Bill Text: IA HF566 | 2013-2014 | 85th General Assembly | Enrolled

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: A bill for an act to establish requirements relating to the transfer of an interest in real estate by or on behalf of certain entities formed or organized on a profit, cooperative, or not-for-profit basis, and including warranties and a limitation on actions. (Formerly HSB 208) Effective 7-1-13.

Spectrum: Committee Bill

Status: (Passed) 2013-12-31 - END OF 2013 ACTIONS [HF566 Detail]

Download: Iowa-2013-HF566-Enrolled.html

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House File 566
AN ACT
TO ESTABLISH REQUIREMENTS RELATING TO THE TRANSFER OF
AN INTEREST IN REAL ESTATE BY OR ON BEHALF OF CERTAIN
ENTITIES FORMED OR ORGANIZED ON A PROFIT, COOPERATIVE,
OR NOT-FOR-PROFIT BASIS, AND INCLUDING WARRANTIES AND A
LIMITATION ON ACTIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
DIVISION I
STATEMENT OF AUTHORITY
Section 1. Section 486A.303, subsection 7, Code 2013, is
amended to read as follows:
7. Unless earlier canceled, a filed A statement of
partnership authority is canceled by operation of law five
years after the date on which the statement, or the most
recent amendment, was filed with by the secretary of state
is effective until amended or canceled, unless an earlier
cancellation date is specified in the statement .
Sec. 2. Section 489.302, subsection 10, Code 2013, is
amended to read as follows:
10. Unless earlier canceled, an effective A statement of
authority is canceled by operation of law five years after the
date on which the statement, or its most recent amendment,
becomes effective filed by the secretary of state under section
489.205, subsection 1, is effective until amended or canceled
as provided in subsection 2, unless an earlier cancellation
date is specified in the statement . This cancellation operates
without need for any recording under subsection 6 or 7 .

House File 566, p. 2
Sec. 3. Section 501B.7, subsection 7, Code 2013, is amended
to read as follows:
7. Unless canceled earlier, a filed A statement of authority
and its most recent amendment expire five years after the
date of the most recent filing filed by the county recorder
as provided in subsection 2 is effective until amended or
canceled, unless an earlier cancellation date is specified in
the statement .
DIVISION II
LIMITED LIABILITY COMPANIES
Sec. 4. NEW SECTION . 489.407A Real estate interest
transferred by limited liability company or foreign limited
liability company.
1. A transfer of an interest in real estate situated in this
state held by a limited liability company or a foreign limited
liability company authorized to transact business in this state
is subject to the provisions of this section.
2. a. In a member-managed company, a transfer of an
interest in real estate held by the company may be undertaken
by any of the following:
(1) As provided in the operating agreement, or if the
operating agreement does not so provide, only with the consent
of all members.
(2) As provided in a statement of authority filed by the
company with the secretary of state and the recorder of the
county where the real estate is situated pursuant to section
489.302.
b. A requirement of paragraph “a” is applicable to every
transfer of an interest in real estate situated in this state
held by a member-managed company, whether or not the transfer
is in the ordinary course of the company’s business.
3. a. In a manager-managed company, a transfer of an
interest in real estate held by the company may be undertaken
by any of the following:
(1) As provided in the operating agreement, or if the
operating agreement does not so provide, only with the consent
of a majority of all managers.
(2) As provided in a statement of authority filed by the
company with the secretary of state and the recorder of the
county where the real estate is situated pursuant to section
489.302.
b. A requirement in paragraph “a” is applicable to every
transfer of an interest in real estate situated in this state

