371.160 Deposit in escrow of amount held back by owner in contract involving improvement of real estate. (1) If, in any contract in the amount of five hundred thousand dollars ($500,000) or more involving the improvement of real estate, a certain amount or percentage of the contract is held back by the owner, that retained amount shall be deposited in a separate escrow account with a bank or trust company authorized to do business in the Commonwealth of Kentucky. (2) As of the time of the deposit of the retained funds, they shall become the sole and separate property of the contractor to whom they are owed. (3) The escrow agent shall promptly invest all escrowed principal in obligations selected by the escrow agent in its discretion. (4) Upon satisfactory completion of the contract, to be evidenced by a written release by the owner, all funds accumulated in the escrow account, together with any interest thereon, shall be paid immediately to the contractor to whom it is owed. (5) The escrow agent shall be compensated for its services in an amount agreed to by the owner, contractor, and escrow agent. The compensation shall be a commercially reasonable fee commensurate with fees being charged for handling of escrow accounts of similar size and duration. The compensation shall be paid from the escrow account. (6) In the event the owner fails or refuses to execute the release provided for in subsection (4) of this section, then the contractor shall have a cause of action against the owner in a court of proper jurisdiction. (7) This section shall not apply to contracts with the Commonwealth, any county, charter county, urban-county government, or municipality, or any other political subdivision, agency, or instrumentality of the Commonwealth, or school boards. Effective: July 15, 1998 History: Amended 1998 Ky. Acts ch. 340, sec. 2, effective July 15, 1998. -- Created 1990 Ky. Acts ch. 506, sec. 1, effective July 13, 1990.