KRS 381.9157: Termination of condominium.

(1) Except in the case of a taking of all the units by eminent domain, a condominium

may be terminated only by agreement of unit owners of units to which at least

eighty percent (80%) of the votes in the association are allocated, or any larger

percentage the declaration specifies. The declaration may specify a smaller

percentage only if all of the units in the condominium are restricted exclusively to

nonresidential uses.

(2) An agreement to terminate a condominium shall be evidenced by the execution of a

termination agreement, or ratification thereof, in the same manner as a deed, by the

requisite number of unit owners. The termination agreement shall specify a date

after which the agreement will be void unless it is recorded before that date. A

termination agreement and all ratifications thereof shall be recorded in every county

in which a portion of the condominium is situated, and is effective only upon

recordation.

(3) In the case of a condominium containing only units having horizontal boundaries

described in the declaration, a termination agreement may provide that all the

common elements and units of the condominium shall be sold following

termination. If, pursuant to the agreement, any real estate in the condominium is to

be sold following termination, t he termination agreement shall set forth the

minimum terms of the sale.

(4) In the case of a condominium containing any units not having horizontal boundaries

described in the declaration, a termination agreement may provide for sale of the

common elements, but shall not require that the units be sold following termination,

unless the declaration as originally recorded provided otherwise or unless all the

unit owners consent to the sale.

(5) The association, on behalf of the unit owners, may contract for the sale of real estate

in the condominium, but the contract is not binding on the unit owners until

approved pursuant to subsections (1) and (2) of this section. If any real estate in the

condominium is to be sold following termination, title to that real e state, upon

termination, vests in the association as trustee for the holders of all interests in the

units. Thereafter, the association has all powers necessary and appropriate to effect

the sale. Until the sale has been concluded and the proceeds thereof distributed, the

association continues in existence with all powers it had before termination.

Proceeds of the sale shall be distributed to unit owners and lienholders as their

interests may appear, in proportion to the respective interests of unit owners as

provided in subsection (8) of this section. Unless otherwise specified in the

termination agreement, as long as the association holds title to the real estate, each

unit owner and his or her successors in interest have an exclusive right to occupancy

of the portion of the real estate that formerly constituted his or her unit. During the

period of that occupancy, each unit owner and his or her successors in interest

remain liable for all assessments and other obligations imposed on unit owners by

KRS 381.9101 to 381.9207 or the declaration.

(6) If the real estate constituting the condominium is not to be sold following

termination, title to the common elements and, in a condominium containing only

units having horizontal boundaries described in the declara tion, title to all the real

estate in the condominium, vests in the unit owners upon termination as tenants in

common in proportion to their respective interests as provided in subsection (8) of

this section, and liens on the units shift accordingly. While the tenancy in common

exists, each unit owner and his or her successors in interest have an exclusive right

to occupancy of the portion of the real estate that formerly constituted his or her

unit.

(7) Following termination of the condominium, the proceed s of any sale of real estate,

together with the assets of the association, are held by the association as trustee for

unit owners and holders of liens on the units as their interests may appear.

Following termination, creditors of the association holding liens on the units, which

were recorded before termination, may enforce those liens in the same manner as

any lienholder. All other creditors of the association are to be treated as if they had

perfected liens on the units immediately before termination.

(8) The respective interests of unit owners referred to in subsections (5), (6), and (7) of

this section are as follows:

(a) Except as provided in paragraph (b) of this subsection, the respective interests

of unit owners are the fair market values of their u nits, limited common

elements, and common element interests immediately before the termination,

as determined by one (1) or more independent appraisers selected by the

association. The decision of the independent appraisers shall be distributed to

the unit owners and becomes final unless disapproved within thirty (30) days

after distribution by unit owners of units to which twenty -five percent (25%)

of the votes in the association are allocated. The proportion of any unit

owner's interest to that of all uni t owners is determined by dividing the fair

market value of that unit owner's unit and common element interest by the

total fair market values of all the units and common elements; and

(b) If any unit or any limited common element is destroyed to the exten t that an

appraisal of the fair market value thereof before destruction cannot be made,

the interests of all unit owners are their respective common element interests

immediately before the termination.

(9) Except as provided in subsection (10) of this sec tion, foreclosure or enforcement of

a lien or encumbrance against the entire condominium does not of itself terminate

the condominium, and foreclosure or enforcement of a lien or encumbrance against

a portion of the condominium, other than withdrawable rea l estate, does not

withdraw that portion from the condominium. Foreclosure or enforcement of a lien

or encumbrance against withdrawable real estate does not of itself withdraw that

real estate from the condominium, but the person taking title thereto has t he right to

require from the association, upon request, an amendment excluding the real estate

from the condominium.

(10) If a lien or encumbrance against a portion of the real estate comprising the

condominium has priority over the declaration, the partie s foreclosing the lien or

encumbrance may, upon foreclosure, record an instrument excluding the real estate

subject to that lien or encumbrance from the condominium. The provisions of this

subsection shall not apply to any common elements constituting a portion of the real

estate to the extent the common elements as described in and subject to the

declaration have been developed.