House File 475 - Reprinted HOUSE FILE 475 BY COMMITTEE ON COMMERCE (SUCCESSOR TO HSB 175) (As Amended and Passed by the House March 7, 2023 ) 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 HF 475 (3) 90 ko/ns/md
H.F. 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 persons 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 persons 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 35 -1- HF 475 (3) 90 ko/ns/md 1/ 4
H.F. 475 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 35 -2- HF 475 (3) 90 ko/ns/md 2/ 4
H.F. 475 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 caused the unfair service agreement or the notice or 13 memorandum of the unfair service agreement to be recorded. 14 5. This section does not apply to any of the following: 15 a. A home warranty or similar agreement that covers the 16 cost of maintenance for a fixed period of time of a major home 17 system including but not limited to plumbing, electrical, 18 heating, ventilation, or air conditioning. 19 b. An insurance contract. 20 c. An option or a right of refusal to purchase residential 21 real estate. 22 d. A maintenance or repair agreement entered into by the 23 homeowners association of a common interest community. 24 e. A mortgage loan, or a commitment to make or to receive a 25 mortgage loan. 26 f. A security agreement under the uniform commercial code 27 related to the sale or rental of personal property or fixtures. 28 g. Water, sewer, electrical, telephone, cable, internet, or 29 any other utility service providers. 30 6. This section shall not be construed to impair a persons 31 rights established by a mechanics lien under chapter 572. 32 Sec. 3. Section 714.16, subsection 2, Code 2023, is amended 33 by adding the following new paragraph: 34 NEW PARAGRAPH . q. It shall be an unlawful practice for a 35 -3- HF 475 (3) 90 ko/ns/md 3/ 4
H.F. 475 person to violate section 558B.2, subsection 3. 1 -4- HF 475 (3) 90 ko/ns/md 4/ 4