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367.958 Sale of mausoleum or underground crypts or columbaria.
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Every person before engaging in a sale, contract for sale, reservation for sale or
agreement for sale of a mausoleum crypt within a mausoleum, underground crypt
within a crypt section, or columbarium niche within a mausoleum prior to the
completion of the construction thereof, shall give notice in writing to the Attorney
General of the commencement of such sale at least thirty (30) days prior thereto and
register with the Attorney General. Such registration shall be on forms provided by
the Attorney General.
Every person engaged in the sale of a mausoleum crypt, underground crypt or
columbarium niche shall commence construction thereof within twenty-four (24)
months of the date of such sale and shall complete such construction within sixty
(60) months of the date of such sale. A delay caused by strike, national emergency,
shortage of materials, civil disorder, natural disaster or any like occurrence beyond
the control of such person shall extend the time of such commencement and
completion by the length of such delay. This subsection shall not apply to the sale of
mausoleum crypts, underground crypts or columbarium niches if there has been any
sale in the same project prior to July 13, 1984. Prior projects shall have commenced
construction thereof within thirty-six (36) months of the date of such sale and shall
complete construction within seventy-two (72) months of the date of such sale.
Every person who plans to offer for sale space in a section of a mausoleum or bank
of underground crypts prior to its construction shall establish a preconstruction trust
account. The trust account shall be administered and operated in the same manner
as the merchandise trust account provided for in this chapter and shall be exclusive
of the merchandise trust account or such other trust accounts or funds that may be
required by law.
Every person shall place thirty-six percent (36%), not including interest or finance
charges, of all payments of money made to any person pursuant to any agreement,
contract or any series or combination of agreements or contracts which are for the
purchase of sections in a mausoleum, columbarium, or any kind of underground
crypt which at the time of the payment of money have not been completely and
totally constructed, in a trust fund account in a financial institution within thirty (30)
days after each calendar quarter of operations. Excepted therefrom, however, are
persons who have constructed in the past their own mausoleum using primarily
equipment owned by the self-constructing person and their own personnel with a
minimum of subcontracting, and in that event there shall be deposited a minimum
of twenty percent (20%) of all payments of money, subject, however, to the actual
cost. If, from project to project, their actual cost is in excess of twenty percent
(20%), the full cost percentage shall be deposited from project to project, not to
exceed thirty-six percent (36%). At the time of notification to the Attorney
General's office the self-constructing mausoleum person shall also notify the
Attorney General that he intends to self-construct and the percentage of contribution
of trust that is required.
All trust funds mentioned in this section shall be deposited in the name of the
person depositing said funds, with the financial institution as trustee, and shall be
held together with the interest, dividends, or accretions thereon, in trust, subject to
the provisions of KRS 367.932 to 367.974 and 367.991. The person at the time of
making deposit or investment shall furnish to the financial institution the name of
each payor, and the amount of payment on each account for which the deposit or
investment is being made.
(6) Deposits to such funds and the amounts deposited may be commingled, but the
accounting records shall establish a separate account for each prepaid contract and
shall show amounts deposited and the income and loss occurring thereon with
respect to each contract.
(7) All payments made to the preconstruction trust fund account shall remain in the
trust fund with the financial institution until the financial institution receives a
certified statement from the depositor stating that the particular project for which
the preconstruction trust fund has been established is totally completed. During the
construction stage, trust funds may be withdrawn by presenting the trustee with
appropriate evidence of expenditure for construction cost. The trustee shall
thereupon disburse moneys from the trust fund to pay for the expenses of
construction presented for payment.
(8) A trustee may rely upon all certifications and affidavits made pursuant to or
required by the provisions of KRS 367.932 to 367.974 and 367.991, and shall not
be liable to any person for such reliance.
(9) If a mausoleum section or bank of underground crypts is not completed within the
time limits set out in KRS 367.932 to 367.974 and 367.991, the financial institution
acting as trustee, if any, may contract for and cause said project to be completed and
paid therefor from the trust account funds deposited to the project's account, paying
any balance, less cost and expenses, to the depositor. In the event there is no
corporate trustee, or the trustee chooses not to serve in the capacity to complete
construction, the Attorney General shall appoint a committee to serve as trustees to
trust account funds deposited to the project's account, paying any balance, less cost
and expenses, to the cemetery company.
(10) If it is determined by the trustee after the expiration of the time of construction set
out above that there is not enough money in the trust fund account to complete the
project, the trustee shall make a refund of all moneys held to all purchasers, or his
heirs or assigns, in the amount of the deposit to the credit of their particular contract
and all income those funds have earned. The purchasers shall be entitled to receive
any remainder of the purchase price paid from the depositor. However, nothing
herein contained shall relieve any person from any liability for nonperformance of
the contract terms.
(11) If temporary entombment or inurnment is not used, upon written notification to the
seller, the personal representative or any purchaser of such space who dies before
completion of construction shall be entitled to a refund of all moneys paid into the
preconstruction trust fund for such space, including any income earned thereon, and
from the seller, the remainder of the purchase price paid.
(12) In lieu of the trust fund deposits required herein, the person may post with the
Attorney General, Division of Consumer Protection, a good and sufficient bond by a
surety company licensed to do business in Kentucky and in an amount sufficient to
cover all payments made by or on account of purchasers who have not received the
purchased property and services. This bond shall be held for the benefit of any
purchaser, or his or her heir or assign or duly authorized representative, who suffers
a loss of money paid for a preconstructed mausoleum crypt or niche or underground
crypt after July 13, 1984, due to the insolvency of the registrant, or failure to
construct within the time limits set out herein. If a bond is posted, the Attorney
General's office shall receive sixty (60) days' written notice in the event of
cancellation. On or before the cancellation date, the person shall comply with the
trust fund requirements herein or post another good and sufficient bond.
(13) Any person selling preconstruction mausoleum, columbarium or underground crypt
contracts shall pay to the Attorney General five dollars ($5) for each sale of said
contract and all of which fees shall be remitted by the person collecting them to the
Attorney General at least once each month, and such funds shall be used by the
Attorney General in administering this chapter.
Effective: July 13, 1984
History: Repealed, reenacted, and amended as KRS 367.958, 1984 Ky. Acts ch. 116,
sec. 16, effective July 13, 1984. -- Created 1976 Ky. Acts ch. 294, sec. 9.
Formerly codified as KRS 307.170.
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