The clause that matters even though the bill failed

Section 18 of the House substitute was a short-term rental preemption — it would have barred local governments from banning short-term rentals in residential zones, imposing density caps, or requiring conditional use permits. Its final subsection is the one worth keeping:

“This section shall not be construed to affect, prohibit, preempt, or render unenforceable any property or use restrictions contained in the properly enacted rules or regulations of a homeowners association, condominium association, or other similar property owner association or cooperative.”

That sentence is not unique to SB 9. Word for word, it also appeared in Senate Bill 112, the standalone 2026 short-term rental preemption bill, and in House Bill 617, the 2026 zoning-deregulation bill. Three separate drafting teams, working on three separate bills, all reached for the same carve-out.

The practical reading is narrow and worth stating precisely: these bills would have constrained local governments, and they went out of their way to say so. A Kentucky association's recorded rental restriction was never in their path.

Why an omnibus is a different risk than a standalone bill

The mechanics here are worth understanding, because they will repeat.

SB 233's association provisions failed on their own in the House. Folding them into SB 9 gave them a second, faster vehicle — one already through the Senate, already on the House calendar, and carrying enough other content to attract votes. That is the standard end-of-session route for a measure that has run out of its own runway.

The cost is that the provision inherits every fight in the vehicle. SB 9 as it left the House was a bill about infrastructure districts, developer incentives, occupancy limits, building code administration, landlord-tenant procedure and short-term rentals. The association sections were three pages of sixty. When the two chambers deadlocked, nothing in the conference report identifies which sections caused it — the report says only “Cannot agree.”

So a board reading the 2026 record should not conclude that the legislature considered and rejected an audit exemption for small associations on the merits. The Senate voted for it twice, once 34-0 as SB 233 and once inside a 35-2 vote on SB 9. The record simply does not show it being weighed.

What did not change, and what that means operationally

• The financial-report ladder stands. Planned communities under KRS 381.794 owe a report within 180 days of fiscal year end at a standard set by revenue — cash receipts and disbursements, compilation, review, or audit. Condominiums under KRS 381.9197 owe one within 150 days, on lower thresholds. A fifteen-lot association is on exactly the same ladder as a fifteen-hundred-lot one.
• The smallest groupings stay inside the Act. Section 12 would have put a floor under it. Without it, KRS 381.785(13)(a) still reads “a group of residential dwellings” with no minimum, and the exclusions in paragraph (b) remain just two: a shared-roadway-only arrangement, and a development with no homeowners' association established by declaration, subdivision plat or deed. A four-lot grouping with a declaration and an association is not excluded by anything in the current text.
• Occupancy-limit and short-term-rental preemption did not arrive. Local ordinances that restrict occupancy by relationship, or that regulate short-term rentals, were left exactly as they were. For an association, that means the local overlay on top of your covenants is unchanged too.

What to watch next

Two things about the 2027 Regular Session, which convenes in January 2027 for a 30-day odd-year term.

First, there is nothing to read yet. Kentucky abolished bill pre-filing in 2022, so no bill requests or pre-filed bills exist for 2027, and the Legislative Research Commission had published no 2027 records as of 10 September 2026. Anyone offering you a 2027 Kentucky bill number today is describing something that does not exist.

Second, the 2026 interim is quiet on this subject. The posted minutes of the Interim Joint Committee on Local Government meetings held 23 June, 8 July and 18 August 2026, and of Judiciary on 9 June, 2 July and 6 August, contain no discussion of homeowners associations, condominiums, planned communities, covenants or assessments. The Kentucky Housing Task Force that produced the recommendations behind SB 9 was a 2025 body; no equivalent task force appears on the 2026 interim calendar.

A 30-day session is short, and a bill that needs a conference committee in a 30-day session usually does not get one. That is context, not a prediction.