Senate File 423 - Introduced SENATE FILE 423 BY JOCHUM , WAHLS , WEINER , BISIGNANO , PETERSEN , CELSI , TRONE GARRIOTT , GIDDENS , BOULTON , and KNOX A BILL FOR An Act relating to property law, including rental properties, 1 manufactured home communities, mobile home parks, and 2 actions relating to such properties, making penalties 3 applicable, and including effective date and applicability 4 provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 1163XS (5) 90 cm/ns
S.F. 423 DIVISION I 1 GROUNDS FOR TERMINATION OF TENANCY 2 Section 1. Section 562B.10, Code 2023, is amended by adding 3 the following new subsection: 4 NEW SUBSECTION . 4A. A landlord shall not terminate a 5 tenancy unless any of the following apply: 6 a. The tenant engaged in an act of material noncompliance 7 with the rental agreement. 8 b. The tenant committed a material violation of the 9 manufactured home community or mobile home park rules or 10 regulations. 11 c. The tenant committed any other violation of this chapter 12 for which termination is a remedy. 13 d. There exists a legitimate and material business reason 14 the impact of which is not specific to one tenant. 15 e. There is a change in the use of the land, and a change in 16 the use of the land is grounds for termination or nonrenewal 17 under the rental agreement. 18 Sec. 2. EFFECTIVE DATE. This division of this Act, being 19 deemed of immediate importance, takes effect upon enactment. 20 Sec. 3. APPLICABILITY. This division of this Act applies 21 to terminations of tenancies on or after the effective date of 22 this division of this Act. 23 DIVISION II 24 CONSUMER FRAUD 25 Sec. 4. Section 562B.4, Code 2023, is amended by adding the 26 following new subsection: 27 NEW SUBSECTION . 3. A violation of this chapter by a 28 landlord or the landlords agent is an unlawful practice under 29 section 714.16. 30 Sec. 5. Section 714.16, subsection 2, Code 2023, is amended 31 by adding the following new paragraph: 32 NEW PARAGRAPH . q. It is an unlawful practice for a landlord 33 or the landlords agent to violate any of the provisions of 34 chapter 562B. 35 -1- LSB 1163XS (5) 90 cm/ns 1/ 20
S.F. 423 Sec. 6. EFFECTIVE DATE. This division of this Act, being 1 deemed of immediate importance, takes effect upon enactment. 2 Sec. 7. APPLICABILITY. This division of this Act applies to 3 violations of chapter 562B occurring on or after the effective 4 date of this division of this Act. 5 DIVISION III 6 RENT INCREASES 7 Sec. 8. Section 562B.7, subsection 10, Code 2023, is amended 8 to read as follows: 9 10. Rent means a payment to be made to the landlord under 10 the rental agreement , including base rent, utilities, late 11 fees, and other payments made by the tenant to the landlord 12 under the rental agreement . 13 Sec. 9. Section 562B.14, subsection 7, Code 2023, is amended 14 by striking the subsection and inserting in lieu thereof the 15 following: 16 7. a. A landlord shall not increase the amount of rent 17 due by any tenant in a manufactured home community or mobile 18 home park unless the tenant is notified in writing of the 19 rent increase at least one hundred eighty days before the 20 effective date of the rent increase. The effective date of 21 any rent increase shall not be less than one year after either 22 the effective date of the most recent rent increase or the 23 beginning of the tenancy, whichever is later. 24 b. (1) Subject to paragraph a , a landlord may increase 25 the amount of rent due by any tenant in an amount greater than 26 the average annual increase of the consumer price index for all 27 urban consumers in the midwest region for the most recently 28 available preceding thirty-six-month period, if the landlord 29 demonstrates all of the following: 30 (a) The landlord, during the preceding twelve-month period, 31 has not been found in violation of any provision of this 32 chapter that threatens the health or safety of the tenants of 33 or visitors to the manufactured home community or mobile home 34 park that persists for more than fifteen days, beginning on the 35 -2- LSB 1163XS (5) 90 cm/ns 2/ 20
S.F. 423 day the landlord received notice of such violation. 1 (b) The proposed rent increase is directly related to 2 operating, maintaining, or improving the manufactured home 3 community or mobile home park, and is justified by one or more 4 of the following factors: 5 (i) The completion and cost of any capital improvements or 6 repair work in the manufactured home community or mobile home 7 park, as distinguished from ordinary repair, replacement, and 8 maintenance. 