Corridor Notes · Due Diligence
Kentucky’s seller disclosure form does not apply to commercial property. The statute that creates it, KRS 324.360, opens by limiting itself to “sales and purchases involving single-family residential real estate dwellings.” A commercial buyer in Lexington therefore receives no standardized condition disclosure at all — not a shorter one, not a weaker one, none. That is not a loophole someone forgot to close. It is the design, and it quietly shifts the entire burden of discovering a building’s condition onto the buyer’s diligence period.
Does Kentucky’s Seller Disclosure Law Cover Commercial Property?
No. KRS 324.360 applies only to sales involving single-family residential dwellings where a licensee is compensated, so commercial transactions fall entirely outside it.
The distinction matters more than it first appears, because most buyers arrive at their first commercial purchase with residential instincts. If you have bought a house in Kentucky, you have seen the form. You remember a seller checking boxes about the roof and the basement, and you remember that the document arrived early enough to shape what you asked for next. None of that machinery exists on the commercial side. When an office building or a retail strip changes hands here, the seller is under no statutory obligation to hand you a condition summary before you write your offer.
Worth saying plainly: the absence of a required form is not the same thing as permission to conceal. Misrepresentation and fraud are governed by other bodies of law entirely, and that is a question for your attorney rather than your agent. I am a REALTOR®, not a lawyer, and the useful thing I can do is tell you exactly what the statute does and does not put in your hands before closing.
What Does Kentucky’s Residential Disclosure Form Actually Require?
The statute directs the Kentucky Real Estate Commission to create a form covering six categories, and it sets hard deadlines for delivering it to a prospective buyer.
Reading the residential requirement closely is the fastest way to understand what a commercial buyer is missing, because the legislature was specific. Under subsection (3), the form must provide for the seller’s disclosure of basement condition and whether it leaks; roof condition and whether it leaks; the source and condition of the water supply; the source and condition of sewage service; the working condition of component systems; and other matters the Kentucky Real Estate Commission deems appropriate — the agency the statute names to promulgate the form.
The timing provisions are just as concrete. The seller signs the form when the listing agreement is executed. The listing agent must deliver a copy to a prospective purchaser within seventy-two hours of receiving a written and signed offer to purchase. Where an owner sells without a listing agreement, any licensee involved provides a blank form and, if the owner completes it, delivers it to the buyer no later than one hundred twenty hours after an executory contract is created. The form is not required for new homes sold with a warranty, for auction sales, or for court-supervised foreclosures.
The same six questions, answered a different way
Here is the part worth keeping. Every category the residential form covers is still a live risk in a commercial building — nobody repealed roofs or sewer laterals. What changes is who produces the answer and what it costs. This table maps each statutory disclosure item to the instrument a commercial buyer uses to obtain the same information independently.
| What KRS 324.360 makes a residential seller disclose | How a commercial buyer obtains it instead |
|---|---|
| Basement condition and whether it leaks | Property condition assessment; moisture and foundation observations during the inspection walk |
| Roof condition and whether it leaks | Dedicated roof inspection, remaining service life estimate, and any transferable manufacturer warranty documentation |
| Source and condition of water supply | Utility verification with the serving provider; confirmation of tap size and service location |
| Source and condition of sewage service | Sewer lateral scope; confirmation of public sewer versus on-site system and its capacity for your intended use |
| Working condition of component systems | HVAC, electrical service capacity, plumbing and life-safety review — scaled to the building, not to a house |
| Other matters the commission deems appropriate | Contract-driven: document production, estoppel certificates, service contracts, and environmental screening |
In a house, the state decides what the seller tells you. In a commercial building, your contract decides — and a contract that asks for nothing gets nothing.
If There Is No Form, What Replaces It in a Commercial Deal?
The due diligence period replaces it. In commercial practice the buyer negotiates for time, access, and document production, then spends that window building the disclosure the seller never had to write.
That reframing is the whole job. A residential buyer reacts to a disclosure that already exists; a commercial buyer commissions one. Practically, that means the offer itself has to reserve three things: enough days to actually complete the work, a right of entry broad enough for your inspectors to do more than stand in the parking lot, and an obligation on the seller to produce what only the seller holds — existing leases and any amendments, a rent roll, service and maintenance contracts, and prior environmental or roofing reports if they exist. A due diligence period with no document-production obligation attached to it is a countdown clock with nothing to read.
Scale the scope to the building rather than to habit. A single-tenant retail box and a multi-tenant office building do not need the same review, and paying for a full environmental assessment on a property that has never held anything but a hair salon is how diligence budgets get spent in the wrong place. The commercial due diligence process is worth walking before you write the offer, because most of what protects you has to be in the contract before it is signed. If you want to see how the physical inspection piece differs from a residential walkthrough, that is covered separately in our notes on commercial property inspections in Lexington.
A note from practice
The pattern I watch for is a buyer treating the diligence period as a formality to be shortened in order to make an offer look stronger. It is an understandable instinct in a competitive situation, and it is usually the wrong lever. Days are the cheapest concession in a commercial contract and the most expensive one to buy back, because every specialist you may need — roofer, engineer, sewer camera — works on their own schedule, not on yours. When a buyer asks me where to give ground on price versus timeline, my general answer is that price is a number you can model and a shortened diligence window is a risk you cannot.
Does This Change If the Property Is Mixed-Use?
It can, and it is worth asking early. The statute keys to single-family residential dwellings, so how a mixed-use or small multifamily property is characterized in your specific transaction is a question to put to your attorney.
This is the one place where the residential and commercial rails genuinely blur, and it is also where confident internet answers are least reliable. A storefront with an apartment above it does not automatically resolve one way. Rather than guess, treat the characterization as a diligence item with a name and an owner, and get the answer in writing from counsel before you rely on it. If you are weighing this kind of property, our overview of buying commercial property in Lexington covers where the two processes diverge.
Does a commercial seller in Kentucky have to disclose known defects?
KRS 324.360’s form requirement does not extend to commercial property. Whether a particular seller has a duty to disclose a specific known defect is a legal question governed by other law and by your purchase contract, and it belongs with your attorney rather than your agent.
Can I ask a commercial seller to complete the residential disclosure form anyway?
You can ask for anything in a negotiation, and some sellers will answer a written questionnaire. Just recognize that you are requesting a contractual accommodation, not invoking a statutory right, so it is worth spending that leverage where it does the most good — usually on document production and diligence days.
How long should a commercial due diligence period be?
There is no statutory answer, and anyone quoting you a universal number is guessing. The honest way to set it is backward from the work: list the specialists the building actually requires, ask each what their current lead time is, and add margin for the report to come back and be read.
Last updated: August 29, 2026
By Marcos Gil, REALTOR® — Keller Williams Commonwealth · KY Real Estate License No. 296259 · Call or text (859) 310-1209.
Educational information about Kentucky real estate practice, not legal advice. Consult a licensed Kentucky attorney about your specific transaction.
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