Iowa Senate Bill SSB1156

Iowa 2023-2024 Regular Session

• Introduced: 2/14/23
• Refer: 2/14/23

Caption

A bill for an act relating to unfair residential real estate service agreements, providing penalties, and making penalties applicable.(See SF 417.)

Impact

If enacted, the bill would have a significant impact on how service agreements related to residential properties are structured and enforced. Any agreement deemed unfair under the bill would be rendered unenforceable, meaning homeowners would have a legal basis to challenge these agreements. Furthermore, the person who enters into such agreements could face legal repercussions, including civil penalties that could amount to $40,000 per violation. The bill also creates provisions for bringing actions against recorded unfair agreements, thereby providing additional layers of protection for consumers.

Summary

Senate Study Bill 1156 aims to address unfair residential real estate service agreements by providing clear definitions and establishing penalties for violations. The bill categorizes service agreements as 'unfair' if they contain specific characteristics, such as not being required to be fully performed within one year or allowing assignment without the homeowner's notice or consent. These provisions are designed to protect consumers from potentially exploitative contracts in the residential real estate market.

Contention

Notably, SSB1156 does not apply to certain types of agreements, such as home warranties or maintenance contracts executed by homeowners associations, which could be points of contention during discussions about the bill. Critics might argue that excluding these types of agreements could leave gaps in consumer protections or create opportunities for continued unfair practices in related areas. As this bill progresses through the legislative process, stakeholders will likely debate the breadth and effectiveness of its provisions, as well as its potential economic impact on service providers in the real estate sector.