INFORMATION | FREQUENTLY ASKED QUESTIONS
(1) Is there a list of pending foreclosure cases or of upcoming sales?
There is no list of pending cases
or of upcoming sales other than those shown on the link to Upcoming
Sales . When a property is referred to the commissioner's office
for sale, the property is appraised and a sale date assigned; it is
then posted to this web site. In addition, the sale is advertised
in the Lexington Herald-Leader not less than
seven days nor more than 21 days before the date of the sale. That notice
appears in the classified section on Fridays under Commissioner's Sale.
(2) Can I purchase the property before the sale?
Yes, but only the owner(s) can sell. The lien holder or mortgage company who brought the action do not own or have title to the property and as such does not have the authority to sell it.
(3) Cash or Credit?
At the time of sale the purchaser
has the option of either (1) paying the full price or (2) if paying
at least 10% of the purchase price with the right to pay the balance
in thirty (30) days. If the purchaser elects to pay less than
the full price, they must sign a bond and provide surety at time
of sale (see next question).
The bond shall bear interest on the
unpaid balance at the rate the judgment bears, from the date of sale
until paid in full, and shall have the force and effect of a judgment.
The bond interest rate charged on any unpaid balance is listed
for each case shown in Upcoming Sales. In the event of an exception
or objection to the sale, interest will be abated until ruled upon by
the Court. A claim for delinquent taxes does not abate interest.
The commissioner accepts personal checks
for all payments due the master commissioner's office.
(4) What do "bond"
and "surety" mean?
The law requires that any purchaser
who, at the time of sale, pays less than the full amount of the successful
bid must sign a “bond” (on a form prepared and supplied
by the commissioner) to pay the balance and provide surety for that
bond. A “surety” may either be a person, bank, or
other entity who agrees unconditionally to pay the balance due should
the purchaser, for whatever reason, fail to pay in full within thirty
(30) days. Most prospective bidders and purchasers, prior to the
sale, make arrangements with a bank for the issuance of an unconditional
and irrevocable official Letter of Credit (which serves as “surety”)
which is to be faxed to the commissioner on the date of sale, with the
original to follow. Please note that a loan commitment will not
be sufficient, only a Letter of Credit from a bank will suffice.
Other person(s) or entities, who are
Kentucky residents, may also act as sureties, but only if they are present
at the time of sale and prepared to furnish the commissioner a sworn
financial statement (on a form supplied by the commissioner) which shows
a net worth of at least 2 ½ times the sale price.
If a married individual intends to act as surety, their spouse must
also sign. Despite the net worth shown, the commissioner has the
right and discretion to reject any proposed surety for any reason.
Should a purchaser fail to furnish
a surety, the commissioner will report that failure to the court for
appropriate action. This may include a resale of the property
and a judgment against the original purchaser for any difference in
resale value, as well as the court costs incurred as a result of the
here for Affidavit of Surety For Sale Bond
here for Sample Bank Credit Letter
(5) Can I see or inspect the property before the sale?
The owner(s) or the occupants of the property are the only persons able to give permission to prospective bidders, but they are under no obligation to do so. If you can get permission or entry from them, then you may inspect the property, but the commissioner’s office cannot assist in this process. Other information regarding the property may be found at the Property Valuation Administrator’s office or at its Web Site at www.FayettePVA.com.
(6) What does the amount to be raised mean?
That is the amount of any debt owed to the party seeking to satisfy their judgment debt and may or may not have anything to do with the value of the property. Nor is it necessary that the property sell for that amount. Regardless of the purchase price, all liens or claims of the parties in the case will be satisfied and released when the deed passes to the purchaser. Taxes are paid as noted in Question 10.
(7) Must the property bring a certain amount?
No, but prior to the sale, the commissioner
is required to have two qualified persons appraise the property. Should
the successful bid be less than two thirds (2/3) of that appraisal,
the owner(s) of the property have six (6) months in which to reclaim
or redeem the property by paying into court the bid amount plus an additional
10% per annum interest and any reasonable costs incurred. Please refer
to KRS 426.530 for additional information. Upon such payment, and the
Circuit Court’s approval, the commissioner will convey the property
to the former owner(s), their successors, or assigns.
(8) Can a sale be canceled?
Yes and they frequently are, but as soon as the commissioner’s office is notified of the cancellation, this Web site will be updated accordingly.
(9) Will I receive clear title?
The commissioner’s office does
not warrant or guarantee in any manner that the title is free and clear
of encumbrances or defect. However, the purchaser or their attorney
has 10 days after the sale to ascertain whether such conditions exist
and to file their objections with the Court. If there are any such encumbrances
or defects that cannot be resolved within a timely manner, the purchaser
may ask that the sale be set aside and the purchase money refunded.
Within that 10-day period a purchaser is strongly advised to seek the
advice of an attorney regarding a title examination.
(10) Who pays the property taxes?
The purchaser shall be required to
assume and pay all taxes or assessments upon the property for the current
fiscal tax year (i.e. the amount that will be due thru June 30, 2019)
and all subsequent years. All other delinquent taxes or assessments
upon the property for prior years shall be paid from the sale proceeds
if properly claimed in writing and filed of record by the purchaser,
as explained in Question 9.
(11) When will I receive a deed and possession of the property?
The Master Commissioner after making
the sale shall report his actions to the Court. Ten (10) days after
the filing of that report, if no objections have been filed thereto
and without motion, the sale shall be deemed confirmed (RFCC 26 B-5).
The purchaser is entitled to possession of the property after confirmation.
An Order confirming the sale (with
sufficient copies, see RFCC 19) may be submitted to the Master Commissioner
ten (10) days after filing of the Report of Sale, but due to the time
allowed the parties and purchaser to object to the sale or to satisfy
themselves that the title is free and clear of defects and of the time
needed to secure the necessary Court orders, it may take 5-6 weeks before
a deed is prepared and ready for delivery.
Even though a deed will not immediately
be delivered to a purchaser, they have an equitable and insurable interest
in the property and are urged to immediately secure an insurance policy
on the property for its full value.
(12) What if somebody is currently living there?
In most cases, the residents voluntarily
leave before a deed is given to the successful bidder. Should
they then refuse to vacate, the purchaser will need to obtain an order
from the Circuit Court ordering them to vacate.
(13) Information regarding CR 4.11
4.11 BOND MEMO