Kentucky HOA Fines Require Written Notice and a Hearing, With No Dollar Cap

Kentucky went without any general homeowners association statute until 2023 Ky. Acts ch. 23 created the Planned Community Act at KRS 381.785 to 381.801, effective June 29, 2023. Fines live in KRS 381.797. Subsection (1) lists what the assessment for each lot consists of, and paragraph (b) is simply "Fines for violations levied by the board." Paragraph (e) adds the costs of enforcing the declaration, bylaws and rules, "including but not limited to reasonable attorney fees, costs, and other expense," so a board that hires a lawyer to chase a violation can bill that back to the lot as well.

The procedural protection is in subsection (2), and it is short: "Prior to imposing a charge for fines, damages, or an individual assessment pursuant to this section, the board shall give the owner a written notice and the opportunity to be heard." Kentucky sets no minimum cure period, no maximum fine, no per-day ceiling and no cap on cumulative fines. It does not prescribe who hears the owner, how far ahead the notice must go out, or what record the board must keep. Those details are left to the declaration and bylaws, which under KRS 381.787(5) must spell out the powers and duties of the board and the manner of calling and conducting board meetings.

Once levied, a fine is not a free-standing debt. Because KRS 381.797(1)(b) makes it part of the lot assessment, KRS 381.796(4) lets the board charge interest or a late fee on the past-due amount "at the rate established by the board, not to exceed any maximum rate allowed by law." KRS 381.799(1) then gives the association a continuing lien on the lot for unpaid assessments and "any related interest, fines, administrative late fees, enforcement assessments, collection costs, or reasonable attorney fees" that remain unpaid 30 days after any portion became due. Under KRS 381.799(2)(b) that recorded lien takes priority over everything except real estate taxes, governmental charges including local liens filed under KRS 65.8835, and mortgages or encumbrances recorded before the association's lien.

The one self-help remedy Kentucky spells out is in KRS 381.797(6): nonpayment lets the association "deny the owner access to any or all of the common areas," with a carve-out that access to a common-area road providing direct access to the owner's lot may not be denied. A Kentucky board may therefore shut a delinquent owner out of the pool, clubhouse or playground, but it may not gate them out of their own driveway.

Older Kentucky subdivisions should read KRS 381.786 before assuming the fine procedure applies. Subsection (1) subjects all planned communities in the Commonwealth to the Act but preserves any provision that was already in a governing document recorded before June 29, 2023. Subsection (3) removes from the Act entirely any current development or neighborhood that does not have a homeowners association meeting the KRS 381.785(13) definition of a planned community, and KRS 381.785(13)(b)1 excludes subdivisions whose only shared expense is a common roadway.

Condominiums are governed instead by the Kentucky Condominium Act. KRS 381.9167(1)(k) lets a unit owners' association "impose charges for late payment of assessments and, after notice and an opportunity to be heard, levy reasonable fines for violations of the declaration, bylaws, and rules and regulations of the association." The word reasonable does the work there that no dollar figure does: a condominium fine can be challenged as unreasonable in a way a planned-community fine, which carries no statutory adjective at all, cannot.

The board enforces its own fines; Kentucky has no state agency that reviews homeowners association penalties, no ombudsman and no administrative appeal. 799 lien. 797(1)(e). 797(6) keeps the right to use a common-area road that provides direct access to the lot. 795(2)(d) lets the board withhold records relating to assessment collection or lists of past-due owners.