Bill Text: IA HF475 | 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 unfair residential real estate service agreements, providing penalties, and making penalties applicable. (Formerly HSB 175.) Effective date: 07/01/2023.
Spectrum: Committee Bill
Status: (Passed) 2023-05-12 - Fiscal note. [HF475 Detail]
Download: Iowa-2023-HF475-Introduced.html
Bill Title: A bill for an act relating to unfair residential real estate service agreements, providing penalties, and making penalties applicable. (Formerly HSB 175.) Effective date: 07/01/2023.
Spectrum: Committee Bill
Status: (Passed) 2023-05-12 - Fiscal note. [HF475 Detail]
Download: Iowa-2023-HF475-Introduced.html
House
File
475
-
Introduced
HOUSE
FILE
475
BY
COMMITTEE
ON
COMMERCE
(SUCCESSOR
TO
HSB
175)
A
BILL
FOR
An
Act
relating
to
unfair
residential
real
estate
service
1
agreements,
providing
penalties,
and
making
penalties
2
applicable.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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475
Section
1.
NEW
SECTION
.
558B.1
Definitions.
1
As
used
in
this
chapter,
unless
the
context
otherwise
2
requires:
3
1.
a.
“Common
interest
community”
means
real
estate
4
described
in
a
declaration
with
respect
to
which
a
person,
5
by
virtue
of
the
person’s
ownership
of
a
unit,
is
obligated
6
to
pay
for
a
share
of
real
estate
taxes,
insurance
premiums,
7
maintenance,
or
improvement
of,
or
services
or
other
expenses
8
related
to,
common
elements,
other
units,
or
other
real
estate
9
described
in
the
declaration.
“Common
interest
community”
10
includes
a
planned
community,
a
cooperative
under
chapter
499A,
11
and
a
horizontal
property
regime
under
chapter
499B.
12
b.
“Common
interest
community”
does
not
include
any
of
the
13
following:
14
(1)
A
covenant
that
requires
the
owners
of
separate
parcels
15
of
real
estate
to
share
costs
or
other
obligations
related
to
a
16
wall,
driveway,
well,
or
other
similar
structure,
unless
all
17
such
owners
consent
in
writing
to
the
creation
of
a
common
18
interest
community.
19
(2)
Real
estate
described
in
paragraph
“a”
if
all
units
are
20
owned
by
a
single
owner.
21
2.
“Consumer”
means
a
natural
person
being
provided
a
22
service
under
a
service
agreement,
or
the
natural
person’s
23
legal
representative.
24
3.
“Record”
means
presentation
of
a
document
to
a
county
25
recorder
in
this
state
for
official
placement
in
the
public
26
land
records.
27
4.
“Residential
real
estate”
means
real
property
located
28
in
this
state
which
is
used
primarily
for
personal,
family,
29
or
household
purposes
and
is
improved
by
one
to
four
dwelling
30
units.
31
5.
“Service
agreement”
means
a
contract
under
which
a
person
32
agrees
to
provide
a
service
in
connection
with
the
maintenance
33
of,
the
purchase
of,
or
the
sale
of,
residential
real
estate.
34
Sec.
2.
NEW
SECTION
.
558B.2
Unfair
service
agreements
——
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penalties.
1
1.
A
service
agreement
shall
be
considered
unfair
under
this
2
section
if
a
service
that
is
covered
by
the
service
agreement
3
is
not
required
to
be
completely
performed
within
one
year
4
after
the
date
on
which
the
service
agreement
is
executed,
and
5
the
service
agreement
has
any
of
the
following
characteristics:
6
a.
The
service
agreement
purports
to
run
with
the
land
or
7
to
be
binding
on
future
owners
of
interests
in
the
residential
8
real
estate
that
is
the
subject
of
the
service
agreement.
9
b.
The
service
agreement
permits
assignment
of
the
right
to
10
provide
service
under
the
service
agreement
without
requiring
11
notice
to,
and
the
consent
of,
the
owner
of
the
residential
12
real
estate
that
is
the
subject
of
the
service
agreement.
13
c.
The
service
agreement
purports
to
create
a
lien,
14
encumbrance,
or
other
real
property
security
interest
on
the
15
residential
real
estate
that
is
the
subject
of
the
service
16
agreement.
17
2.
If
a
service
agreement
is
unfair
under
this
section,
the
18
service
agreement
shall
be
unenforceable.
19
3.
If
a
person
enters
into
an
unfair
service
agreement
20
with
a
consumer,
the
person
commits
an
unlawful
practice
under
21
section
714.16.
22
4.
a.
A
person
shall
not
cause
an
unfair
service
agreement,
23
or
a
notice
or
memorandum
of
an
unfair
service
agreement,
to
24
be
recorded.
25
b.
A
person
who
causes
an
unfair
service
agreement,
or
a
26
notice
or
memorandum
of
an
unfair
service
agreement,
to
be
27
recorded
commits
an
aggravated
misdemeanor.
28
c.
A
county
recorder
may
refuse
to
record
an
unfair
service
29
agreement.
30
d.
If
an
unfair
service
agreement
is
recorded,
the
recorded
31
service
agreement
shall
not
provide
actual
or
constructive
32
notice
against
an
otherwise
bona
fide
purchaser
or
creditor,
33
or
actual
or
constructive
notice
against
heirs
or
other
34
successors-in-interest
to
the
residential
real
estate
that
is
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the
subject
of
the
recorded
service
agreement.
1
e.
If
an
unfair
service
agreement
or
a
notice
or
memorandum
2
of
an
unfair
service
agreement
is
recorded,
any
person
with
an
3
interest
in
the
residential
real
estate
that
is
the
subject
4
of
the
service
agreement
may
apply
to
a
district
court
in
the
5
county
in
which
the
service
agreement
is
recorded
for
a
court
6
order
declaring
the
service
agreement
unenforceable.
