KRS § 134.452 — KY Code / Title XI / Chapter 134 / Section 134.452
134.452 Third-party purchaser of certificate of delinquency -- Fees -- Reasonable attorneys' litigation fees -- Collection limitations -- Notice to proper owner -- Legislative findings
Status: in_force

134.452 Third-party purchaser of certificate of delinquency -- Fees --

Reasonable attorneys' litigation fees -- Collection limitations -- Notice to

proper owner -- Legislative findings.

(1) Notwithstanding any other provisions of this chapter, a third-party purchaser of

a certificate of delinquency shall be entitled to collect only the following

prelitigation fees:

(a) The amount actually paid for the certificate of delinquency;

(b) Interest as provided in KRS 134.125, calculated on the amount actually

paid to the county clerk from the date the certificate of delinquency was

purchased until paid; and

(c) 1. Prelitigation attorneys' fees, which may include amounts incurred for

collection efforts and costs related to notification, processing,

research, communication, compliance, legal costs, documentation,

and similar expenses, from the date the third-party purchaser

purchases the certificate of delinquency from the county clerk, to the

date on which the notice required by KRS 134.490(2) is mailed by

the third-party purchaser.

2. The amount that may be collected by the third-party purchaser as

prelitigation attorneys' fees shall be subject to the following

limitations:

a. i. If the amount paid for a certificate of delinquency is

between five dollars ($5) and three hundred fifty dollars

($350), actual reasonable fees incurred up to one

hundred percent (100) of the amount of the certificate of

delinquency, not to exceed three hundred fifty dollars

($350);

ii. If the amount paid for a certificate of delinquency is

between three hundred fifty-one dollars ($351) and seven

hundred dollars ($700), actual reasonable fees incurred

up to eighty percent (80) of the amount of the certificate

of delinquency, not to exceed five hundred sixty dollars

($560); and

iii. If the amount paid for a certificate of delinquency is

above seven hundred one dollars ($701), actual

reasonable fees incurred up to seventy percent (70) of

the amount of the certificate of delinquency, not to

exceed seven hundred dollars ($700); and

b. If a third-party purchaser is the owner of more than one (1)

certificate of delinquency against the same taxpayer, actual

and reasonable prelitigation attorneys' fees for all certificates of

delinquency against the same taxpayer shall not exceed one

and one-half (1.5) times the maximum amount permitted in

subdivision a. of this subparagraph for the largest tax bill owed

by the taxpayer.

3. The amounts allowed by subparagraph 2. of this paragraph shall not

accrue to the account of the delinquent taxpayer, nor be charged by

the third-party purchaser against the delinquent taxpayer all at one

(1) time unless the amount of certificate of delinquency is one

hundred seventy-five dollars ($175) or less. The third-party

purchaser may accrue to the account of the delinquent taxpayer,

and charge the delinquent taxpayer an amount equal to the lesser of

prelitigation attorney's fees incurred by the third-party purchaser

since the prior notice was sent or one hundred seventy-five dollars

($175), for each notice sent to the delinquent taxpayer, provided

that:

a. The total aggregate amount of prelitigation attorneys' fees that

may accrue to the account of the delinquent taxpayer and be

charged by the third-party purchaser against the delinquent

taxpayer shall not exceed the limitations established by

subparagraph 2.a. of this paragraph; and

b. Additional fees shall not accrue to the account of the

delinquent taxpayer or be charged by the third-party purchaser

against the delinquent taxpayer more frequently than every

ninety (90) days, regardless of how many notices the

third-party purchaser may send.

(2) If the delinquent taxpayer and the third-party purchaser enter into a payment

agreement, the third-party purchaser may collect the installment payment

processing fee authorized by KRS 134.490(5).

(3) (a) In addition to the fees established by subsections (1), (2), and (4) of this

section, a third-party purchaser may collect actual, reasonable attorneys'

fees and costs that arise due to the prosecution of collection remedies or

the protection of a certificate of delinquency that is involved in litigation.

Fees and costs permitted under this subsection include fees and costs

incurred from the first day after the notice required by KRS 134.490(2) is

sent through the day any litigation is finally concluded.

(b) For purposes of this subsection:

1. Actual attorneys' litigation fees up to two thousand dollars ($2,000)

may be reasonable if the fees are based upon documented work

performed at a rate commensurate with hourly rates customarily

charged by private attorneys in that jurisdiction for similar services.

A flat rate, without hours documented for work performed, may be

reasonable if the flat fee is determined to be discounted from the

usual and customary rates for comparable work; and

2. Any attorneys' litigation fee in excess of two thousand dollars

($2,000) shall be allowed if authorized by the court upon a finding

that the third-party purchaser incurred actual attorneys' litigation fees

in excess of two thousand dollars ($2,000) and that those attorneys'

litigation fees were warranted based upon the complexity of the

issues presented in the litigation.

(4) The third-party purchaser may collect administrative fees incurred for

preparing, recording, and releasing an assignment of the certificate of

delinquency in the county clerk's office, not to exceed one hundred fifteen

dollars ($115).

(5) The General Assembly recognizes that third-party purchasers play an

important role in the delinquent tax collection system, allowing taxing districts to

receive needed funds on a timely basis. The General Assembly has carefully

considered the fees and charges authorized by this section, and has

determined that the amounts established are reasonable based on the costs of

collection and fees and charges incurred in litigation.

(6) A certificate of delinquency owned by a third-party purchaser shall be deemed

a general intangible for the purposes of Article 9 of KRS Chapter 355.