KRS § 382.365 — KY Code / Title XXXII / Chapter 382 / Section 382.365
382.365 Release of lien, with notice to property owner, within thirty days of satisfaction -- Assignments of liens -- Proceeding against lienholder in District Court or Circuit Court -- Liability of lienholder when lien not released or notice not sent -- Notice to state or lienholder -- Damages
Status: in_force

382.365 Release of lien, with notice to property owner, within thirty days of

satisfaction -- Assignments of liens -- Proceeding against lienholder in District

Court or Circuit Court -- Liability of lienholder when lien not released or

notice not sent -- Notice to state or lienholder -- Damages.

(1) A holder of a lien on real property, including a lien provided for in KRS 376.010,

shall release the lien in the county clerk's office where the lien is recorded within

thirty (30) days from the date of satisfaction.

(2) An assignee of a lien on real property shall record the assignment in the county

clerk's office as required by KRS 382.360. Failure of an assignee to record a

mortgage assignment shall not affect the validity or perfection, or invalidity or lack

of perfection, of a mortgage lien under applicable law.

(3) A proceeding may be filed by any owner of real property or any party acquiring an

interest in the real property in District Court or Circuit Court against a lienholder

that violates subsection (1) or (2) of this section. A proceeding filed under this

section shall be given precedence over other matters pending before the court.

(4) Upon proof to the court of the lien being satisfied by payment in full to the final

lienholder or final assignee, the court shall enter a judgment noting the identity of

the final lienholder or final assignee and authorizing and directing the master

commissioner of the court to execute and file with the county clerk the requisite

release or assignments or both, as appropriate. The judgment shall be with costs

including a reasonable attorney's fee. If the court finds that the lienholder received

written notice of its failure to release and lacked good cause for not releasing the

lien, the lienholder shall be liable to the owner of the real property or to a party with

an interest in the real property in the amount of one hundred dollars ($100) per day

for each day, beginning on the fifteenth day after receipt of the written notice, of the

violation for which good cause did not exist. This written notice shall be properly

addressed and sent by certified mail or delivered in person to the final lienholder or

final assignee as follows:

(a) For a corporation, to an officer at the lienholder's principal address or to an

agent for process located in Kentucky; however, if the corporation is a foreign

corporation and has not appointed an agent for process in Kentucky, then to

the agent for process in the state of domicile of the corporation;

(b) For an individual, to the individual at the address shown on the mortgage, at

the lienholder's residence or place of business, or at an address to which the

lienholder has directed that correspondence or payoff be sent;

(c) For a trust or an estate, to a fiduciary at the address shown on the mortgage or

at an address to which the lienholder has directed that correspondence or

payoff be sent; and

(d) For any other entity, including but not limited to limited liability companies,

partnerships, limited partnerships, limited liability partnerships, and

associations, to an officer, partner, or member at the entity's principal place of

business or to an agent for process.

(5) A lienholder that continues to fail to release a satisfied real estate lien, without good

cause, within forty-five (45) days from the date of written notice shall be liable to

the owner of the real property or to a party with an interest in the real property for

an additional four hundred dollars ($400) per day for each day for which good cause

did not exist after the forty-fifth day from the date of written notice, for a total of

five hundred dollars ($500) per day for each day for which good cause did not exist

after the forty-fifth day from the date of written notice. The lienholder shall also be

liable for any actual expense including a reasonable attorney's fee incurred by the

owner or a party with an interest in the real property in securing the release of real

property by such violation and in securing an award of damages. Damages under

this subsection for failure to record an assignment pursuant to KRS 382.360(3) shall

not exceed three (3) times the actual damages, plus attorney's fees and court costs,

but in no event less than five hundred dollars ($500).

(6) The former holder of a lien on real property shall send by regular mail a copy of the

lien release to the property owner at his or her last known address within seven (7)

days of the release. A former lienholder that violates this subsection shall be liable

to the owner of the real property for fifty dollars ($50) and any actual expense

incurred by the owner in obtaining documentation of the lien release.

(7) For the purposes of this section, "date of satisfaction" means that date of receipt by

a holder of a lien on real property of a sum of money in the form of a certified

check, cashier's check, wired transferred funds, or other form of payment

satisfactory to the lienholder that is sufficient to pay the principal, interest, and other

costs owing on the obligation that is secured by the lien on the property.

(8) The provisions of this section shall not apply when a lienholder is deceased and the

estate of the lienholder has not been settled.

(9) The state licensing agency, if applicable, or any holder of a lien on real property

shall be notified of the disposition of any actions brought under this section against

the lienholder.

(10) The provisions of this section shall be held and construed as ancillary and

supplemental to any other remedy provided by law.

(11) If more than one (1) owner or party with an interest in the real property brings an

action to recover damages under this section, any statutory damages shall be

allocated equally among recovering parties in the absence of agreement otherwise

among said parties. The entry of a judgment awarding damages shall bar a

subsequent action by any other person or entity to recover damages for the same

violation.