9 (ii) An increase in property taxes due on the manufactured 10 home community or mobile home park. 11 (iii) If the landlord is responsible for payment of one 12 or more utilities, an increase in utility expenses within the 13 manufactured home community or mobile home park. 14 (iv) An increase in insurance costs and financing 15 associated with the manufactured home community or mobile home 16 park. 17 (v) An increase in reasonable operating and maintenance 18 expenses relating to the manufactured home community or mobile 19 home park. 20 (vi) An increase in market rent. For purposes of this 21 subparagraph subdivision, market rent means that rent which 22 would result from market forces absent an unequal bargaining 23 position between the landlord and tenants. In determining 24 market rent, relevant considerations include rents charged 25 to recent new tenants of the manufactured home community or 26 mobile home park or rents charged by comparable manufactured 27 home communities or mobile home parks. To be comparable, 28 a manufactured home community or mobile home park must be 29 within the competitive area and must offer similar facilities, 30 services, amenities, and management. 31 (2) The department of revenue shall monitor the consumer 32 price index for all urban consumers in the midwest region and 33 report the relevant data to the consumer protection division of 34 the office of the attorney general for periodic publication. 35 -3- LSB 1163XS (5) 90 cm/ns 3/ 20
S.F. 423 c. The written notice of a rent increase provided to the 1 tenant must include the specific reasons for the increase 2 including the justification under paragraph b , if applicable. 3 d. A decrease in the number or quality of amenities, 4 services, or utilities provided under the rental agreement 5 without a corresponding and proportionate reduction in rent 6 shall be considered a rent increase for the purposes of this 7 chapter. 8 Sec. 10. EFFECTIVE DATE. This division of this Act, being 9 deemed of immediate importance, takes effect upon enactment. 10 Sec. 11. APPLICABILITY. The following applies to rent 11 increases under chapter 562B occurring on or after the 12 effective date of this division of this Act: 13 The portion of the section of this division of this Act 14 enacting section 562B.14, subsection 7, paragraphs a and d. 15 Sec. 12. APPLICABILITY. The following applies to rent 16 increases under chapter 562B occurring on or after July 1, 17 2023: 18 The portion of the section of this division of this Act 19 enacting section 562B.14, subsection 7, paragraphs b and c. 20 DIVISION IV 21 LANDLORD REMEDIES AND PROCEDURES 22 Sec. 13. Section 562A.9, subsection 4, Code 2023, is amended 23 to read as follows: 24 4. For rental agreements in which the rent does not exceed 25 seven hundred dollars per month, a rental agreement shall not 26 provide for a late fee that exceeds twelve dollars per day or a 27 total amount of sixty dollars per month. For rental agreements 28 in which the rent is greater than seven hundred dollars per 29 month but less than one thousand four hundred dollars per 30 month , a rental agreement shall not provide for a late fee that 31 exceeds twenty dollars per day or a total amount of one hundred 32 dollars per month. For rental agreements in which the rent is 33 at least one thousand four hundred dollars per month, a rental 34 agreement shall not provide for a late fee that exceeds two 35 -4- LSB 1163XS (5) 90 cm/ns 4/ 20
S.F. 423 percent of the rent per day or a total amount of ten percent of 1 the rent per month. 2 Sec. 14. Section 562B.10, subsection 4, Code 2023, is 3 amended to read as follows: 4 4. For rental agreements in which the rent does not exceed 5 seven hundred dollars per month, a rental agreement shall not 6 provide for a late fee that exceeds twelve dollars per day or a 7 total amount of sixty dollars per month. For rental agreements 8 in which the rent is greater than seven hundred dollars per 9 month but less than one thousand four hundred dollars per 10 month , a rental agreement shall not provide for a late fee that 11 exceeds twenty dollars per day or a total amount of one hundred 12 dollars per month. For rental agreements in which the rent is 13 at least one thousand four hundred dollars per month, a rental 14 agreement shall not provide for a late fee that exceeds two 15 percent of the rent per day or a total amount of ten percent of 16 the rent per month. 17 Sec. 15. Section 562B.10, subsection 7, paragraph a, Code 18 2023, is amended by striking the paragraph and inserting in 19 lieu thereof the following: 20 a. If a tenant who was sole owner of a mobile home dies 21 during the term of a rental agreement, then that persons heirs 22 or legal representative or the landlord shall have the right 23 to cancel the tenants lease by giving sixty days written 24 notice to the persons heirs or legal representative or to the 25 landlord, whichever is appropriate, and the heirs or the legal 26 representative shall have the same rights, privileges, and 27 liabilities of the original tenant. 28 DIVISION V 29 MANUFACTURED HOUSING PROGRAM FUND 30 Sec. 16. Section 16.45, subsection 1, Code 2023, is amended 31 to read as follows: 32 1. A manufactured housing program fund is created within 33 the authority to further the goal of providing affordable 34 housing to Iowans. The moneys in the fund are to be used for 35 -5- LSB 1163XS (5) 90 cm/ns 5/ 20
