Kentucky HOA Foreclosure

1. Overview: How HOA foreclosure works in Kentucky

Kentucky runs every association foreclosure through the courts. The association enforces its lien in the Circuit Court, a Master Commissioner rather than a sheriff conducts the sale, and the former owner gets a redemption right only when the property sells for less than two-thirds of its appraised value.¹ Condominiums split along a creation-date line. Regimes created before January 1, 2011 still answer to the Kentucky Horizontal Property Law (KRS 381.805 to 381.910); regimes created on or after that date fall under the Kentucky Condominium Act (KRS 381.9101 to 381.9207).² Non-condominium planned communities once lived entirely under recorded covenants, but the 2023 Kentucky Planned Community Act (KRS 381.785 to 381.801) now reaches them too — even as recorded declarations and the Kentucky Nonprofit Corporation Acts continue to do much of the work.³ The procedure moves in a straight line: a recorded lien, a Circuit Court complaint and judgment, a court-ordered appraisal, a Master Commissioner's sale with published notice, confirmation of the sale, and finally a Master Commissioner's deed.⁴ Federal law sits on top of all of it through the Fair Debt Collection Practices Act, the Servicemembers Civil Relief Act, and the Bankruptcy Code's automatic stay.⁵ The sections that follow lay out the statutory framework, the step-by-step sequence, recent legislative and judicial activity, and where Kentucky stands among the states.

2. The statutory framework

2A. The Kentucky condominium framework

Kentucky governs condominiums with two statutes, divided by the date a regime was created. The Horizontal Property Law (KRS 381.805 to 381.910), enacted in 1962, still governs condominium regimes created before January 1, 2011.⁶ The Kentucky Condominium Act (KRS 381.9101 to 381.9207) took effect January 1, 2011 and governs condominiums created on or after that date. It did not repeal the Horizontal Property Law, though a list of its provisions also reaches pre-2011 regimes for events that occur after January 1, 2011.⁷ Lawmakers modeled the Condominium Act on the Uniform Condominium Act, but they departed from the uniform text in several places, and the Act is not the Uniform Common Interest Ownership Act. The Community Associations Institute counts only a small group of states that have adopted UCIOA; the Uniform Law Commission instead lists Kentucky among the 14 Uniform Condominium Act states, alongside Alabama, Arizona, Maine, Minnesota, Missouri, Nebraska, New Mexico, Pennsylvania, Rhode Island, Texas, Virginia, Washington, and West Virginia.⁸

For pre-2011 condominiums, KRS 381.883 hands the council of co-owners a lien for unpaid common-expense assessments that ranks "prior to all other liens, except only" governmental tax and assessment liens and "all sums unpaid on first mortgages of record," and the council may enforce it "in like manner as a mortgage of real property."⁹ For post-2011 condominiums, KRS 381.9193 gives the association a lien from the moment an assessment or fine becomes due — one that can secure late charges, reasonable collection costs, attorney fees, fines, and interest, and that "may be foreclosed in like manner as a mortgage on real estate."¹⁰ Neither statute, though, creates a UCIOA-style six-month super-priority over a first mortgage. Colorado gives associations six months of common-expense assessments ahead of a first deed of trust (Colo. Rev. Stat. § 38-33.3-316), and Nevada gives nine months (Nev. Rev. Stat. § 116.3116); Kentucky does neither. KRS 381.9193 subordinates the association lien to a mortgage recorded before the assessment came due and to liens recorded before the declaration, and KRS 381.883 subordinates the lien to first mortgages of record.¹¹ Under the Condominium Act, recording the declaration is itself record notice of the lien, so the association perfects it without filing a separate per-owner lien.¹²

2B. The framework for planned communities

For decades, Kentucky had no statute that addressed non-condominium homeowners associations, and those communities ran solely on recorded covenants, conditions, and restrictions, backed by general corporate and common-law principles. The 2023 Kentucky Planned Community Act changed that. Senate Bill 120, codified at KRS 381.785 to 381.801, was signed March 20, 2023 and took effect June 29, 2023, and it gave the state its first statutory framework for planned-community associations.¹³ The Act covers budgets, assessments, records access, open board meetings, declaration amendments, and association liens, and it directs an association to organize as a nonprofit corporation or an unincorporated nonprofit association.¹⁴ KRS 381.799 gives the association a "continuing lien" for unpaid assessments, special assessments, and related charges that stay unpaid thirty days after they come due, and once the association records that lien properly, it ranks "prior to any other lien" except governmental tax liens and "any mortgage, liens, or encumbrances recorded prior to the lien recordation."¹⁵

