KRS 224.80-120: Identification of holders under covenant -- Obligations of holders and

of cabinet -- Priority of interests in real property existing at the time of

creation of an environmental covenant -- Subordination agreements.

(1) An environmental covenant may identify more than one (1) holder, and the interest

of a holder is an interest in real property.

(2) A right of the cabinet pursuant to KRS 224.80 -100 to 224.80 -210 or under an

environmental covenant shall not be deemed an interest in real property. The

obligations imposed on a property and holders of a property subject to an

environmental covenant shall be considered as ongoing obligations in furtherance of

protection of public health and the environment and are not intended to be

obligations that are red ucible to a monetary claim or dischargeable under

bankruptcy law.

(3) The following rules apply to persons with interests in real property in existence at

the time an environmental covenant is created or modified:

(a) A person with an interest that has priority under other law shall not be affected

by an environmental covenant, except when the owner of the interest is a party

to the covenant or subordinates his or her interest to the environmental

covenant in a subordination agreement.

(b) Nothing contained in KRS 224.80 -100 to 224.80 -210 shall require a person

that owns a prior interest to subordinate that interest to an environmental

covenant or to agree to be bound by an environmental covenant.

(c) The cabinet shall have the authority to disapprove an env ironmental covenant

if all prior interests to the real property are not subordinated to the

environmental covenant.

(d) A subordination agreement may be contained in the environmental covenant

covering real property or in a separate record. If the environm ental covenant

covers commonly owned property in a common interest community, the

record may be signed by any person authorized by the governing board of the

owners' association.

(e) A person's act of subordinating his or her prior interest in a real prope rty to an

environmental covenant shall affect the priority of that person's interest. The

act of subordinating a prior interest in a real property subject to an

environmental covenant shall not be presumed to impose any affirmative

obligation on the person with respect to the environmental covenant.