S.F. 423 the purpose of providing funding to financial institutions or 1 other lenders to finance the purchase by an individual of a 2 manufactured home that is in compliance with all laws, rules, 3 and standards that are applicable to manufactured homes and 4 manufactured housing. The manufactured housing program fund 5 is designed exclusively for manufactured homes sited on leased 6 land. 7 DIVISION VI 8 TENANT COUNTERCLAIM FOR LANDLORD NONCOMPLIANCE 9 Sec. 17. Section 562B.25, Code 2023, is amended by adding 10 the following new subsection: 11 NEW SUBSECTION . 5. a. In an action for possession based 12 upon nonpayment of the rent or in an action for rent where the 13 tenant is in possession, the tenant may counterclaim for an 14 amount which the tenant may recover under the rental agreement 15 or this chapter. In that event, the court from time to time 16 may order the tenant to pay into court all or part of the rent 17 accrued and thereafter accruing, and shall determine the amount 18 due to each party. The party to whom a net amount is owed 19 shall be paid first from the money paid into court, and the 20 balance by the other party. If rent does not remain due after 21 application of this section, judgment shall be entered for 22 the tenant in the action for possession. If the defense or 23 counterclaim by the tenant is without merit and is not raised 24 in good faith, the landlord may recover reasonable attorney 25 fees. 26 b. In an action for rent where the tenant is not in 27 possession, the tenant may counterclaim as provided in 28 paragraph a , but the tenant is not required to pay any rent 29 into court. 30 Sec. 18. EFFECTIVE DATE. This division of this Act, being 31 deemed of immediate importance, takes effect upon enactment. 32 Sec. 19. APPLICABILITY. This division of this Act applies 33 to actions for possession filed on or after the effective date 34 of this division of this Act. 35 -6- LSB 1163XS (5) 90 cm/ns 6/ 20
S.F. 423 DIVISION VII 1 UTILITY CHARGES 2 Sec. 20. Section 562B.14, subsection 6, paragraphs a and b, 3 Code 2023, are amended to read as follows: 4 a. The landlord or any person authorized to enter into 5 a rental agreement on the landlords behalf shall provide 6 a written explanation of utility rates, fees, charges, and 7 services , subject to section 562B.16, subsection 3, to the 8 prospective tenant before the rental agreement is signed unless 9 the utility charges are paid by the tenant directly to the 10 utility company. 11 b. Tenants shall be notified of any increase in utility 12 rates or charges in the manner set forth in subsection 7 for 13 rent increases, unless the landlord does not receive at least 14 ninety days prior notice of such increase from the utility 15 provider, in which case no prior notice of the increase from 16 the landlord to the tenant is required for the increase to 17 be effective the landlord shall provide notice to the tenant 18 within five business days of receiving the notice from the 19 utility provider . 20 Sec. 21. Section 562B.16, Code 2023, is amended by adding 21 the following new subsection: 22 NEW SUBSECTION . 3. A landlord that is responsible for 23 payment of utilities being provided to the tenant shall not 24 charge to the tenant an amount in excess of the actual cost of 25 the utility and as specified in writing under section 562B.14, 26 subsection 6. In addition to the actual cost of the utility, 27 a landlord that is responsible for the payment of one or more 28 utilities being provided to the tenant may impose a monthly 29 utility administration fee to each tenant not to exceed five 30 dollars per month. The amount of the utility administration 31 fee shall not exceed five dollars per month regardless of the 32 number of utilities being provided or the actual cost of the 33 utilities being provided. 34 Sec. 22. Section 562B.25, Code 2023, is amended by adding 35 -7- LSB 1163XS (5) 90 cm/ns 7/ 20
