not impose a regular assessment more than 20 percent greater than the prior year's, or special assessments that in the aggregate exceed 5 percent of budgeted gross expenses, without approval of a majority of a quorum of members.¹⁷ Ratification-mechanism states in the Uniform Common Interest Ownership Act family — including Alaska, Colorado, Connecticut, Delaware, Vermont, and Washington — control increases through an owner veto on the adopted budget, under which the budget is deemed approved unless a majority of all owners reject it at the noticed meeting.¹⁸ Kentucky uses a related but distinct device: a 15 percent threshold that triggers a required owner ratification meeting, with the budget deemed ratified unless rejected — not a flat cap, and not an unconditional veto. Declaration-driven states such as Alabama, Arkansas, and Georgia set assessment limits almost entirely by the recorded declaration. For multi-state operators entering Kentucky, the practical implication is direct: the board must run the ratification process for any budget increase over 15 percent, and because Kentucky only adopted a statutory planned-community framework in 2023, older HOAs remain largely declaration-driven.

Recommendations

1. Calendar the 15 percent test first. For every condominium and post-June-2023 planned community under management, run the proposed budget against the prior year's budget before adoption. If the increase is at or under 15 percent, the board may adopt without an owner ratification meeting; if it exceeds 15 percent, schedule the ratification meeting immediately. The threshold for action is a single number: greater than 15 percent over the prior year's budget.
2. Distribute the budget summary within 30 days and meet the timing windows. For condominiums, the summary must reach unit owners within 30 days of adoption, and any ratification meeting must fall 14 to 30 days after the summary. For post-June-2023 planned communities, deliver the budget within 30 days and hold any ratification meeting within 45 days. Treat these windows as hard deadlines — an above-threshold increase that skips the process can be challenged as not in effect.
3. Confirm formation date before applying the statute to any HOA. The Planned Community Act reaches only communities formed after June 29, 2023. For older HOAs, the controlling documents are the recorded declaration and KRS Chapter 273; advise boards accordingly and do not assume the statutory ratification or special-assessment-rescission rights apply.
4. For special assessments in newer planned communities, build in the 30-day rescission meeting. Treat board passage as the start of a clock: notice and hold the owner meeting within 30 days, and recognize that a majority of all lots can rescind or reduce the assessment. For condominiums, rely on the declaration and the emergency-assessment authority in KRS 381.9167, and document the emergency or extraordinary circumstance.
5. Watch for two triggers that would change this guidance: any bill amending KRS 381.9169 or KRS 381.797 to alter the 15 percent figure, and any bill amending KRS 381.786 to extend the Planned Community Act to pre-June-2023 communities. Either would require a revision to compliance calendars statewide.

Caveats

• The 15 percent condominium ratification trigger has a 2012 origin, not a recent one. 2012 House Bill 433 (2012 Ky. Acts ch. 99, signed April 11, 2012) enacted it. Kentucky bill numbers recycle each session, so a "24RS HB 433" record exists but is unrelated. The substance is correct; only the year and bill number differ, and this page reflects the verified provenance.
• No flat cap exists, and the 15 percent figure must not be read as one. It is a procedural trigger for owner ratification. A board may impose an increase above 15 percent if it completes the ratification process and owners do not reject the budget.
• The Kentucky ratification mechanism is "deemed ratified unless rejected," not a petition-to-reject device. Once the required meeting is noticed, the budget is ratified whether or not a quorum is present — unless a majority of all owners affirmatively reject it.
• Case law is thin and unpublished. The two recent association decisions located are designated "not to be published" and do not squarely construe the assessment-ratification provisions. The Saturday holding could not be confirmed from the public record to bear on assessments and should be read in full before being cited for any assessment-specific proposition.
• Section numbering for planned communities reflects codification. SB 120's operative budget and special-assessment provisions were enacted as Section 13 of the Act and codified at KRS 381.797; citations to the session-law section and the codified statute refer to the same text.

1. Ky. Rev. Stat. Ann. § 381.9169(3), Executive board members and officers (Kentucky Condominium Act), Kentucky Legislature ↩
2. Ky. Rev. Stat. Ann. § 381.9103, Application and construction of KRS 381.9101 to 381.9207, Kentucky Legislature ↩
3. Ky. Rev. Stat. Ann. § 381.786, Planned communities subject to KRS 381.785 to 381.801, Kentucky Legislature ↩
4. 2023 Ky. Acts ch. 23 (SB 120), Planned Community Act, Section 13(3)-(4), Kentucky Legislature ↩
5. Ky. Rev. Stat. Ann. § 381.9167, Powers of unit owners' association — Emergency assessments, Kentucky Legislature ↩
6. Ky. Rev. Stat. Ann. § 381.9191, Assessments for common expenses, Kentucky Legislature ↩
7. 2023 Ky. Acts ch. 23 (SB 120), Section 6, Kentucky Legislature ↩
8. Ky. Rev. Stat. Ann. § 381.797, Elements of assessments for each lot, Kentucky Legislature ↩
9. 2012 Ky. Acts ch. 99 (HB 433), reflected in KRS 381.9103 history note, Kentucky Legislature ↩
10. 2023 Ky. Acts ch. 23 (SB 120), Section 13(8), Kentucky Legislature ↩
11. Condominium Seller's Certificate (Ky. Rev. Stat. Ann. § 381.9203), Kentucky Real Estate Commission ↩
12. 2023 Ky. Acts ch. 23 (SB 120), Sections 11 and 13, Kentucky Legislature ↩
13. 24RS HB 472 bill record, Kentucky Legislature ↩
14. Saturday v. Ashwood Townhouses of Laredo Ass'n, Inc., No. 2023-CA-0033-MR (consolidated), Ky. Ct. App. Nov. 8, 2024 (not to be published), Court of Appeals minutes, Kentucky Court of Justice ↩
15. Panaretos v. Villas at Claymont Springs Cmty. Ass'n, Inc., No. 2024-CA-1229-MR, Ky. Ct. App. Dec. 5, 2025 (not to be published) ↩
16. Kentucky Court of Justice, court structure (Circuit Court, Court of Appeals, Supreme Court) ↩
17. Cal. Civ. Code § 5605(b), California Legislative Information ↩
18. Uniform Common Interest Ownership Act adopting states, Community Associations Institute ↩