Real Estate Law Blog

How Does Hensley v. Gadd Affect Your Kentucky Short-Term Rental Business?

In Hensley v. Gadd, 560 S.W.3d 516 (2018), the Kentucky Supreme Court found that use of real estate as a short-term rental through a platform such as Airbnb or VRBO is “commercial” and not “residential” in nature and barred the property owner’s short-term rental business. The case therefore has important implications for real estate professionals of all stripes – including real estate brokers, real estate agents, investors, and property managers – with any short-term rental business in Kentucky. More >

Gross Lease or Triple Net Lease? What You Need to Know

When leasing a property for commercial use, there are a variety of lease types from which to choose. The two most common lease types are the gross lease and the triple net lease—but how do you know which is right for your situation? More >

Don’t Leave Your Clients High and Dry: What Real Estate Agents Should Know Before Using an Escalation Clause

The pandemic has made just about everything more difficult—including buying a home. In an extremely competitive market, hopeful buyers are looking for any strategy to gain an advantage and increase their chances of making a successful offer. One option your clients may want to consider is the inclusion of an escalation clause in their offer. But what exactly is an escalation clause—and how do your clients know if it’s the right choice for them? More >

Fractional Investment in Real Estate: What is It?

Not everyone has the investment resources of a certain real estate tycoon turned president, and that has often served as a bar to participation. In modern times, as real estate projects seek more and more investment, the solution has been to expand the class of those able to invest, bringing in new capital from investors who might not, as individuals, have the means to invest in high-end real estate. Enter fractional ownership of real estate – smaller investments from larger numbers of investors. This vehicle for investment can make the dream of serious real estate investment a reality. More >

Kentucky Legislature Tweaks "Full Name" Requirement on Deeds Yet Again

For the third year in a row, the Kentucky legislature has tweaked KRS 382.135, once more revising the “full name” requirement on a deed.

Prior to 2016, KRS 382.135 did not explicitly require a name on a deed for real property. The Kentucky legislature changed KRS 382.135(1) to include that a deed must contain “the full name of the grantor and grantee” of the property. Here, the problem is that the legislature failed to define “full name” for individuals or businesses, which caused confusion for both. Kentucky’s Attorney General subsequently produced an opinion, OAG 16-006, that the “full name” of an individual means, at minimum, that individual’s surname and “some combination of a personal name or initials.” The AG completely sidestepped the issue of business names, and this opinion on individual names isn’t binding in Kentucky courts anyway. More >

I Love It When a Comprehensive Plan Comes Together

It’s that time again – Lexington has been and remains busy assembling its 2018 Comprehensive Plan, titled “Imagine Lexington,” which will provide guidance on how the city will regulate land use over the next five years. This is a complex process that takes place in two phases. The recently concluded Phase I has already set out the goals and objectives of the plan, which we’ll examine in this blog post. The next phase, Elements and Implementation, may take the remainder of 2018 to hash out, although the Planning Commission suggests it will draft it through the summer. This plan is not just mandated by law; it helps mold a vision for the community of how it handles growth and expansion, which will shape the city for decades to come. More >

The Kind of Exchange to Like: Section 1031 Like-Kind Exchanges

Whenever you sell off a piece of investment property for a gain, you generally pay tax on that gain at the time of the sale. If you then use the post-tax proceeds to purchase another property that you later sell for a gain, you’ve effectively traded one property for another, but you were taxed twice along the way. Luckily, the tax code contains Section 1031, which allows for a tax deferred “exchange” of properties, and it can be a lifesaver for investors. More >

How a Restrictive Covenant Can Be Anything But

Restrictive covenants can be a protective measure to prevent competing uses, or they can be a thorn in the side of someone attempting to develop land subject to one. These clauses, whether set forth in deeds or as separate covenants, place restrictions on the uses of the property. Further, unless they have a particular expiration date, they run with the land despite future transfers. Whatever the intended effect of a restrictive covenant, they tend to be viewed with higher levels of scrutiny by the courts, as restrictions on land in perpetuity run against public policy preferences that hold that land should be given as freely as possible. In other words, you must choose the words of a restrictive covenant very carefully, or the provision may not mean what you think, or have the effect you intend. More >

Easements Made Easy: The Basics of Easements on Real Property

Easements are one of those real estate concepts on which it’s difficult to get a consensus. To some, they are harmless items that can be ignored. To others, they are a fatal encumbrance on a piece of property, restricting its use and diminishing its value. While both opinions may be true depending on the circumstances, the fact is that easements generally fall somewhere in between those two extremes. To understand why, it is important to have a general understanding of what easements are and how they affect real property rights. More >

Planning and Zoning: 3 Things to Look for When Purchasing Property

The conventional wisdom is that real property is a solid investment – after all, they aren’t making any more of it, and it’s often billed as “one of a kind.” Of course, just because the wisdom is conventional doesn’t mean it’s correct. In reality, there are a multitude of considerations that potential real property purchasers should take into account, and a careful review of these will generally result in sounder investment decisions. The condition of any buildings, access to the property and environmental assessments all should be factors in the purchase decision, but there are additional issues from a land use planning perspective that will impact whether an investment in real estate will pay off in the long run. More >