S.F. 423 the following new subsection: 1 NEW SUBSECTION . 2A. The failure of a tenant to pay utility 2 charges that exceed the actual cost of the utility provided 3 as required by section 562B.16, subsection 3, shall not be 4 considered noncompliance with the rental agreement. 5 Sec. 23. Section 714H.3, subsection 2, Code 2023, is amended 6 by adding the following new paragraph: 7 NEW PARAGRAPH . h. Section 562B.16, subsection 3. 8 DIVISION VIII 9 UNLAWFUL OUSTER 10 Sec. 24. Section 562B.24, Code 2023, is amended to read as 11 follows: 12 562B.24 Tenants remedies for landlords unlawful ouster, 13 exclusion or diminution of services. 14 If the landlord unlawfully removes or excludes the tenant 15 from the manufactured home community or mobile home park or 16 willfully diminishes services to the tenant by interrupting 17 or causing the interruption of electric, gas, water or other 18 essential service to the tenant, the tenant may recover 19 possession, require the restoration of essential services or 20 terminate the rental agreement and, in either case, recover an 21 amount not to exceed two months periodic rent , and twice the 22 actual damages sustained by the tenant , and reasonable attorney 23 fees . If the rental agreement is terminated, the landlord 24 shall return all prepaid rent and security. 25 Sec. 25. EFFECTIVE DATE. This division of this Act, being 26 deemed of immediate importance, takes effect upon enactment. 27 Sec. 26. APPLICABILITY. This division of this Act applies 28 to actions under section 562B.24, as amended in this division 29 of this Act, filed on or after the effective date of this 30 division of this Act. 31 DIVISION IX 32 TENANT CORRECTING DEFICIENCIES 33 Sec. 27. Section 562B.25, Code 2023, is amended by adding 34 the following new subsection: 35 -8- LSB 1163XS (5) 90 cm/ns 8/ 20
S.F. 423 NEW SUBSECTION . 4A. In any action by a landlord for 1 possession based upon nonpayment of rent, proof by the tenant 2 of all of the following shall be a defense to any action or 3 claim for possession by the landlord, and the amounts expended 4 by the tenant in correcting the deficiencies shall be deducted 5 from the amount claimed by the landlord as unpaid rent: 6 a. That the landlord failed to comply either with the rental 7 agreement or with section 562B.16. 8 b. That the tenant notified the landlord at least seven 9 days prior to the due date of the tenants rent payment of the 10 tenants intention to correct the condition constituting the 11 breach referred to in paragraph a at the landlords expense. 12 c. That the reasonable cost of correcting the condition 13 constituting the breach is equal to or less than one months 14 periodic rent. 15 d. That the tenant in good faith caused the condition 16 constituting the breach to be corrected prior to receipt of 17 written notice of the landlords intention to terminate the 18 rental agreement for nonpayment of rent. 19 Sec. 28. EFFECTIVE DATE. This division of this Act, being 20 deemed of immediate importance, takes effect upon enactment. 21 Sec. 29. APPLICABILITY. This division of this Act applies 22 to actions by a landlord for possession filed on or after the 23 effective date of this division of this Act. 24 DIVISION X 25 DENIAL OF RENTAL OR REFUSAL OF SALE 26 Sec. 30. Section 562B.19, subsection 3, paragraphs a and c, 27 Code 2023, are amended to read as follows: 28 a. Deny rental unless the tenant or prospective tenant 29 cannot conform to manufactured home community or park rules 30 and regulations. A decision to deny rental shall conform 31 to recognized principles, rules, and standards generally 32 accepted by the professional manufactured home community or 33 park industry to ensure the commercially reasonable safety and 34 financial security of comparable manufactured home communities 35 -9- LSB 1163XS (5) 90 cm/ns 9/ 20
S.F. 423 or mobile home parks. A landlord shall deliver the decision 1 in writing to the tenant or prospective tenant as soon as 2 commercially feasible and shall provide the basis for a denial 3 in writing to the tenant or prospective tenant at the time of 4 the decision. 5 c. Deny any resident of a manufactured home community or 6 mobile home park the right to sell that persons mobile home 7 at a price of the persons own choosing, but may reserve the 8 right to approve the purchaser of such mobile home as a tenant 9 but such permission may shall only be withheld for a legitimate 10 business reason within the recognized principles, rules, 11 and standards described in paragraph a , and shall not be 12 unreasonably withheld, provided however, that the landlord may, 13 in the event of a sale to a third party, in order to upgrade 14 the quality of the manufactured home community or mobile home 15 park, require that any mobile home in a rundown condition or in 16 disrepair be removed from the manufactured home community or 17 park within sixty days. If the landlord does not approve the 18 purchaser as a tenant, the landlord shall provide the purchaser 19 with written notice of such denial and the general reason for 20 the denial, but the landlord shall not be required to provide 21 a specific reason for the denial. If the landlord refuses 22 to approve the purchaser of the mobile home as a tenant, the 23 landlord shall provide a legitimate business reason for the 24 refusal in writing to the resident who is selling the mobile 25 home. 26 DIVISION XI 27 RENTAL AGREEMENT TERMS 28 Sec. 31. Section 562B.11, subsection 1, paragraph e, Code 29 2023, is amended to read as follows: 30 e. Agrees to modify the physical characteristics or 31 equipment of the mobile home, manufactured home, or modular 32 home in a way that would substantially impair the ability of 33 the tenant to move the home from the mobile home space, unless 34 such modification is required by federal law, including but not 35 -10- LSB 1163XS (5) 90 cm/ns 10/ 20
