Current through Register Vol. 50, No. 9, March 1, 2024
NECESSITY, FUNCTION, AND CONFORMITY: This administrative
regulation is necessitated by
KRS
367.480, which requires the Attorney General
to promulgate rules and administrative regulations which will ensure an
adequate disclosure to the purchaser of recreational and retirement use land
the probable costs of any necessary maintenance or improvements of such land
which may accrue in the future.
Section
1. Disclosures. Any subdivider of recreation and retirement use
land as defined by
KRS 367.472 shall
give a full and complete disclosure to the purchaser of a lot, parcel, unit or
other interest thereof of any probable costs of any necessary maintenance of
improvements of said land which may accrue in the future. Said disclosure must
be made both orally and in writing prior to the signing of a contract or
agreement to purchase. Said disclosure shall include but is not limited to:
(1) The probable costs for each of the
following:
(a) Maintenance of
improvements;
(b) The cost of taxes
for the property as of the date the contract or agreement to purchase is
signed, as well as any tax increases that will occur or which there is
reasonable cause to believe could occur within the next five (5)
years;
(c) The cost of any
assessments to the property at the time the contract or agreement to purchase
is signed, as well as a reasonable projection of increases in such assessments
which could occur within the next five (5) years;
(d) Cost of repairs and other
improvements;
(2)
Whether any maintenance of improvements costs, taxes, assessments, repair or
other improvement costs are being assumed or borne by the subdivider at the
time the solicitation for sale is made and, if so, the amount assumed by the
subdivider for each such item, the date the subdivider will no longer assume or
bear said costs, and those who will assume or bear such costs once the
subdivider is no longer liable;
(3)
Whether any person or persons, as defined by
KRS
367.472(3), other than the
subdivider, assumes or bears any maintenance costs, taxes, assessments, repair
or improvement costs at the time the solicitation for sale is made and, if so,
the amount assumed by this person or persons for each such item, the date this
person or persons will no longer assume or bear such costs, and those who will
assume or bear such costs once this person or persons is no longer
liable;
(4) Whether membership in
an organization or association of property owners is required and whether the
cost of said association is borne in whole or in part by the subdivider or the
purchaser. If such costs are borne in whole or in part by the subdivider, the
subdivider must disclose:
(a) The amount of
costs being borne by the subdivider and the amount being borne by the
purchasers;
(b) The amount of cost
to the purchaser when the subdivider stops bearing the costs;
(c) The date on which the subdivider will
stop bearing the costs;
(d) The
number of property owners and/or association members upon which this cost
figure is based;
(5) Any
projection of cost that has been made or can reasonably be made for future
repairs or improvements to the property within the next five (5) years which
will be paid directly or indirectly by the purchaser;
(6) Whether future development and/or
construction is anticipated by the subdivider and whether said development
and/or construction can reasonably be expected to result directly or indirectly
in added costs for maintenance of improvements, taxes, assessments, repairs or
other improvements to a property owner. If additional costs are anticipated,
the subdivider must disclose:
(a) Whether
these costs will be borne in whole or in part by the subdivider;
(b) The amount of costs being borne by the
subdivider;
(c) The date on which
the subdivider will stop bearing the cost;
(d) The amount of the costs to the purchaser
for the next five (5) years;
(e)
The number of property owners upon which this cost figure is based;
(7) Any other costs or fees
assessed directly or indirectly to the purchaser for maintaining the property
that can be reasonably anticipated by the subdivider for the next five (5)
years.
Section 2. The
subdivider shall file with the Office of the Attorney General, Division of
Consumer Protection, a copy of the written disclosures required by Section 1 of
this regulation. The subdivider is required to keep current the information on
which the disclosures required by Section 1 of this regulation are based and
shall immediately notify the division of any material changes in the
information contained in the disclosure and shall make appropriate amendment of
the written and oral disclosure statements.
Section 3. Penalties. Any person who fails to
make the oral and written disclosures required by Section 1 of this regulation
shall be subject to prosecution pursuant to
KRS
367.484.