KRS 371.160: Deposit in escrow of amount held back by owner in contract involving

improvement of real estate.

Except as provided in KRS 367.620 to 367.628:

(1) If, in any contract in the amount of two million dollars ($2,000,000) or more

involving the imp rovement of real estate, a certain amount or percentage of the

contract is held back by the owner, that retained amount shall be deposited in a

separate escrow account with a bank or trust company authorized to do business in

the Commonwealth of Kentucky;

(2) As of the time of the deposit of the retained funds, they shall become the sole and

separate property of the contractor to whom they are owed;

(3) The escrow agent shall promptly invest all escrowed principal in obligations

selected by the escrow agent in its discretion;

(4) Upon satisfactory completion of the contract, to be evidenced by a written release

by the owner, all funds accumulated in the escrow account, together with any

interest thereon, shall be paid immediately to the contractor to whom it is owed;

(5) The escrow agent shall be compensated for its services in an amount agreed to by

the owner, contractor, and escrow agent. The compensation shall be a commercially

reasonable fee commensurate with fees being charged for handling of escrow

accounts of similar size and duration. The compensation shall be paid from the

escrow account;

(6) In the event the owner fails or refuses to execute the release provided for in

subsection (4) of this section, then the contractor shall have a cause of action

against the owner in a court of proper jurisdiction; and

(7) This section shall not apply to contracts with the Commonwealth, any city, county,

charter county government, urban-county government, unified local government, or

consolidated local government, a ny other political subdivision, agency, or

instrumentality of the Commonwealth, or school boards.