CHAPTER 76
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CHAPTER 76
( HB 88 )
AN ACT relating to unlawful trade practices and declaring an emergency.
Be it enacted by the General Assembly of the Commonwealth of Kentucky:
Section 1. KRS 286.2-685 is repealed, reenacted and amended as a new section of Subtitle 3 of KRS
Chapter 286 to read as follows:
(1) Except as provided in subsection (2) of this section, a[no] person doing business in this state shall not[may]
use the term "bank," "banker," "banking," "trust," or a similar term, which may include without limitation[ or]
a character, ideogram, phonogram, phrase, or foreign language word, in its name, including any use of the
name on stationery[,] or marketing material or in solicitations or advertising, in a manner that would imply
to the public that the person is engaged in the banking or trust business.
(2) [Subsection (1) of this section does not apply to ]A person may use a term prohibited by subsection (1) of this
section if the[depository institution or other entity organized under the laws of this state, another state, or the
United States to the extent that the depository institution or] person[other entity] is authorized:
(a) [Authorized ]Under its charter, or the laws of this state or the United States, to use the[a] term in its
name[, word, character, ideogram, phonogram, or phrase prohibited by subsection (1) of this section];
and
(b) [Authorized ]By the laws of this state or the United States to conduct the activities in which it is
engaged in this state.
(3) (a) The commissioner shall levy a civil penalty against any person that violates this section.
(b) The civil penalty shall be not less than one thousand dollars ($1,000) nor more than five thousand
dollars ($5,000) per violation, plus the state's costs and expenses for the examination, investigation,
and prosecution of the matter, including reasonable attorney's fees and court costs[For purposes of
this section, unless the context requires otherwise, "financial institution" means any person or entity
operating in the Commonwealth of Kentucky, as permitted under the laws of this state, any other state,
or the United States, as a bank, bank holding company, credit union, savings and loan association, or
any wholly owned subsidiary thereof.
(4) Except as provided in subsection (5) of this section, no person that is not a financial institution may use the
trade name, trademark, service mark, logo, or symbol, or any combination thereof, of any financial institution,
or any trade name, trademark, service mark, logo, or symbol, or any combination thereof, that is similar to the
trade name, trademark, service mark, logo, or symbol of such a financial institution, in any marketing material,
solicitation, or advertising provided or directed to another person in a manner such that a reasonable person
may be confused, mistaken, or deceived that the marketing material, solicitation, or advertising originated
from, is endorsed by, or has been consented to by the financial institution.
(5) Subsection (4) of this section shall not apply to a person who uses the trade name, trademark, service mark,
logo, or symbol of a financial institution with the written consent of the financial institution.
(6) The financial institution whose trade name, trademark, service mark, logo, or symbol has been used in
violation of this section may institute an action in the Franklin Circuit Court or any court of competent
jurisdiction against any person or entity in violation of subsection (4) of this section to enjoin a continuance of
any activity in violation of subsection (4) of this section and, if injured thereby, for the recovery of damages at
three (3) times the amount of any actual damages sustained and for civil penalties in the amount of one
thousand dollars ($1,000). It shall not be necessary that actual damages be alleged or proved in order to
recover injunctive relief or civil penalties. The penalties prescribed by this subsection shall be cumulative].
SECTION 2. A NEW SECTION OF KRS CHAPTER 367 IS CREATED TO READ AS FOLLOWS:
(1) As used in this section:
(a) 1. "Financial institution" means any bank, bank holding company, trust company, savings and
loan association, savings and loan association holding company, credit union, mortgage loan
company, mortgage loan broker, consumer loan company, broker-dealer, covered adviser, ACTS OF THE GENERAL ASSEMBLY 2
investment adviser, or wholly owned subsidiary of any of the foregoing, that is organized
under the laws of this state, any other state, or the United States.
2. As used in this paragraph, "broker-dealer," "covered adviser," and "investment adviser"
have the same meaning as in KRS 292.310; and
(b) "Person" has the same meaning as in KRS 367.110.
(2) Except as provided in subsection (3) of this section, a person that is not a financial institution shall not use
the following in any marketing material, solicitation, or advertising distributed in this state:
(a) The name, trade name, trademark, service mark, logo, or symbol, or any combination thereof, of any
financial institution; or
(b) Any name, trade name, trademark, service mark, logo, or symbol, or any combination thereof, that is
similar to the name, trade name, trademark, service mark, logo, or symbol of any financial
institution.