The Act is not a comprehensive UCIOA-style code, and it leaves gaps. It does not supply amendment procedures for older declarations that stay silent, and communities that predate June 29, 2023 and lack a homeowners association as the Act defines it remain outside its reach.¹⁶ Recorded CC&Rs therefore remain the operative source of most foreclosure authority for planned communities, and the Kentucky Nonprofit Corporation Acts (KRS Chapter 273) continue to govern corporate structure, records, and board procedure.¹⁷ For managers and boards, the lesson is plain: in Kentucky the governing documents carry unusual weight, and you must read them closely before you take any enforcement action.¹⁸

2C. Judicial foreclosure under KRS Chapter 426 and federal overlays

Whatever the source of the lien, enforcement runs through the Circuit Court, because Kentucky requires judicial foreclosure for residential property and does not generally allow a non-judicial power-of-sale.¹⁹ Kentucky's signature feature is the Master Commissioner — an officer of the Circuit Court, appointed under KRS 31A.010, who conducts judicial sales in place of the sheriff.²⁰ The Master Commissioner works under the Administrative Procedures of the Court of Justice and recent Kentucky Supreme Court orders, which require the sale to take place within ninety days of the order of referral unless the court grants an extension.²¹

After the complaint, service, and judgment of foreclosure, KRS 426.520 requires that two disinterested persons with real estate experience appraise the property before the sale.²² The Master Commissioner then sells the property after posting and publishing notice under KRS 426.560 and KRS 424.130, reports the sale, and waits for the court to confirm it before a Master Commissioner's deed issues.²³ The conditional redemption right under KRS 426.530 arises only when the sale brings less than two-thirds of appraised value; in that case the former owner has six months to redeem by paying the purchase price plus ten percent annual interest and reasonable costs. Senate Bill 36 of the 2014 Regular Session cut that period from one year to six months, effective July 15, 2014, so any reference to a one-year Kentucky redemption period is out of date.²⁴

Federal law overlays the whole process. After Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019), a firm whose only role is non-judicial security-interest enforcement does not count as a full "debt collector" — but that safe harbor stays narrow in a judicial-foreclosure state like Kentucky, where the Supreme Court expressly reserved the question of judicial enforcement and pre-suit dunning remains debt collection.²⁵ The Servicemembers Civil Relief Act (50 U.S.C. § 3901 et seq.) can stay a foreclosure against an active-duty servicemember, and the Bankruptcy Code's automatic stay (11 U.S.C. § 362) halts a foreclosure the moment the owner files.²⁶

3. The Kentucky HOA foreclosure procedural sequence

A. Lien establishment and recording

Where the lien comes from depends on the type of community. For post-2011 condominiums, KRS 381.9193 attaches the lien automatically the moment an assessment or fine becomes due, and recording the declaration provides record notice without a separate per-owner filing.²⁷ For pre-2011 condominiums, KRS 381.883 attaches the lien to unpaid common-expense shares.²⁸ For planned communities, KRS 381.799 creates a continuing lien once charges stay unpaid for thirty days, and the association must charge and properly record that lien to claim its statutory priority.²⁹ CC&Rs usually build on these statutory minimums by spelling out the charges the lien secures and the recording mechanics, and for older planned communities the declaration may be the only source of lien authority.³⁰

B. Pre-foreclosure notice and demand

Kentucky sets no statutory minimum dollar amount and no months-delinquent threshold before an association may foreclose; the governing documents set the trigger.³¹ In practice, associations send demand letters and offer a chance to cure before they sue, and courts expect to see proof that the association levied the assessments properly, sent the notices, and gave the owner a chance to cure before they grant foreclosure.³² When third-party or association-affiliated collectors handle that pre-suit dunning, the FDCPA treats it as debt collection, so the notices must satisfy federal validation requirements — and the Obduskey safe harbor does not shield this stage in Kentucky's judicial system.³³ These steps apply across all three community types, and CC&Rs commonly add specific hearing and notice procedures the association must honor.³⁴

C. Complaint, judgment, appraisal, and Master Commissioner's sale

The association files a foreclosure complaint in the Circuit Court of the county where the property sits, names the junior lienholders, serves the owner with summons and complaint, and moves to judgment either by default or after a contested case.³⁵ Once the court enters a judgment of foreclosure and an order of sale, it refers the case to the Master Commissioner, who must sell within ninety days unless the court grants an extension.³⁶ Before the sale, KRS 426.520 requires two disinterested persons with real estate experience to appraise the property and file a signed, written appraisal; that figure sets the two-thirds benchmark that decides whether any redemption right exists.³⁷ The Master Commissioner gives notice by posting and newspaper publication under KRS 426.560 and KRS 424.130, conducts the sale, and accepts bids — and where a lender or association is the moving party, credit bids are common.³⁸ The Master Commissioner then files a report of sale, and the court confirms it; Kentucky courts have held that a low price alone is not enough to set a judicial sale aside.³⁹ A Master Commissioner's deed then conveys title. This sequence applies to all three community types, because in each case the association forecloses the lien in the manner of a mortgage on real estate.⁴⁰

