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Kentucky: House Bill (HB) 88 Protects Homebuyers from Predatory Contracts

By Mihaela Lica Butler | April 1, 2024

AARP Kentucky and the leading trade group for land title insurance, the American Land Title Association (ALTA), have expressed their appreciation to the Kentucky General Assembly for passing House Bill (HB) 88. The provisions of this historic law protect homeowners from the predatory practice of recording unfair real estate fee agreements, sometimes called Non-Title Recorded Agreements for Personal Services (NTRAPS), in property records. Representative Michael Meredith (R-KY) introduced a bill that would make NTRAPS null and void.

"The property rights of American homebuyers must be protected," said ALTA Vice President of Government Affairs Elizabeth Blosser. "A home often is a consumer's largest investment, and the best way to support the certainty of land ownership is through public policy. We have to ensure that there are no unreasonable restraints on a homebuyer's future ability to sell or refinance their property due to unwarranted transactional costs."

Since 2018, NTRAPS have been found in property records, preying on unsuspecting homeowners with low-ball offers of monetary incentives in return for long-term contracts that provide exclusive sale rights to their properties. The submission of non-transferable recorded interests (NTRAPS), which are liens, covenants, encumbrances, or security interests in return for money, makes future real estate transfers or financing more difficult and expensive.

"Several real estate companies have been using a predatory business model to target seniors and financially insecure homeowners," said Gary W. Adkins, volunteer state president of AARP Kentucky. "As a former prosecutor, unscrupulous players who intentionally engage in predatory business models targeting and misleading older consumers make my blood boil. Invariably, older adults are targeted specifically and, therefore, need extra safeguards to be protected from such an unfair, deceptive, and abusive practice. I can only imagine that AARP's Founder, Dr. Ethel Percy Andrus, felt the same sense of urgency and outrage when she found her retired colleague living in a chicken coop."

According to Samar Jha, the director of government affairs for AARP, the adoption of House Bill (HB) 88 is a result of ongoing advocacy efforts by AARP and ALTA to halt this damaging practice. "We expect and hope to work on similar legislative solutions in other states to help protect homeowners against such predatory housing practices."

HB 88 follows the goal of similar measures filed around the nation to address current NTRAPS and discourage unfair tactics that affect homeowners

The House Bill (HB) 88 will:

  • Make NTRAPS unenforceable by law.
  • Restrict and prohibit the recording of NTRAPS in property records.
  • Create penalties if NTRAPS are recorded in property records.
  • Provide for the removal of NTRAPS from property records and recovery of damages.

Kentucky Governor Andy Beshear will likely sign House Bill 88 into law in the next weeks.

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Mihaela Lica Butler is senior partner at Pamil Visions PR. She is a widely cited authority on public relations issues, with an experience of over 25 years in online PR, marketing, and SEO.She covers startups, online marketing, social media, SEO, and other topics of interest for Realty Biz News.
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