Kentucky Local Protected Classes Go Beyond Federal Law

Kentucky updated its consumer protection rules in 2024 to specifically regulate listing agreements, and most study materials have not caught up.

The KREC administers real estate licensing in Kentucky. The PSI exam includes 50 state specific questions and 80 national questions, with a passing threshold of 75%. If your study materials were written before the 2024 KCPA amendments took effect, you may be preparing with content that no longer reflects what the exam actually tests. Local fair housing classes, the updated consumer protection standards for listing agreements, and Kentucky's multi-form agency disclosure system are the three areas where underprepared candidates lose the most points on the state portion.

Local Protected Classes

Here's the thing most people miss: Kentucky's state fair housing law tracks the seven federal protected classes, but the exam doesn't stop there. Louisville and Lexington have enacted local ordinances that add sexual orientation and gender identity. The PSI exam tests whether a Kentucky licensee must comply with those local additions, and the answer is yes, regardless of whether state law reflects them.

Kentucky's fair housing covers federal classes, but cities like Louisville and Lexington add sexual orientation and gender identity protections, the exam tests whether agents must comply with local ordinances beyond state law (they must).

Kentucky adds local protected classes beyond the federal Fair Housing Act's seven categories. West Virginia also expands state-level protections, and Mississippi tests fair housing under its own statute. Neither state adds the same local class combinations that Kentucky candidates must know for their exam.

Know which cities have enacted additional protections, which classes those ordinances add, and that licensees operating in those jurisdictions are bound by local law even when state law is silent. The KREC exam will present a scenario set in Louisville or Lexington and ask whether a licensee violated fair housing. The correct answer depends on knowing that the local ordinance applies and that compliance is mandatory.

Consumer Protection Act

The 2024 KCPA amendments targeting residential listing agreements are new enough that most prep materials don't address them, which makes this section a strong source of exam questions for the foreseeable future. I know, I know, another consumer protection amendment. But this one actually matters on the exam.

Kentucky's KCPA was amended in 2024 to specifically regulate residential listing agreements, making prohibited provisions void and classifying violations as "unfair, false, misleading, or deceptive" trade practices.

Know which listing agreement provisions are now prohibited under the amended KCPA, understand that a prohibited clause is void even if both parties signed it, and know that including such a clause constitutes an unfair or deceptive trade practice subject to KREC disciplinary action. The PSI exam will present a listing agreement with a problematic clause and ask what the legal consequence is. The answer is that the clause is void, not voidable, and the presence of a signature doesn't save it.

Agency Disclosure Forms

Kentucky uses three separate Commission forms: KREC 400, 401S, and 401B, covering five distinct relationship types. The PSI exam tests which form applies to which relationship and when each must be presented, treating designated agency and limited dual agency as separate categories with different disclosure requirements.

Kentucky uses a multi-form system (KREC Forms 400, 401S, 401B) covering five relationship types, the exam tests when each form must be presented and the difference between designated agency and limited dual agency.

Let me break this down. Know Form 400 as the general disclosure document and understand when Forms 401S and 401B are required instead. Know that designated agency and limited dual agency are distinct relationship types under Kentucky law with different consent and disclosure obligations. The KREC exam will describe a transaction and ask which form the licensee must provide and when, and the correct answer requires knowing which of the five relationship types applies to the scenario, not just that Kentucky uses written agency disclosures.