Bill Text: IA HF2394 | 2023-2024 | 90th General Assembly | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: A bill for an act relating to the wholesaling of residential property by a wholesaler, and providing civil penalties. (Formerly HSB 637.) Effective date: 07/01/2024.
Spectrum: Committee Bill
Status: (Passed) 2024-04-10 - Signed by Governor. H.J. 773. [HF2394 Detail]
Download: Iowa-2023-HF2394-Introduced.html
Bill Title: A bill for an act relating to the wholesaling of residential property by a wholesaler, and providing civil penalties. (Formerly HSB 637.) Effective date: 07/01/2024.
Spectrum: Committee Bill
Status: (Passed) 2024-04-10 - Signed by Governor. H.J. 773. [HF2394 Detail]
Download: Iowa-2023-HF2394-Introduced.html
House
File
2394
-
Introduced
HOUSE
FILE
2394
BY
COMMITTEE
ON
COMMERCE
(SUCCESSOR
TO
HSB
637)
A
BILL
FOR
An
Act
relating
to
the
wholesaling
of
residential
property
by
a
1
wholesaler,
and
providing
civil
penalties.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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Section
1.
NEW
SECTION
.
543B.6A
Wholesaling
of
residential
1
property.
2
1.
As
used
in
this
section:
3
a.
“Residential
property”
means
real
property
that
includes
4
no
less
than
one
but
no
more
than
four
dwelling
units.
5
b.
“Wholesaler”
means
a
licensee,
or
a
person
represented
6
by
a
licensee,
who
holds
an
equitable
interest,
but
not
legal
7
title,
in
a
residential
property
for
the
purpose
of
selling
the
8
equitable
interest
to
a
buyer.
9
c.
“Wholesaling”
means
the
practice
of
a
wholesaler
entering
10
into
an
assignable
contract
with
an
owner
of
residential
11
property
for
the
purpose
of
marketing
and
selling
the
equitable
12
interest
of
the
residential
property
to
another
person.
13
2.
A
person
must
be
licensed
as
a
real
estate
broker
14
under
this
chapter,
or
be
represented
by
a
real
estate
broker
15
licensed
under
this
chapter,
to
engage
in
wholesaling.
16
3.
a.
A
wholesaler
shall
disclose
all
of
the
following
17
information
in
writing
to
all
parties
to
a
wholesale
18
transaction
prior
to
executing
a
contract
to
purchase
or
to
19
convey
an
equitable
interest
to
a
buyer
or
other
entity:
20
(1)
The
legal
identities
of
all
parties
to
the
wholesale
21
transaction.
22
(2)
An
explanation
of
the
wholesaling
process,
including
23
but
not
limited
to
disclosure
that
the
wholesaler
holds
an
24
equitable
interest
in
the
residential
property
that
is
the
25
subject
of
the
transaction
and
may
not
be
able
to
convey
title
26
to
the
property.
27
b.
A
wholesaler
shall
provide
a
copy
of
an
executed
agency
28
agreement
to
all
parties
to
a
wholesale
transaction
prior
29
to
executing
a
contract
to
purchase
or
convey
an
equitable
30
interest
to
a
buyer
or
other
entity.
31
c.
Notwithstanding
provisions
to
the
contrary
contained
in
a
32
contract
executed
pursuant
to
this
subsection,
if
a
wholesaler
33
fails
to
comply
with
the
disclosure
requirement
under
paragraph
34
“a”
,
the
seller
or
the
buyer
may
cancel
the
contract
at
any
time
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prior
to
the
closing
of
the
sale
of
the
residential
property
1
without
penalty,
and
may
retain
any
earnest
money
paid
by
the
2
wholesaler.
3
4.
An
individual
engaged
in
wholesaling
in
violation
of
4
this
section
shall
be
subject
to
a
civil
penalty
of
up
to
the
5
greater
of
ten
thousand
dollars,
or
ten
percent
of
the
sale
6
price
of
each
residential
property
for
which
the
individual
7
engaged
in
wholesaling
in
violation
of
this
section.
8
5.
The
real
estate
commission
shall
adopt
rules
pursuant
to
9
chapter
17A
necessary
to
implement
and
administer
this
section.
10
EXPLANATION
11
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
12
the
explanation’s
substance
by
the
members
of
the
general
assembly.
13
This
bill
relates
to
the
wholesaling
of
residential
property
14
by
a
wholesaler.
“Wholesaling”,
“residential
property”,
and
15
“wholesaler”
are
defined
in
the
bill.
16
The
bill
requires
a
person
to
be
licensed
as
a
real
estate
17
broker,
or
to
be
represented
by
a
licensee,
to
engage
in
18
wholesaling.
The
bill
permits
a
licensee
to
represent
a
19
wholesaler
in
a
wholesaling
transaction.
20
The
bill
requires
a
wholesaler
to
disclose
to
all
parties
21
to
a
wholesale
transaction
prior
to
executing
a
contract
to
22
purchase
or
to
convey
an
equitable
interest
to
a
buyer
or
other
23
entity
the
legal
identities
of
all
parties
to
the
wholesale
24
transaction
and
an
explanation
of
the
wholesaling
process,
25
including
disclosure
that
the
wholesaler
holds
an
equitable
26
interest
in
the
residential
property
and
may
not
be
able
to
27
convey
title
to
the
property.
The
bill
also
requires
the
28
wholesaler
to
provide
a
copy
of
an
executed
agency
agreement
to
29
all
parties
prior
to
executing
the
contract.
30
If
a
wholesaler
fails
to
comply
with
the
disclosure
31
requirements,
the
seller
or
the
buyer
may
cancel
the
contract
32
at
any
time
prior
to
the
closing
of
the
sale
of
residential
33
property
without
penalty,
and
may
retain
any
earnest
money
paid
34
by
the
wholesaler.
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2394
An
individual
engaged
in
wholesaling
in
violation
of
the
1
bill
is
subject
to
a
civil
penalty
of
up
to
the
greater
of
2
$10,000,
or
10
percent
of
the
sale
price
of
each
residential
3
property
for
which
the
individual
engaged
in
wholesaling
in
4
violation
of
the
bill.
5
The
real
estate
commission
shall
adopt
rules
as
necessary
to
6
implement
and
administer
the
bill.
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