S.F. 423 limited to the model manufactured home installation standards, 1 24 C.F.R. pt. 3285, the manufactured home construction and 2 safety standards, 24 C.F.R. pt. 3280 , or the manufactured 3 home procedural and enforcement regulations, 24 C.F.R. 4 pt. 3282, or by state or local law, the manufacturers 5 installation instructions, any requirement arising from the 6 landlords financing of the home or of the mobile home park or 7 manufactured home community in which the home is located, or 8 unless such modification is otherwise necessary for the safe 9 and proper installation of the home. 10 Sec. 32. Section 562B.11, subsection 1, Code 2023, is 11 amended by adding the following new paragraphs: 12 NEW PARAGRAPH . f. Authorizes imposition of fines, 13 penalties, or fees solely as a punishment or in amounts in 14 excess of actual damages or costs incurred. 15 NEW PARAGRAPH . g. Authorizes a person to confess judgment 16 on a claim arising out of the rental agreement. 17 NEW PARAGRAPH . h. Authorizes prohibitions, limitations, 18 additional deposits, or other restrictive policies that are 19 not based on ordinary wear and tear expected to occur during a 20 tenancy or that are not based on community safety standards. 21 Sec. 33. Section 562B.11, subsection 3, Code 2023, is 22 amended to read as follows: 23 3. A provision prohibited by this section included in a 24 rental agreement is unenforceable. If a landlord or tenant 25 knowingly and willfully uses a rental agreement containing 26 provisions known to be prohibited by this chapter , the other 27 party tenant may recover actual damages sustained by the tenant 28 and not more than three months periodic rent and reasonable 29 attorney fees . 30 DIVISION XII 31 RENTAL DEPOSITS 32 Sec. 34. Section 562B.7, subsection 12, Code 2023, is 33 amended to read as follows: 34 12. Rental deposit means a deposit of money to secure 35 -11- LSB 1163XS (5) 90 cm/ns 11/ 20
S.F. 423 performance of a mobile home space rental agreement under this 1 chapter other than a deposit which is exclusively in advance 2 payment of rent . 3 Sec. 35. Section 562B.13, subsection 2, Code 2023, is 4 amended to read as follows: 5 2. All rental deposits shall be held by the landlord for 6 the tenant, who is a party to the agreement, in a bank, credit 7 union, or savings and loan association which is insured by an 8 agency of the federal government. Rental deposits shall not be 9 commingled with the personal funds of the landlord. All rental 10 deposits may be held in a trust account, which may be a common 11 trust account and which may be an interest-bearing account. 12 Any interest earned on a rental deposit during the first five 13 years of a tenancy shall be the property of the landlord. 14 Sec. 36. Section 562B.13, Code 2023, is amended by adding 15 the following new subsection: 16 NEW SUBSECTION . 9. The court may, in any action on a rental 17 agreement, award reasonable attorney fees to the prevailing 18 party. 19 DIVISION XIII 20 NONJUDICIAL FORECLOSURE 21 Sec. 37. Section 654.18, Code 2022, is amended by adding the 22 following new subsection: 23 NEW SUBSECTION . 5. Actions under this section initiated 24 on or after July 1, 2023, shall not be allowed for property 25 consisting of a mobile home as defined in section 562B.7. 26 Sec. 38. Section 655A.9, Code 2023, is amended to read as 27 follows: 28 655A.9 Application of chapter. 29 1. This chapter does not apply to real estate used for 30 an agricultural purpose as defined in section 535.13 , or to 31 a one or two family dwelling which is, at the time of the 32 initiation of the foreclosure, occupied by a legal or equitable 33 titleholder. 34 2. Actions under this chapter initiated on or after July 1, 35 -12- LSB 1163XS (5) 90 cm/ns 12/ 20
