Iowa REALTORS® had a successful 2023 legislative session with our priority bills passing in a nearly unanimous, bipartisan vote in both chambers and being signed by Governor Reynolds. As leaders in promoting property ownership across Iowa, we are proud of the work REALTORS have done to make the dream of homeownership a reality for all by advocating for legislation to increase accessibility and affordability of property. Below we break down key pieces of legislation that go into effect on July 1, 2023.
In order to increase transparency in real estate transactions involving Homeowners Associations, Iowa REALTORS® worked to pass HF 432 which creates guidelines to increase timeliness and clear communication for these transactions. Under this bill:
HOAs or HOA management companies must make available certain records and documents to the unit owner or owner’s authorized agent within 10 business days of the request for documentation. These documents can be provided to the owner or authorized agent via paper copy, electronic copy, or via an internet site maintained by the HOA of which the unit owner or agent has access to.
HOAs may charge a reasonable fee for the production of these documents and records. This fee is not to exceed the estimated cost to produce or reproduce the documentation.
When a ruling by the Iowa Supreme Court in a slip and fall case created confusion surrounding the obligations and duty of care for an agent to a property listing, the Iowa Association of REALTORS® drafted HF 607 to clarify current practices. The legislation, which passed unanimously, states:
A licensee providing brokerage services is not the possessor of the property, the client maintains possession.
The duty of care to a property remains with the client for the entirety of the listing agreement. The agent does not have a duty of care to the property or with regard to a person entering, viewing, or traversing upon the property.
A licensee providing brokerage services is not liable for damage to the property or any physical injury, accident, or harm to a person entering the property, unless the licensee is the direct and proximate cause of the harm.
The client is responsible for the care, maintenance, repair, condition, and safety of the property.
Unfair Service Agreements
In recent years, REALTORS® across the country have witnessed the creation and use of 40-year exclusive right to list contracts. This predatory business practice often targets those on fixed incomes by offering a sum of cash up front (usually $500-$3,000) in exchange for the right to list a property for 40 years. These contracts were transferable to the next owner and cost around 6% of the home's value in penalty fees to break the contract. In order to be proactive in stopping this predatory practice from happening in Iowa, the Iowa Association of REALTORS® led several coalition partners to pass HF 475, which prohibits these unfair service agreements from being executed or enforced in the state.
If you have any questions regarding the changes above, please reach out to IAR government affairs director, Greta Haas.