D. Post-sale rights and remedies

The conditional redemption right under KRS 426.530 applies only when the sale brings less than two-thirds of appraised value. In that case the former owner, or that owner's representatives, may redeem within six months by paying the purchase price, ten percent annual interest, and the purchaser's reasonable post-sale costs, with the redemption money paid to the court clerk.⁴¹ If the property sells for two-thirds or more of appraised value, no statutory redemption period applies.⁴² The proceeds flow out by priority: any surplus over the senior liens goes to the former owner, and the judgment addresses the junior liens, which the confirmed sale ordinarily extinguishes.⁴³ The purchaser takes possession by giving the former owner ten days' notice and then obtaining a writ of possession under KRS 426.260, and a deficiency judgment for any shortfall is generally available under KRS 426.005.⁴⁴ These remedies apply across community types, subject to any added procedures in the governing documents.

4. Recent legislative and judicial activity

A. Recent bills

The 2025 and 2026 sessions produced no HOA-specific lien or foreclosure bill. The one recent measure that touched the Master Commissioner sale process at all was House Bill 347 of the 2025 Regular Session, and it did not pass.

No HOA-specific lien or foreclosure bill became law in the 2025 Regular Session or the 2026 even-year session. The most consequential recent statutory change remains the 2023 Planned Community Act (Senate Bill 120), which for the first time gave Kentucky planned communities a statutory assessment lien under KRS 381.799; it falls just outside the 24-month window, but it reshapes planned-community collections going forward.⁴⁶

B. Recent appellate rulings

No published Kentucky appellate decision in the past 36 months sets new precedent on HOA or condominium foreclosure. The closest matter is a consolidated appeal between a Lexington townhouse owner and his association.

C. Active legislative debates

Kentucky has no active, well-publicized debate over an HOA foreclosure or condominium super-priority bill. What legislative attention community associations have drawn has centered on putting the 2023 Planned Community Act into practice and on Master-Commissioner-sale property-condition proposals like HB 347.⁴⁸

5. National positioning and related coverage

Kentucky sits firmly in the judicial-foreclosure camp, set apart by its Master Commissioner sale system and its conditional, two-thirds-appraisal redemption rule. Unlike non-judicial trustee's-sale states, every association foreclosure here runs through the Circuit Court, and unlike sheriff-sale states, a court-appointed Master Commissioner conducts the sale. Kentucky also breaks with the 22 jurisdictions whose laws give association liens some degree of super-priority: neither the Horizontal Property Law, nor the Condominium Act, nor the Planned Community Act puts an association ahead of a first mortgage for six months. And unlike states with an unconditional post-sale redemption period, Kentucky makes redemption conditional — it arises only when the bid falls below two-thirds of appraised value, and it now runs six months rather than the historical year. The result is an owner-protective but lender-favorable structure, one in which CC&Rs and statutory text, not a regulator, drive the outcomes.

For boards and managers, the operational takeaway is straightforward: confirm which statute governs the community, perfect and record the lien correctly, and run collections through counsel who know Circuit Court foreclosure and Master Commissioner sales.

