What the fee change does to a small assessment foreclosure

The arithmetic is the point, and it is not subtle at the small end.

Association foreclosures in Kentucky are usually small-balance actions — a few thousand dollars of assessments, interest, late fees and costs, secured by the continuing lien at KRS 381.799 for a planned community or KRS 381.9193 for a condominium. That lien is very often junior to a first mortgage, so what the association actually recovers is whatever survives after the sale costs and the senior lienholder.

Raising the auctioneer's ceiling from six to ten percent moves four percent of the entire sale price out of that pool. On a $250,000 house, that is $10,000 of additional cost sitting ahead of every junior claim — a figure that can exceed the whole assessment debt the association went to court over.

Whether the auctioneer charges the maximum is a separate question; the statute sets a cap, and practice varies by county and by commissioner. But an association budgeting a collection action on the old six percent assumption is budgeting on a number the statute no longer contains.

The deed deadline is a new, direct liability for associations

This is the provision most likely to catch a board by surprise, because it applies to the association when it wins.

An association that bids in at its own foreclosure sale — a routine defensive move when no third party bids enough to cover the lien — becomes the grantee of the commissioner's deed. Subsection (10)(a) then gives it five business days from receipt to record.

Miss that, and if the property sits inside a city's boundaries, the thirty-business-day trigger in paragraph (b) lets the municipality petition the Circuit Court to compel recording and to have its court costs and attorney's fees awarded against the grantee. For an association that took title to a unit and left the paperwork with counsel over a slow summer, that is a bill it never used to face.

Three practical consequences:

• Assign the recording, in writing, before the sale. The five-day clock runs from the grantee's receipt of the deed, not from the order confirming the sale. If counsel receives it, counsel needs the instruction and the recording fee already in hand.
• Know whether the parcel is inside a municipality. The fee-shifting petition in paragraph (b) is available only to a municipal government. In unincorporated county territory, the five-day duty in paragraph (a) still applies, but paragraph (b)'s remedy does not.
• Title-taking has a carrying cost that starts sooner now. Once the deed is recorded, the association is the owner of record — responsible for the unit, and in the odd position of assessing itself. The new deadline compresses the window in which a board can still reconsider.

What did not change

Worth stating plainly, because a statute that alters foreclosure mechanics invites over-reading. HB 566 did not touch the association lien itself. KRS 381.799 — the continuing lien for planned communities, and the section governing its validity and priority — was not amended in 2026, and neither was the condominium lien provision. Lien priority, the six-month or other look-back questions, and the association's underlying right to foreclose are all exactly where they were.

What changed is the cost of the machinery, and one new duty on whoever ends up holding the deed.

What to watch next

The practical test is the first full round of master commissioner sales conducted after 15 July 2026. Two things are worth tracking locally rather than statewide: whether auctioneers in your county actually move to the new ceiling or stay near the old rate, and whether your circuit's commissioner adjusts the customary fee schedule in response.

Boards with collection actions already filed should ask counsel to re-run the net-recovery estimate on the new cap before the sale rather than after it. A judgment that made economic sense at six percent may not at ten.