Local Rule LR 65.1.1: Bond and Surety Requirements

LR 65.1.1 Bond and Surety Requirements

(a) General Requirements. In all civil and bankruptcy actions, the Clerk may -- unless the Court orders otherwise -- accept only the following as surety on a bond: (1) a surety company approved by the United States Department of Treasury; (2) cash in an amount set by the Court; or (3) a personal surety secured by real estate that complies with subsections (d), (e), (f), and (g) below.

(b) Powers of Attorney. A Treasury Department approved surety company may designate an agent in Kentucky to execute bonds. If so, the power of attorney designating the agent may be filed with the Clerk in the jury division in which the action is pending. In lieu of filing the power of attorney with the Clerk, a copy of the power of attorney must be appended to each bond executed.

(c) Unacceptable Personal Sureties. The Clerk must not accept the following as a personal surety on any bond: (1) an attorney; (2) a Court officer or employee; or (3) the United States Marshal or any deputy marshal.

(d) Personal Surety Secured by Real Estate; Generally. The Clerk must accept a personal surety secured by real estate under the following conditions:

(1) The real estate is located in Kentucky;

(2) The real estate has an unencumbered value of at least 110% of the bond amount;

(3) The real estate is not owned by a corporation or partnership; and

(4) If the property is held jointly, all joint tenants have executed the bond.

(e) Procedure for Posting Real Estate Bond. To post a real estate bond, the sureties must execute an affidavit providing the following information: (1) the owners' names and addresses; (2) an affiant's statement as to the assessed value from the Property Valuation Administrator's Office or, if that is not available, an appraisal by a licensed appraiser; and (3) a listing of all liens and mortgages on the property, including all but the current year's real estate taxes.

(f) Affidavit on Appearance Bonds. On appearance bonds, the affidavit required in (e) must be incorporated by reference in the Justification of Sureties portion of the Appearance Bond Form.

(g) Bond Execution and Deed Deposit. All parties to the deed and the bond must execute the bond and take the oath. The deed, or certified copy of the deed, must be deposited with the Clerk. Upon receipt of the deed, or certified copy of the deed, the Clerk must provide a receipt to the owner. If the bond is not forfeited, the deed must be returned to the property owner in person, or by certified mail, at the conclusion of the case.

(h) Lis Pendens Notice and Fees. The Clerk must file a lis pendens notice against the property in the County Clerk's Office in the county where the property is located. The required fee for filing the notice of lis pendens is required upon execution of the bond.