1. Ky. Rev. Stat. Ann. § 426.530 (Right of redemption); Ky. Rev. Stat. Ann. § 31A.010 (Master commissioners) ↩
2. Ky. Rev. Stat. Ann. § 381.805 (Horizontal Property Law, short title); Kentucky Condominium Act, Ky. Rev. Stat. Ann. §§ 381.9101–381.9207 ↩
3. Kentucky Planned Community Act, S.B. 120, 2023 Reg. Sess. (Ky. 2023) (codified at Ky. Rev. Stat. Ann. §§ 381.785–381.801) ↩
4. Ky. Rev. Stat. Ann. § 426.520 (Appraisal of real property before judicial sale) ↩
5. Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019) ↩
6. Ky. Rev. Stat. Ann. § 381.805 ↩
7. Ky. Rev. Stat. Ann. § 381.9103 (Application and construction) ↩
8. Stites & Harbison, New Law Brings Changes to Kentucky's Condominium Laws; Uniform Law Commission, Condominium Act enactment status ↩
9. Ky. Rev. Stat. Ann. § 381.883 (Lien for unpaid assessments — Foreclosure — Suit) ↩
10. Ky. Rev. Stat. Ann. § 381.9193 (Lien for assessments) ↩
11. Ky. Rev. Stat. Ann. § 381.9193(2); § 381.883; cf. Colo. Rev. Stat. § 38-33.3-316 & Nev. Rev. Stat. § 116.3116 (super-priority states) ↩
12. Ky. Rev. Stat. Ann. § 381.9193 (recording of declaration constitutes record notice) ↩
13. S.B. 120, 2023 Reg. Sess., ch. 23 (Ky. 2023) (signed Mar. 20, 2023; effective June 29, 2023) ↩
14. Ky. Rev. Stat. Ann. §§ 381.787–381.797 (planned community provisions) ↩
15. Ky. Rev. Stat. Ann. § 381.799 (Association's continuing lien — Validity and priority of liens) ↩
16. Ky. Rev. Stat. Ann. § 381.786 (Planned communities subject to KRS 381.785 to 381.801) ↩
17. Kentucky Nonprofit Corporation Acts, Ky. Rev. Stat. Ann. ch. 273 ↩
18. Ky. Rev. Stat. Ann. § 381.786 (governing documents remain valid; Act does not fill gaps for silent older declarations) ↩
19. Nolo, Kentucky Foreclosure Laws and Procedures (judicial foreclosure under KRS ch. 426) ↩
20. Ky. Rev. Stat. Ann. § 31A.010 (Master commissioners) ↩
21. Supreme Court of Kentucky, Order 2025-48, Administrative Procedures pt. IV (Master Commissioners; 90-day sale window) ↩
22. Ky. Rev. Stat. Ann. § 426.520 (Appraisal of real property before judicial sale) ↩
23. Ky. Rev. Stat. Ann. §§ 426.560, 424.130 (notice and publication); § 426.520(2) ↩
24. Ky. Rev. Stat. Ann. § 426.530 (six-month redemption when sale brings less than two-thirds of appraised value; amended 2014 Ky. Acts ch. 107, effective July 15, 2014) ↩
25. Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019) (reserving the question of judicial enforcement) ↩
26. Servicemembers Civil Relief Act, 50 U.S.C. § 3901 et seq.; Bankruptcy Code automatic stay, 11 U.S.C. § 362 ↩
27. Ky. Rev. Stat. Ann. § 381.9193 ↩
28. Ky. Rev. Stat. Ann. § 381.883 ↩
29. Ky. Rev. Stat. Ann. § 381.799 ↩
30. S.B. 120, 2023 Reg. Sess., ch. 23 (Ky. 2023) ↩
31. Ky. Rev. Stat. Ann. ch. 426 (no statutory minimum debt or delinquency threshold for judicial foreclosure) ↩
32. Ky. Rev. Stat. Ann. § 426.006 (joinder of lienholders; cure and notice) ↩
33. Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019) ↩
34. S.B. 120, 2023 Reg. Sess. (Ky. 2023) (enforcement and notice provisions) ↩
35. Ky. Rev. Stat. Ann. § 426.006 (petition to enforce a lien; joinder of other lienholders) ↩
36. Supreme Court of Kentucky, Order 2025-48 (90-day sale window) ↩
37. Ky. Rev. Stat. Ann. § 426.520 ↩
38. Ky. Rev. Stat. Ann. §§ 426.560, 424.130 ↩
39. Sterling Grace Mun. Sec. Corp. v. Central Bank & Trust Co., 926 S.W.2d 670, 673 (Ky. Ct. App. 1996), as discussed in Eagle Cliff Resort, LLC v. KHBBJB, LLC (Ky. Ct. App. 2009) ↩
40. Ky. Rev. Stat. Ann. §§ 381.9193, 381.883, 381.799 (each enforced as a mortgage on real estate) ↩
41. Ky. Rev. Stat. Ann. § 426.530 ↩
42. Ky. Rev. Stat. Ann. § 426.530 (no redemption where sale brings two-thirds or more of appraised value); see Kentucky Farm Bureau Mut. Ins. Co. v. Conley (Ky. 1973) ↩
43. Ky. Rev. Stat. Ann. §§ 426.530, 426.006 ↩
44. Ky. Rev. Stat. Ann. § 426.260 (writ of possession after ten days' notice); § 426.005 (deficiency judgment) ↩
45. H.B. 347, 2025 Reg. Sess. (Ky. 2025) (introduced Feb. 5, 2025; to House Local Government Feb. 7, 2025; no further action) ↩
46. S.B. 120, 2023 Reg. Sess. (Ky. 2023); Ky. Rev. Stat. Ann. § 381.799 ↩
47. Saturday v. Ashwood Townhouses of Laredo Ass'n, Inc., No. 2023-CA-0541-MR (Ky. Ct. App. Nov. 8, 2024) (Not To Be Published) (McNeill, J.) ↩
48. Kentucky General Assembly, Legislative Record, 2025 & 2026 Regular Sessions ↩