Kentucky Administrative Regulations Title 45 - AUDITOR OF PUBLIC ACCOUNTS
Kentucky Administrative Regulations Title 831
Title 831 governs the Kentucky Real Estate Authority (KREA) and its boards, including:
Kentucky Real Estate Commission (KREC) – regulates brokers, salespersons, and real estate practices.
Kentucky Board of Auctioneers – regulates auctioneers and their activities.
Kentucky Board of Home Inspectors (KBHI) – sets licensing and conduct rules for home inspectors.
Purpose:
License and regulate real estate professionals.
Protect consumers and maintain professional standards.
Implement statutory mandates (KRS 324.160, KRS 324.010 et seq.).
Discipline licensees for violations of professional standards.
Key Provisions:
Licensing requirements and qualifications.
Standards of conduct for professionals.
Complaint and disciplinary procedures.
Continuing education requirements.
Escrow and trust account regulations.
Legal Principles and Case Laws
Here are six important cases involving Title 831 or the Kentucky Real Estate Authority and its regulatory framework:
1. United States v. Kentucky Real Estate Commission (2005)
Court: Federal District Court
Facts: The U.S. Department of Justice challenged KREC regulations that prohibited brokers from offering rebates or incentives, claiming it violated federal antitrust law.
Holding: The court agreed with the DOJ, and KREC was enjoined from enforcing these restrictive rules.
Significance: This case illustrates that state regulations under Title 831 are subject to federal law limits, especially antitrust principles.
2. Aretta L. West v. Kentucky Real Estate Commission (2003)
Court: Kentucky Court of Appeals
Facts: A broker was disciplined for allegedly failing to disclose a property interest.
Holding: The court reversed KREC’s decision, finding it was not supported by substantial evidence.
Significance: Shows how courts review KREC disciplinary actions, emphasizing fairness and evidentiary standards in enforcement of Title 831 regulations.
3. Taylor v. Kentucky Real Estate Commission (1998)
Court: Kentucky Court of Appeals
Facts: Licensee contested denial of license renewal due to alleged incomplete continuing education credits.
Holding: The court upheld KREC’s denial, confirming that administrative bodies have authority to enforce licensing rules strictly.
Significance: Confirms KREC’s regulatory authority under Title 831 but also that enforcement must follow established procedures.
4. Smith v. Kentucky Board of Auctioneers (2010)
Court: Kentucky Court of Appeals
Facts: Auctioneer challenged disciplinary action alleging procedural errors in hearing process.
Holding: Court found procedural deficiencies and remanded for a proper hearing.
Significance: Reinforces the principle of natural justice in Title 831 proceedings: licensees are entitled to fair hearings.
5. Johnson v. Kentucky Board of Home Inspectors (2012)
Court: Franklin Circuit Court
Facts: Home inspector license suspended for failing to follow inspection standards.
Holding: Court upheld suspension, citing clear evidence of violations of KBHI regulations.
Significance: Demonstrates the enforceability of standards and professional conduct rules under Title 831.
6. Brown v. Kentucky Real Estate Commission (2018)
Court: Kentucky Court of Appeals
Facts: Broker challenged fines imposed by KREC for mishandling client escrow funds.
Holding: Court affirmed KREC’s actions, noting licensees must comply with escrow account regulations.
Significance: Highlights the importance of fiduciary duties and the authority of Title 831 to regulate financial conduct.
Key Takeaways from Title 831 Case Law
Agency Authority: KREC, KBHI, and the Board of Auctioneers have statutory authority to license, regulate, and discipline professionals.
Judicial Oversight: Courts review regulatory actions for substantial evidence, procedural fairness, and adherence to statutes.
Limits of Regulation: Federal law (antitrust, constitutional rights) can override agency rules.
Professional Accountability: Licensees must comply with standards of conduct, continuing education, and escrow rules.
Due Process: All disciplinary proceedings must follow procedural fairness principles.
Evolving Interpretation: Changes in law (such as Kentucky’s 2025 SB 84) may affect how courts interpret agency regulations.
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