On January 1, 2016, the Kentucky Supreme Court amended Part IV of the Rules of Administrative Procedures, relating to the practice of Master Commissioners. A noticeable addition to the Rules was Section 5, dealing with General Provisions of Judicial Sales. As many mortgage lenders were likely aware when dealing with foreclosures throughout the state, the time frame for which a matter could move through foreclosure by and large depended on the county in which it was filed and the individual practices of the Master Commissioner within that county. These rules now standardize the practice so mortgage lenders should expect greater uniformity.
Though more than one advertisement of the sale may be requested, notices of sale now only require a single publication no less than seven days or more than 21 days before the sale. Section 5 requires that all sales occur within a reasonable time not to exceed 90 days from the date of the order of referral to the Master Commissioner. If a property is “vacant and abandoned” then the sale shall be held “expeditiously.” All successful purchasers are now required to pay full cash or make a deposit of 10% of the purchase with the balance paid within 30 days. A bond with surety (as approved by the Master Commissioner) shall be executed for any unpaid balance, and it shall bear 12% interest. A judgment creditor is only allowed to credit bid up to its judgment amount. If a judgment creditor bids over its judgment amount, then it appears it too will be required to execute the bond and surety. The report of sale shall be filed no later than three business days after the date of sale. Finally, the Master Commissioner shall execute and deliver the deed to the purchaser of the property no later than five business days after the court has confirmed the sale and approved the deed, and all costs, fees, and/or purchase price have been paid.
In sum, these rules should create greater consistency and efficiencies of foreclosures throughout the state.
Molly Rose, Shareholder, Morgan & Pottinger, PSC
Molly’s practice focuses on bankruptcy and retail foreclosure.