(3) Subsection (2) of this section shall not apply if:
(a) The marketing material, solicitation, or advertising is distributed with the consent of the financial
institution, which may be provided by the financial institution in written or electronic format; or
(b) 1. The person includes the following notice in the marketing material, solicitation, or
advertising:
"This marketing material, solicitation, or advertising did not originate from, is not endorsed
by, and has not been consented to by [insert name of financial institution and any affiliated
trade name, trademark, service mark, logo, or symbol used in the marketing material,
solicitation, or advertising]."
2. The notice required under subparagraph 1. of this paragraph shall be:
a. In boldface type that is not smaller than the type for any use referenced in subsection
(2) of this section; and
b. In a conspicuous location:
i. On the face of the marketing material, solicitation, or advertising; and
ii. In any other area of the marketing material, solicitation, or advertising where
any use referenced in subsection (2) of this section is visible or printed.
(4) (a) A violation of this section shall be deemed to be an unfair, false, misleading, or deceptive act or
practice in the conduct of trade or commerce in violation of KRS 367.170.
(b) All of the remedies, powers, and duties provided to the Attorney General or any other person under
KRS 367.110 to 367.300, and the penalties provided in KRS 367.990, pertaining to acts and practices
declared unlawful by KRS 367.170, shall apply with equal force and effect to a violation of this
section.
(5) (a) The Attorney General may institute an action in any court of competent jurisdiction against any
person alleged to have violated this section.
(b) A trade organization representing one (1) or more financial institution industries may institute an
action in any court of competent jurisdiction against any person alleged to have violated this section
with respect to two (2) or more financial institutions that are members of the represented industry or
industries.
(c) A financial institution may institute an action in any court of competent jurisdiction against any
person alleged to have used the following in violation of this section:
1. The financial institution's name, trade name, trademark, service mark, logo, or symbol, or any
combination thereof; or
2. Any name, trade name, trademark, service mark, logo, or symbol, or any combination thereof,
that is similar to the financial institution's name, trade name, trademark, service mark, logo,
or symbol. CHAPTER 76
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(d) In any action brought under this subsection, if the court finds that the person has violated this
section:
1. The plaintiff may:
a. Obtain an injunction to enjoin a continuance of the unlawful activity;
b. Recover damages at three (3) times the amount of any actual damages sustained, which
shall be paid to the injured person or persons; and
c. Be awarded reasonable attorney's fees and costs; and
2. In addition to the remedies and penalties provided under subparagraph 1. of this paragraph:
a. A plaintiff who is a trade organization or financial institution may recover a statutory
penalty in the amount of five thousand dollars ($5,000) per violation; and
b. The Attorney General may recover civil penalties in the amount of five thousand dollars
($5,000) per violation.
(e) It shall not be necessary that actual damages be alleged or proved in order to recover injunctive
relief, attorney's fees and costs, or the statutory penalty or civil penalties referenced in paragraph
(d)2. of this subsection.
(6) (a) The remedies and penalties prescribed in this section shall be cumulative.
(b) Nothing in this section shall be construed to limit or restrict the powers, duties, remedies, or penalties
available to the Attorney General, the Commonwealth, or any other person under any other statutory
or common law.
(7) The Attorney General may promulgate administrative regulations in accordance with KRS Chapter 13A
necessary to effectuate, or as an aid to the effectuation of, the proper enforcement of this section.
SECTION 3. A NEW SECTION OF KRS CHAPTER 367 IS CREATED TO READ AS FOLLOWS:
(1) As used in this section:
(a) "Residential real property" means real property located in this state that is:
1. Used primarily for personal, family, or household purposes; and
2. Improved by one (1) to four (4) dwelling units;
(b) "Service agreement" means an agreement under which an owner of residential real property is
required, in connection with the purchase or sale of the property, to:
1. Pay a real estate sales commission to a specified service provider;
2. Use a specified service provider to list the property for sale; or
3. Receive other real estate brokerage services from a specified service provider; and
(c) "Service provider" means a person, as defined in KRS 367.110, that:
1. Is entitled to a real estate sales commission or other payment for real estate brokerage services
under a service agreement; or
2. Is required or entitled to:
a. List residential real property for sale under a service agreement; or
b. Otherwise provide real estate brokerage services under a service agreement.