7
f.
If
an
unfair
service
agreement
or
a
notice
or
memorandum
8
of
an
unfair
service
agreement
is
recorded,
any
person
with
an
9
interest
in
the
residential
real
estate
that
is
the
subject
10
of
the
recorded
service
agreement
may
recover
actual
damages,
11
costs,
and
attorney
fees
as
may
be
proven
against
the
person
12
who
recorded
the
service
agreement.
13
5.
This
section
does
not
apply
to
any
of
the
following:
14
a.
A
home
warranty
or
similar
agreement
that
covers
the
15
cost
of
maintenance
for
a
fixed
period
of
time
of
a
major
home
16
system
including
but
not
limited
to
plumbing,
electrical,
17
heating,
ventilation,
or
air
conditioning.
18
b.
An
insurance
contract.
19
c.
An
option
or
a
right
of
refusal
to
purchase
residential
20
real
estate.
21
d.
A
maintenance
or
repair
agreement
entered
into
by
the
22
homeowners’
association
of
a
common
interest
community.
23
e.
A
mortgage
loan,
or
a
commitment
to
make
or
to
receive
a
24
mortgage
loan.
25
f.
A
security
agreement
under
the
uniform
commercial
code
26
related
to
the
sale
or
rental
of
personal
property
or
fixtures.
27
g.
Water,
sewer,
electrical,
telephone,
cable,
internet,
or
28
any
other
utility
service
providers.
29
6.
This
section
shall
not
be
construed
to
impair
a
person’s
30
rights
established
by
a
mechanics’
lien
under
chapter
572.
31
Sec.
3.
Section
714.16,
subsection
2,
Code
2023,
is
amended
32
by
adding
the
following
new
paragraph:
33
NEW
PARAGRAPH
.
q.
It
shall
be
an
unlawful
practice
for
a
34
person
to
violate
section
558B.2,
subsection
3.
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EXPLANATION
1
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
2
the
explanation’s
substance
by
the
members
of
the
general
assembly.
3
This
bill
relates
to
unfair
residential
real
estate
service
4
agreements
(agreement).
5
An
agreement
shall
be
considered
unfair
under
the
bill
if
a
6
service
that
is
covered
by
the
agreement
is
not
required
to
be
7
completely
performed
within
one
year
after
the
date
on
which
8
the
agreement
is
executed,
and
the
agreement
has
any
of
the
9
characteristics
detailed
in
the
bill.
“Service
agreement”
is
10
defined
in
the
bill
as
a
contract
under
which
a
person
agrees
11
to
provide
a
service
in
connection
with
the
maintenance
of,
12
the
purchase
of,
or
the
sale
of,
residential
real
estate
(real
13
estate).
“Residential
real
estate”
is
also
defined
in
the
14
bill.
15
If
an
agreement
is
unfair,
the
agreement
shall
be
16
unenforceable.
If
a
person
enters
into
an
unfair
agreement
17
with
a
consumer,
the
person
commits
an
unlawful
practice.
18
Several
types
of
remedies
are
available
if
a
court
finds
that
a
19
person
has
committed
an
unlawful
practice,
including
injunctive
20
relief,
disgorgement
of
moneys
or
property,
and
a
civil
penalty
21
not
to
exceed
$40,000
per
violation.
22
The
bill
prohibits
a
person
from
causing
an
unfair
23
agreement,
or
a
notice
or
memorandum
(memo)
of
an
unfair
24
agreement,
to
be
recorded.
A
person
who
violates
this
25
prohibition
commits
an
aggravated
misdemeanor.
An
aggravated
26
misdemeanor
is
punishable
by
confinement
for
no
more
than
two
27
years
and
a
fine
of
at
least
$855
but
not
more
than
$8,540.
28
A
county
recorder
may
refuse
to
record
an
unfair
agreement.
29
If
an
unfair
agreement
is
recorded,
the
recorded
agreement
30
shall
not
provide
actual
or
constructive
notice
against
an
31
otherwise
bona
fide
purchaser
or
creditor,
or
against
heirs
32
or
other
successors-in-interest
to
the
real
estate
that
is
33
the
subject
of
the
agreement.
If
an
unfair
agreement
or
a
34
notice
or
memo
of
an
unfair
agreement
is
recorded,
any
person
35
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with
an
interest
in
the
real
estate
that
is
the
subject
of
1
the
agreement
may
apply
to
a
district
court
in
the
county
in
2
which
it
is
recorded
for
a
court
order
declaring
the
agreement
3
unenforceable,
and
any
person
with
an
interest
in
the
real
4
estate
that
is
the
subject
of
the
agreement
may
recover
actual
5
damages,
costs,
and
attorney
fees
as
may
be
proven
against
the
6
person
that
recorded
the
agreement.
7
The
bill
does
not
apply
to
a
home
warranty
or
similar
8
agreement,
an
insurance
contract,
an
option
or
right
of
refusal
9
to
purchase
real
estate,
a
maintenance
or
repair
agreement
10
entered
into
by
the
homeowners’
association
of
a
common
11
interest
community,
a
mortgage
loan
or
a
commitment
to
make
or
12
receive
a
mortgage
loan,
a
security
agreement
under
the
uniform
13
commercial
code
relating
to
the
sale
or
rental
of
personal
14
property
or
fixtures,
or
to
utility
service
providers.
“Common
15
interest
community”
is
defined
in
the
bill.
The
bill
shall
16
also
not
be
construed
to
impair
a
person’s
rights
established
17
by
a
mechanics’
lien.
18
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LSB
1944HV
(2)
90
ko/ns
5/
5