S.F. 423 2023, shall not be allowed for property consisting of a mobile 1 home as defined in section 562B.7. 2 DIVISION XIV 3 RETALIATION 4 Sec. 39. Section 562B.32, subsection 1, paragraph a, Code 5 2023, is amended to read as follows: 6 a. The tenant has complained to a governmental agency 7 charged with responsibility for enforcement of a building or 8 housing code of a violation applicable to the manufactured 9 home community or mobile home park materially affecting health 10 and safety or other group relating to assisting tenants . For 11 this subsection paragraph to apply, a complaint filed with a 12 governmental body or group must be in good faith. 13 DIVISION XV 14 CAPITAL GAIN TAXES EXCLUSION 15 Sec. 40. Section 422.7, Code 2023, is amended by adding the 16 following new subsection: 17 NEW SUBSECTION . 44. a. Subtract, to the extent included, 18 the net capital gain from the sale or exchange of a mobile home 19 park. 20 b. To qualify under this subsection, the sale must be made 21 to any of the following: 22 (1) A tenants association or a mobile home park residents 23 association. 24 (2) A nonprofit organization under section 501(c)(3) of 25 the Internal Revenue Code that purchases a mobile home park on 26 behalf of a tenants association or mobile home park residents 27 association. 28 (3) A county housing authority. 29 (4) A municipal housing authority. 30 c. If the eligible business is a partnership, S corporation, 31 limited liability company, or estate or trust electing to have 32 the income taxed directly to the individual, an individual 33 may claim the tax credit allowed. The amount claimed by 34 the individual shall be based upon the pro rata share of 35 -13- LSB 1163XS (5) 90 cm/ns 13/ 20
S.F. 423 the individuals earnings of the partnership, S corporation, 1 limited liability company, or estate or trust. 2 d. For the purpose of this subsection, tenants 3 association or mobile home park residents association means a 4 group of six or more tenants who reside in a mobile home park, 5 have organized for the purpose of eventual purchase of the 6 mobile home park, have established bylaws of the association, 7 and have obtained the approval by vote of at least fifty-one 8 percent of the residents of the mobile home park to purchase 9 the mobile home park. 10 Sec. 41. Section 422.35, Code 2023, is amended by adding the 11 following new subsection: 12 NEW SUBSECTION . 15. a. Subtract, to the extent included, 13 the net capital gain from the sale or exchange of a mobile home 14 park. 15 b. To qualify under this subsection, the sale must be made 16 to any of the following: 17 (1) A tenants association or a mobile home park residents 18 association. 19 (2) A nonprofit organization under section 501(c)(3) of 20 the Internal Revenue Code that purchases a mobile home park on 21 behalf of a tenants association or mobile home park residents 22 association. 23 (3) A county housing authority. 24 (4) A municipal housing authority. 25 c. For the purpose of this subsection, tenants 26 association or mobile home park residents association means a 27 group of six or more tenants who reside in a mobile home park, 28 have organized for the purpose of eventual purchase of the 29 mobile home park, have established bylaws of the association, 30 and have obtained the approval by vote of at least fifty-one 31 percent of the residents of the mobile home park to purchase 32 the mobile home park. 33 EXPLANATION 34 The inclusion of this explanation does not constitute agreement with 35 -14- LSB 1163XS (5) 90 cm/ns 14/ 20
S.F. 423 the explanations substance by the members of the general assembly. 1 This bill relates to property law. 2 GROUNDS FOR TERMINATION OF TENANCY. The bill prohibits a 3 landlord from terminating a tenancy unless the tenant acts in 4 material noncompliance with the rental agreement, commits a 5 material violation of the manufactured home community or mobile 6 home park rules or regulations, or commits any other violation 7 of Code chapter 562B for which termination is a remedy; or 8 for a legitimate and material business reason, the impact of 9 which is not specific to one tenant; or due to a change in the 10 use of the land, and such change is grounds for termination or 11 nonrenewal under the rental agreement. 12 This division of the bill takes effect upon enactment and 13 applies to terminations of tenancies on or after that date. 14 CONSUMER FRAUD. The bill provides that a violation of 15 Code chapter 562B by a landlord or the landlords agent is 16 an unlawful practice under Code section 714.16, governing 17 consumer frauds. Several types of remedies are available 18 if a court finds that a person has committed an unlawful 19 practice, including injunctive relief, disgorgement of moneys 20 or property, and a civil penalty not to exceed $40,000 per 21 violation. 22 This division of the bill takes effect upon enactment and 23 applies to violations of Code chapter 562B occurring on or 24 after that date. 25 RENT INCREASES. The bill strikes changes to the definition 26 of rent made by the general assembly in 2022 and modifies 27 provisions governing an increase in the amount of rent paid 28 by a tenant. The bill prohibits a landlord from increasing 29 rent unless the tenant is notified in writing of the rent 30 increase at least 180 days before the effective date of the 31 rent increase. The bill further provides that the effective 32 date of any rent increase shall not be less than one year from 33 either the effective date of the most recent rent increase or 34 the beginning of the tenancy, whichever is later. 35 -15- LSB 1163XS (5) 90 cm/ns 15/ 20