(2) A service agreement shall not:
(a) Provide for performance under the agreement, or contain any rights or obligations that may be
exercised or performed, more than two (2) years after the date the agreement becomes effective,
except this paragraph shall not bar enforcement of an otherwise valid agreement in accordance with
KRS 413.160 or another applicable statute of limitations;
(b) Except as otherwise provided under KRS 376.075 and 426.720: ACTS OF THE GENERAL ASSEMBLY 4
1. Be binding on future owners of interests in the residential real property or otherwise purport
to run with the land;
2. Create or impose a lien, encumbrance, or other real property interest on the residential real
property; or
3. Require or permit recording of the agreement or any notice or memorandum of the
agreement;
(c) To the extent permitted under federal law, restrict the resolution of any disputes, claims, or
controversies to binding arbitration or any other form of binding alternative dispute resolution;
(d) Include a waiver by the residential real property owner or owners of any rights to class action relief;
or
(e) Allow for assignment of the service provider's rights under, or interest in, the agreement without
notice to, and written agreement of, the residential real property owner or owners.
(3) (a) Any provision of a service agreement or a notice or memorandum of a service agreement, whether or
not recorded, that violates subsection (2) of this section shall:
1. Be void and unenforceable; and
2. Not bind title to residential real property or run with the land.
(b) This subsection shall be:
1. Retroactively applied to service agreements, and notices or memorandums of service
agreements, entered or recorded prior to the effective date of this Act; and
2. Prospectively applied to service agreements, and notices or memorandums of service
agreements, entered or recorded on or after the effective date of this Act.
(4) (a) A service provider shall not, on or after the effective date of this Act, record, or cause to be recorded,
a service agreement or a notice or memorandum of a service agreement, except as otherwise provided
in KRS 376.075 and 426.720.
(b) 1. Any service provider who violates this subsection shall be guilty of a Class B misdemeanor,
unless the conduct prohibited by this subsection constitutes another crime that provides for
greater punishment.
2. This paragraph may be enforced by the Attorney General or any Commonwealth's attorney or
county attorney of appropriate jurisdiction.
(c) Any person with an interest in residential real property that is subject to a service agreement, or a
notice or memorandum of a service agreement, recorded in violation of this subsection may institute
an action against the service provider in any court of competent jurisdiction to recover:
1. Actual damages arising from the recording; and
2. Attorney fees and costs incurred in the action.
(5) (a) A violation of this section on or after the effective date of this Act shall be deemed to be an unfair,
false, misleading, or deceptive act or practice in the conduct of trade or commerce in violation of
KRS 367.170.
(b) All of the remedies, powers, and duties provided to the Attorney General or any other person under
KRS 367.110 to 367.300, and the penalties provided in KRS 367.990, pertaining to acts and practices
declared unlawful by KRS 367.170, shall apply with equal force and effect to a violation of this
section.
(6) (a) The remedies and penalties prescribed in this section shall be cumulative.
(b) Nothing in this section shall be construed to limit or restrict the powers, duties, remedies, or penalties
available to the Attorney General, the Commonwealth, or any other person under any other statutory
or common law.
(7) The Attorney General may promulgate administrative regulations in accordance with KRS Chapter 13A
necessary to effectuate, or as an aid to the effectuation of, the proper enforcement of this section. CHAPTER 76
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Section 4. KRS 324.160 is amended to read as follows:
(1) The commission may order any or all of the following sanctions for violation of subsections (4) to (7) of this
section:
(a) Suspension of any license;
(b) Revocation of any license;
(c) Levy of fines not to exceed one thousand dollars ($1,000);
(d) Placing of any licensee on probation for a period of up to twelve (12) months;
(e) Requiring successful completion of academic credit hours or additional credit hours in real estate
courses from an accredited institution or approved real estate school; or
(f) Issuing a formal or informal reprimand.
(2) A canceled license may be renewed if the licensee pays all necessary fees and meets all other active licensure
requirements within one (1) year of the cancellation date. No licensee whose license is canceled shall engage
in real estate brokerage during the period of cancellation or receive any compensation for real estate brokerage
unless the compensation was earned prior to the effective date of the cancellation.
(3) No licensee whose license is suspended shall engage in real estate brokerage or receive any compensation for
real estate brokerage unless the compensation was earned prior to the suspension period.
