KRS 383.580: Security deposits.

(1) All landlords of residential property requiring security deposits prior to occupancy

shall be required to deposit all tenants' security deposits in an account used only for

that purpose, in any bank or other lending institution subject to regulation by the

Commonwealth of Kentucky or any agency of the United States government.

Prospective tenants shall be informed of the location of the separate account and the

account number.

(2) Prior to tendering any consideration deemed to be a security deposit, the prospective

tenant shall be presented with a comprehensive listing of any then -existing damage

to the unit which would be the basis for a charge against the security deposit and the

estimated dollar cost of repairing such damage. The tenant shall have the rig ht to

inspect the premises to ascertain the accuracy of such listing prior to taking

occupancy. The landlord and the tenant shall sign the listing, which signatures shall

be conclusive evidence of the accuracy of such listing, but shall not be construed to

be conclusive to latent defects. If the tenant shall refuse to sign such listing, he shall

state specifically in writing the items on the list to which he dissents, and shall sign

such statement of dissent.

(3) At the termination of occupancy, the landlor d shall inspect the premises and

compile a comprehensive listing of any damage to the unit which is the basis for

any charge against the security deposit and the estimated dollar cost of repairing

such damage. The tenant shall then have the right to inspec t the premises to

ascertain the accuracy of such listing. The landlord and the tenant shall sign the

listing, which signatures shall be conclusive evidence of the accuracy of such

listing. If the tenant shall refuse to sign such listing, he shall state spe cifically in

writing the items on the list to which he dissents, and shall sign such statement of

dissent.

(4) No landlord shall be entitled to retain any portion of a security deposit if the

security deposit was not deposited in a separate account as requ ired by subsection

(1) of this section and if the initial and final damage listings required by subsections

(2) and (3) of this section are not provided.

(5) A tenant who disputes the accuracy of the final damage listing given pursuant to

subsection (3) of this section may bring an action in District Court. Tenant's claim

shall be limited to those items from which the tenant specifically dissented in

accordance with the provisions of subsection (3) of this section, or except as

otherwise provided, and if th e tenant shall fail to sign the listing or specifically

dissent in accordance with subsection (3) of this section, the tenant shall not be

entitled to recover any damages under this section.

(6) In the event a tenant leaves not paying his last month's rent and does not demand a

return of his deposit, the landlord may, after thirty (30) days, remove the deposit

from the account and apply any such excess to the debt owing.

(7) In the event the tenant leaves not owing rent and having any refund due, the

landlord shall send notification to the last known or reasonably determinable

address, of the amount of any refund due the tenant. In the event the landlord shall

not have received a response from the tenant within sixty (60) days from the

sending of such notifi cation, the landlord may remove the deposit from the account

and retain it free from any claim of the tenant or any person claiming in his behalf.