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Bill Summary · SB 288

SB 288 (2026RS) — Rights of Tenants (Kentucky)

Purpose and intent

  • Establishes a statewide right of first refusal for tenants in select small residential rental properties when the landlord intends to sell.
  • Applies to properties with three or fewer dwelling units and to tenants who have occupied the unit for at least six months under a written lease.
  • Aims to give eligible tenants an opportunity to purchase the property before it is sold to a third party, while preserving a clear path for the landlord to complete a sale if tenants do not buy.

Key provisions and changes

  • Scope and definitions

    • Applies to residential rental property with three (3) or fewer units.
    • “Owner” includes any person or entity holding title to the property.
    • “Tenant” is a person who has occupied for at least six months under a written lease.
    • “Material terms” for sale include price, settlement date, and contingencies; terms cannot restrict financing methods or the right of inspection.
    • A sale excludes transfers to certain relatives or entities, or in specified non-market scenarios (court orders, fiduciaries in estates, public housing authorities, land banks, etc.).

  • Tenant rights and process

    • Before listing for sale or considering unsolicited third-party offers, owners must provide all eligible tenants written notice of their right of first refusal.
    • Notice must:
    • Be delivered in a manner that confirms receipt (e.g., first-class mail with proof of delivery).
    • Conspicuously set forth material terms of the sale, state that the notice is not a binding contract, specify deadlines for offers and exclusive negotiation period, and, if applicable, include material terms of any unsolicited third-party offer.
    • Tenant response window: Tenants have 30 days to deliver an offer.
    • Owner response window: Within 5 days of receipt, the owner must either:
    • Accept the tenant’s offer if it contains the same or more favorable material terms as those in the notice (or as the third-party offer, if applicable); or
    • Issue a counteroffer with an explanation for any deviations.
    • Tenant decision on counteroffer: Tenants have 5 days to accept or reject; failure to respond within 5 days constitutes rejection.
    • Competing tenant offers: If more than one tenant submits an offer or accepts a counteroffer, the owner may select the most favorable offer without liability to other tenants.
    • Non-participation: If no tenant submits an offer or accepts a counteroffer, the owner may proceed with selling to a third party, and the tenant’s right of first refusal is waived.

  • Waivers and conflicts

    • The tenant right of first refusal is waived if:
    • A tenant does not participate or declines the process.
    • A tenant enters into a purchase contract that later terminates before settlement.
    • No lease provision or other agreement may waive these rights; such waivers are void and unenforceable.
    • Local ordinances or regulations conflicting with SB 288 are void and unenforceable.

  • Penalties and enforcement

    • Owners who violate the section may be fined up to $1,000 per violation.

Who is affected

  • Eligible tenants:
    • Tenants who have lived in a small residential rental property (three units or fewer) for at least six months under a written lease.
  • Property owners:
    • Owners of eligible properties must follow the notice and negotiation procedures or face penalties.
  • Local governments:
    • Preemption of conflicting local ordinances; enforcement posture may shift to state-level requirements.

Procedural and timeline aspects

  • Effective process timeline:
    • Before listing or accepting an unsolicited offer: send written notice with material terms and process details.
    • Tenant offer window: 30 days.
    • Owner response: within 5 days of receiving the offer.
    • Tenant decision on counteroffer: within 5 days.
  • If multiple tenants submit offers, the owner may select the most favorable one.
  • If no tenant participates or accepts an offer, the owner may sell to a third party and the right is waived.
  • If a tenant purchase contract fails before settlement, the right is waived.

Fiscal and administrative notes

  • Local government impact: Fiscal impact is indeterminable but likely minimal; the bill preempts conflicting local ordinances, potentially reducing local regulatory complexity.
  • Enforcement: Violations carry up to $1,000 per violation; local enforcement would align with state requirements.

Summary

SB 288 creates a state-level right of first refusal for tenants in small (three-unit or fewer) residential rental properties, requiring landlords to issue a notice of sale terms and to offer a 30-day window for tenants to submit purchase offers, with defined timelines for owner responses and potential counteroffers. The process is designed to be transparent and structured, with protections against waivers and preemption of conflicting local laws, and with penalties for noncompliance.

Compiled from official sources — confirm details with the bill’s official record.

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