(4) The commission shall impose sanctions set out in subsection (1) of this section against a licensee for:
(a) Obtaining a license through false or fraudulent representation;
(b) Making any substantial misrepresentation or failing to disclose known defects which substantially affect
the value of the property;
(c) Making any false promises of a character likely to influence, persuade, or induce;
(d) Pursuing a continued and flagrant course of misrepresentation or making false promises through agents
or advertising or otherwise;
(e) Acting for more than one (1) party in a transaction without the knowledge of all parties for whom the
licensee acts;
1. A real estate licensee shall not directly or indirectly buy property listed with him or her or with
the broker with whom the licensee is affiliated, nor acquire an interest therein, without first
indicating in writing on the offer to purchase his or her status as a licensee;
2. Before a licensee becomes a party to a contract to purchase real property, the licensee shall
disclose his or her status as a licensee to all parties to the transaction, in writing, on the sales
contract or on the offer to purchase;
3. Before a licensee sells, or receives compensation for property in which the licensee owns an
interest, the licensee shall disclose, in writing, any interest in the property to all parties to the
transaction;
(f) Accepting valuable consideration for the performance of any of the acts specified in this chapter, from
any person, except from his or her principal broker in accordance with a compensation agreement
between them. When acting as an agent in the management of property, a real estate licensee shall not
accept any commission, rebate, or profit on expenditures made for a client without the full knowledge
and consent of the client;
(g) Representing or attempting to represent a broker other than a principal broker, without the express
knowledge and consent of the principal broker with whom the licensee is affiliated;
(h) Failing to account for or remit, within a reasonable time, any money belonging to others that comes into
the licensee's possession. When acting as a property manager, the licensee shall render an accounting
and remit all moneys to his or her client strictly in accordance with the contract of employment;
(i) Paying valuable consideration to any person for services performed in violation of this chapter; ACTS OF THE GENERAL ASSEMBLY 6
(j) Entering a plea of guilty or an ["]Alford["] plea to, or having been found guilty of, or having been
convicted of, a felony or of a misdemeanor involving sexual misconduct the time for appeal has lapsed
or the judgment or conviction has been affirmed on appeal, irrespective of an order granting probation
following the conviction suspending the imposition of sentence;
(k) Failing to report a conviction, plea of guilty, or an ["]Alford["] plea to a felony or a misdemeanor
involving sexual misconduct to the commission;
(l) Soliciting, selling, or offering for sale real property under a scheme or program that constitutes a lottery,
contest, or deceptive practice;
(m) Acting in the dual capacity of licensee and undisclosed principal in any real estate transaction;
(n) Guaranteeing, authorizing, or permitting a person to guarantee that future profits shall result from a
resale of real property;
(o) Negotiating or attempting to negotiate the sale, exchange, lease, or rental of real property, or attempting
to obtain a brokerage agreement with a consumer knowing that the consumer had a written outstanding
contract granting exclusive agency with another real estate broker;
(p) Publishing or circulating an unjustified or unwarranted threat of legal proceedings or other action;
(q) Failing or refusing on demand to furnish copies of a document pertaining to a transaction dealing with
real estate to a person whose signature is affixed to the document;
(r) Failing, within a reasonable time, to provide information requested by the commission as a result of a
formal or informal complaint to the commission which may indicate a violation of this chapter;
(s) Paying valuable consideration to any person for the name of potential sellers or buyers, except as
otherwise provided in KRS 324.020(4);
(t) Violating any of the provisions in this chapter or any lawful order, rule, or administrative regulation
made or issued under the provisions of this chapter;
(u) Any other conduct that constitutes improper, fraudulent, or dishonest dealing; or
(v) Gross negligence.
(5) Any of the following[Any conduct constituting a violation of the Federal Fair Housing Act, including use of
scare tactics or blockbusting,] shall be considered improper conduct as referred to in subsection (4)(u) of this
section:
(a) Conduct constituting a violation of the Federal Fair Housing Act, including use of scare tactics or
blockbusting; or
(b) Conduct constituting a violation of Section 3 of this Act.
(6) No unlawful act or violation of any provision of this chapter by any affiliated licensee of the principal broker
shall be cause for holding the principal broker primarily liable, unless the broker has knowledge of the
unlawful violation and did not prevent it. The principal broker and his or her designated manager, if any, shall
exercise adequate supervision over the activities of licensed affiliates and all company employees to ensure
that violations of this chapter do not occur. The failure of a broker or his or her designated manager to exercise
adequate supervision of the licensed affiliates shall constitute a violation of this chapter.
(7) The practice of obtaining, negotiating, or attempting to negotiate "net listings" shall be considered improper
dealing.
Section 5. If any provision of this Act, or this Act's application to any person or circumstance, is held
invalid, the invalidity shall not affect other provisions or applications of the Act, which shall be given effect without
the invalid provision or application, and to this end the provisions and applications of this Act are severable.
Section 6. Whereas there is a significant and legitimate need to protect the public from unfair, false,
misleading, and deceptive trade practices, an emergency is declared to exist, and this Act takes effect upon its
passage and approval by the Governor or upon its otherwise becoming a law.
Signed by Governor April 4, 2024.