House File 566, p. 3
held by a manager-managed limited liability company, whether
or not the transfer is in the ordinary course of the company’s
business.
DIVISION III
TRANSFERS BY ENTITIES —— WARRANTY AND STATUTE OF LIMITATIONS
Sec. 5. NEW SECTION . 558.72 Real estate transfers by
certain entities.
1. As used in this section, unless the context otherwise
requires:
a. “Entity” means any of the following:
(1) A partnership, limited liability partnership, or
foreign limited liability partnership as provided in chapter
486A.
(2) A limited partnership, foreign limited partnership,
limited liability limited partnership, or foreign limited
liability limited partnership as provided in chapter 488.
(3) A limited liability company or foreign limited
liability company as provided in chapter 489.
(4) A corporation or foreign corporation as provided in
chapter 490 or a nonprofit corporation or foreign nonprofit
corporation as provided in chapter 504.
(5) A cooperative association as provided in chapter 497
or 498; an association, corporation, or foreign corporation
as provided in chapter 499; a cooperative as provided in
chapter 499A; a cooperative as provided in chapter 501; or a
cooperative or foreign cooperative as provided in chapter 501A.
(6) An unincorporated nonprofit association as provided in
chapter 501B.
b. “Instrument transferring an interest in real estate” means
a deed, real estate contract, lease, easement, mortgage, deed
of trust, or any other instrument used to effect the transfer
of an interest in real estate situated in this state by any act
to sell, transfer, convey, assign, lease, mortgage, or encumber
the interest in the real estate.
2. An instrument transferring an interest in real estate
situated in this state by an entity, unless clearly and
conspicuously provided to the contrary in the instrument,
includes a warranty to the transferee by the person executing
the instrument of all of the following:
a. That the transferor entity is in existence at the time of
the transfer.
b. That the person executing the instrument has been duly
authorized by the transferor entity to execute the instrument

House File 566, p. 4
on behalf of the entity.
c. That the person executing the instrument has the legal
capacity to execute the instrument.
d. That the person knows of no facts or legal claims that
might impair the validity of the transfer, including whether
the instrument was given in the ordinary course of business.
3. An action to invalidate a transfer of real estate by deed
or real estate contract by an entity shall be subject to the
time limitations set forth in section 614.14A.
Sec. 6. NEW SECTION . 614.14A Real estate interests
transferred by entities.
1. As used in this section, unless the context otherwise
requires:
a. (1) “Adverse claim” means a claim that the transfer
of an interest in real estate to a transferee is invalid and
should be set aside based on an allegation that the execution
and delivery of a deed or real estate contract was not
authorized by the entity.
(2) “Adverse claim” does not include a claim that a deed or
real estate contract purports to transfer a greater interest
than the entity legally could transfer.
b. “Entity” means the same as defined in section 558.72.
2. A transfer of an interest in real estate situated in this
state by an entity by a deed or real estate contract is subject
to the provisions of this section.
3. a. With regard to any deed or real estate contract
executed by an entity and filed of record with the recorder
of the county in which the real estate is situated, which is
recorded prior to the effective date of this Act, the holder of
an adverse claim shall not file an action, at law or in equity,
to enforce the adverse claim or to invalidate such transfer
five years after the effective date of this Act.
b. With regard to any deed or real estate contract executed
by an entity and filed of record with the recorder of the
county in which the real estate is situated, which is recorded
on or after the effective date of this Act, the holder of an
adverse claim shall not file an action, at law or in equity, to
enforce the adverse claim or to invalidate such transfer more
than two years after the date of recording of the instrument.
4. This section shall not be construed to limit any personal
action against a person who executed an instrument purportedly
transferring an interest in real estate on behalf of an entity
for damages based on a claim arising out of an allegation that

House File 566, p. 5
the execution and delivery of the instrument was not authorized
by the entity or that a warranty required in section 558.72 was
false.
______________________________
KRAIG PAULSEN
Speaker of the House
______________________________
PAM JOCHUM
President of the Senate
I hereby certify that this bill originated in the House and
is known as House File 566, Eighty-fifth General Assembly.
______________________________
CARMINE BOAL
Chief Clerk of the House
Approved _______________, 2013
______________________________
TERRY E. BRANSTAD
Governor