S.F. 423 A landlord may increase the amount of rent due by any tenant 1 in an amount greater than the average annual increase of the 2 consumer price index for all urban consumers in the midwest 3 region for the most recently available preceding 36-month 4 period, if the landlord demonstrates a number of conditions 5 set forth in the bill. The bill also requires the written 6 notice of a rent increase provided to the tenant to include 7 the specific reasons and justifications for the increase. A 8 decrease in the number or quality of amenities, services, 9 or utilities provided under the rental agreement without a 10 corresponding and proportionate reduction in rent shall be 11 considered a rent increase for the purposes of Code chapter 12 562B. 13 This division of the bill takes effect upon enactment and 14 includes applicability provisions for certain requirements 15 related to rent increases. 16 LANDLORD REMEDIES AND PROCEDURES. Current law caps late 17 fees on rental agreements in which rent is greater than $700 18 per month at $20 per day and $100 per month. The bill allows 19 a rental agreement to provide for late fees not to exceed 2 20 percent of the rent per day and 10 percent of the rent per 21 month when rent exceeds $1,400 per month. The bill undoes 22 changes made to Code section 562B.10(7)(a) made by the general 23 assembly in 2022 relating occupancy by heirs and personal 24 representatives of a decedents estate. 25 MANUFACTURED HOUSING PROGRAM FUND. Under current law, the 26 manufactured housing program fund is used for the purpose of 27 providing funding to financial institutions or other lenders 28 to finance the purchase by an individual of a compliant 29 manufactured home. The bill strikes language providing that 30 the fund is designed exclusively for manufactured homes sited 31 on leased land. 32 TENANT COUNTERCLAIM FOR LANDLORD NONCOMPLIANCE. The bill 33 amends Code section 562B.25, relating to actions by a landlord 34 for noncompliance with a rental agreement by a tenant or 35 -16- LSB 1163XS (5) 90 cm/ns 16/ 20
S.F. 423 failure to pay rent, by establishing authority and procedures 1 similar to those under Code section 562A.24 (landlords 2 noncompliance as defense to action for possession or rent 3 uniform residential landlord and tenant Act). In a landlords 4 action for possession based upon nonpayment of rent or in an 5 action for rent where the tenant is in possession, the tenant 6 may counterclaim for an amount which the tenant may recover 7 under the rental agreement or Code chapter 562B, and pay into 8 court all or part of the rent. If the defense or counterclaim 9 by the tenant is without merit and is not raised in good 10 faith, the landlord may recover reasonable attorney fees. 11 Additionally, in an action for rent where the tenant is not in 12 possession, the tenant may counterclaim but is not required to 13 pay any rent into court. 14 This division of the bill takes effect upon enactment and 15 applies to actions for possession filed on or after that date. 16 UTILITY CHARGES. The bill provides that a landlord that 17 is responsible for payment of utilities being provided to the 18 tenant shall not charge to the tenant an amount in excess of 19 the actual cost of the utility and the failure of a tenant to 20 pay utility charges that exceed the actual cost of the utility 21 provided shall not be considered noncompliance with the rental 22 agreement. In addition to the actual cost of the utility, 23 the bill authorizes a landlord that is responsible for the 24 payment of one or more utilities to impose a monthly utility 25 administration fee to each tenant not to exceed $5 per month, 26 regardless of the number of utilities being provided or the 27 actual cost of the utilities being provided. The bill also 28 provides that a violation of the limitation on utility charges 29 is a violation of Code section 714H.3 (private right of action 30 for consumer frauds). 31 UNLAWFUL OUSTER. The bill amends Code section 562B.24 32 relating to a tenants remedies for a landlords unlawful 33 ouster or exclusion or diminution of services. The bill adds 34 reasonable attorney fees to the list of recoverable damages 35 -17- LSB 1163XS (5) 90 cm/ns 17/ 20
