Kentucky nearly doubled the auctioneer's cut of a foreclosure sale — and association liens sit behind it
Kentucky nearly doubled the auctioneer's cut of a foreclosure sale — and association liens sit behind it
2026-09-10 · Kentucky · Legislation
What happened. Kentucky changed the economics of judicial sales. Under House Bill 566, the auctioneer's fee on a foreclosure sale of real property may now run to ten percent of the sale price, up from six percent. The Act also imposes, for the first time, a hard deadline for recording the master commissioner's deed after a sale.
HB 566 was signed by the Governor on 13 April 2026 and became 2026 Ky. Acts ch. 113. It carries no emergency clause and no delayed effective date, so it took effect on the 2026 session's default date, 15 July 2026.1
Nothing in the Act mentions community associations. It matters to them anyway, because a Kentucky association enforces its assessment lien the same way a bank enforces a mortgage — by judicial foreclosure, through the master commissioner, at an auction whose costs come off the top.
The fee change, in the statute's own words
The Act amends KRS 426.522(1)(a). The new figures are in the text; the struck figures are shown in brackets in the enrolled Act:
“(a) When the sale is the result of a foreclosure process initiated upon the request of a creditor or mortgage holder: 1. Shall not exceed ten percent (10%) [six percent (6%)] of the sale price on sales of real property, which may be an auction premium or commission charged to the sale of the property; and 2. Shall not exceed twenty-five percent (25%) [twenty percent (20%)] of the sale price on sales of personal property.”
Two points of precision. This is a ceiling, not a fixed rate — the statute says “shall not exceed.” And it applies to sales “initiated upon the request of a creditor or mortgage holder,” which is the posture an association is in when it forecloses its own lien. For other court-ordered sales, amended paragraph (b) leaves the fee to be “agreed upon between the auctioneer and the person making the request.”
The new deed-recording deadline
The Act also creates a new subsection (10) in KRS 382.110:
“(a) A deed filed pursuant to KRS 426.577 shall be filed by the grantee within five (5) business days of receipt of the deed from the commissioner appointed by a court to convey the property.
(b) If the property is located within the boundaries of a municipal government and the grantee has not filed the deed from the commissioner within thirty (30) business days of its receipt, the municipal government may file a petition in the Circuit Court of the county where the property is located requesting the court to enter an order: 1. Compelling the filing of the deed by the grantee; and 2. Awarding court costs and attorney's fees incurred in bringing the petition.”
A related new subsection (9) gives a mortgage holder 45 days to record a deed in lieu of foreclosure.
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