Subordination Agreement

KRS 382.385 (3)

This document is recorded to establish the priority of mortgages and is filed in the Mortgage Book. This document is a written agreement between two lenders. The mortgagor (borrower) does NOT sign this document.

The document must have the following:

  • Name of the subordinating lender (KRS 382.200 & KRS 382.340)
  • Name and address of the superior lender (KRS 382.200 & KRS 382.335)
  • Description of mortgage being subordinated, i.e. original mortgage book and page reference (sometimes the legal description is included, but not required. (Common Law and OAG 81-100)
  • Signature of the subordinating lender
  • Signature must be notarized (KRS 382.130)
  • Preparation Statement (KRS 382.335)
  • The clerk shall request a return mail address (KRS 382.240)

KRS 382.290 states that only the legal holder of a mortgage can release or assign a mortgage, therefore the same must apply to a subordination agreement. The legal holder of the mortgage is the only signature that is required on this document. Since the agreement is between two lending parties, the borrower does not need to sign the document.