S.F. 423 and provides that if the rental agreement is terminated, the 1 landlord shall return all prepaid rent and security. 2 This division of the bill takes effect upon enactment and 3 applies to actions under Code section 562B.24 filed on or after 4 that date. 5 TENANT CORRECTING DEFICIENCIES. The bill provides that in 6 any action by a landlord for possession based upon nonpayment 7 of rent, proof by the tenant of certain actions set forth in 8 the bill are a defense to any action or claim for possession 9 by the landlord, and the amounts expended by the tenant in 10 correcting the deficiencies shall be deducted from the amount 11 claimed by the landlord as unpaid rent. 12 This division of the bill takes effect upon enactment and 13 applies to actions by a landlord for possession filed on or 14 after that date. 15 DENIAL OF RENTAL OR REFUSAL OF SALE. Code section 16 562B.19(3)(a) prohibits a landlord from denying rental unless 17 the tenant or prospective tenant cannot conform to manufactured 18 home community or park rules and regulations. The bill 19 requires any such decision to conform to recognized principles, 20 rules, and standards generally accepted by the professional 21 manufactured home community or park industry to ensure the 22 commercially reasonable safety and financial security of 23 comparable manufactured home communities or parks. The bill 24 also requires a landlord to deliver the decision in writing 25 to the tenant or prospective tenant as soon as commercially 26 feasible and to provide the basis for a denial in writing to 27 the tenant or prospective tenant at the time of the decision. 28 Code section 562B.19(3)(c) prohibits a landlord from denying 29 any resident of a manufactured home community or mobile home 30 park the right to sell that persons mobile home at a price 31 of the persons own choosing, but provides that the landlord 32 has the right to approve the purchaser as a tenant but such 33 permission may not be unreasonably withheld. The bill allows 34 such permission to be withheld only for a legitimate business 35 -18- LSB 1163XS (5) 90 cm/ns 18/ 20
S.F. 423 reason within the recognized principles, rules, and standards 1 accepted by the industry. If the landlord refuses to approve 2 the purchaser as a tenant, the landlord must provide a 3 legitimate business reason for the refusal in writing to the 4 resident. 5 RENTAL AGREEMENT TERMS. The bill adds to the list of 6 prohibited rental agreement provisions in Code section 7 562B.11 a provision requiring agreement to modify the physical 8 characteristics or equipment of the mobile home, manufactured 9 home, or modular home if such modification impairs the ability 10 of the tenant to move the home, unless otherwise required by 11 law or local ordinance. 12 The bill prohibits rental agreements under Code chapter 562B 13 from providing that the tenant or landlord does any of the 14 following: (1) authorizes imposition of fines, penalties, or 15 fees solely as a punishment or in amounts in excess of actual 16 damages or costs incurred, (2) authorizes a person to confess 17 judgment on a claim arising out of the rental agreement, and 18 (3) authorizes prohibitions, limitations, additional deposits, 19 or other restrictive policies that are not based on ordinary 20 wear and tear or that are not based on community safety 21 standards. 22 The bill provides that a tenant may recover up to three 23 months rent and attorney fees for a landlords knowing 24 and willful use of a rental agreement containing prohibited 25 provisions. The bill also removes the ability of the landlord 26 to recover from the tenant for use of a rental agreement 27 containing prohibited provisions. 28 RENTAL DEPOSITS. The bill modifies the definition of 29 rental deposit for purposes of Code chapter 562B, provides 30 that the landlord is only entitled to the interest earned on 31 the rental deposit for the first five years of the tenancy, and 32 establishes authority for a court, in any action on a rental 33 agreement, to award reasonable attorney fees to the prevailing 34 party. 35 -19- LSB 1163XS (5) 90 cm/ns 19/ 20
S.F. 423 NONJUDICIAL FORECLOSURE. The bill excludes mobile homes 1 from the applicability of nonjudicial foreclosure provisions. 2 RETALIATION. Code section 562B.32(1) generally provides 3 that a landlord shall not retaliate by increasing rent or 4 decreasing services or by bringing or threatening to bring an 5 action for possession or by failing to renew a rental agreement 6 after the exercise or assertion of several specified rights 7 and remedies, including complaining to a governmental agency 8 charged with responsibility for enforcement of a building or 9 housing code of a violation applicable to the manufactured 10 home community or mobile home park materially affecting health 11 and safety. The bill instead provides that a landlord cannot 12 retaliate against a tenant for filing a good-faith complaint 13 with a governmental agency or other group relating to assisting 14 tenants. 15 CAPITAL GAIN TAX EXCLUSION. The bill creates a capital gain 16 exclusion from sale of a mobile home park to certain entities 17 set forth in the bill. 18 -20- LSB 1163XS (5) 90 cm/ns 20/ 20