As a real estate investor, you gather a lot of knowledge before you invest, and you continue to learn as you grow your investment portfolio and rent out your properties. How well do you know the laws that pertain to your tenants, your property, and your responsibilities as a rental property owner?
Legal mistakes can be expensive, and when you’re renting out a property in Council Bluffs, it’s important that you understand the laws governing the landlord and tenant relationship. The Iowa landlord and tenant laws aren’t particularly strict; they aren’t the rent control and eviction hurdles that other states face. However, making a simple mistake in any of your processes could come with a penalty that you’d rather not deal with. Educate yourself on the laws and regulations, or work with a Council Bluffs property management company that can keep you compliant.
Here are some of the highlights you need to be aware of when it comes to local, state, and federal laws:
Iowa Lease Requirements
Iowa rental agreements should reflect all of the laws and requirements found in the Iowa Uniform Residential Landlord-Tenant Law (Chapter 562A-12).
According to this law, every rental agreement must include specific information that makes your lease agreement both legally compliant and legally enforceable. Create a lease agreement with your tenant that reflects the following:
- Description of the rental property.
- Contact information of the tenant, landlord, and property manager if applicable.
- Rental amount, due date, grace period, and late fees.
- Security deposit information.
- Instructions on who is responsible for repairs and maintenance as well as landscaping.
Don’t pull any generic lease template from the internet when you’re leasing your property. Get an Iowa-specific lease agreement from a Council Bluffs property management company or a local rental association.
Fair Housing and Discrimination Laws
Most of the federal laws that affect renting out your property are related to fair housing, discrimination, and credit reporting rules. The main law you need to concern yourself with is the Fair Housing Act. This law sets up protections for seven tenant classes. You aren’t allowed to discriminate against anyone based on race, color, religion, national origin, sex, familial status, or disability.
State fair housing laws are even stricter than federal laws. The Iowa Civil Rights Act (Iowa Code 216) prohibits discrimination in rental housing based on race, color, sex, sexual orientation, gender identity, religion, national origin, mental disability, physical disability, and familial status. While it likely seems you would never discriminate for these reasons, you might use certain terminology in your marketing that leads people to believe you’re looking for a specific “type” of tenant. You also need to demonstrate that everyone is treated the same when they’re applying for or leasing your property.
The Americans with Disabilities Act (ADA) goes even further than fair housing laws in protecting the rights of tenants with disabilities. You may need to provide accommodations to tenants or applicants who have physical, intellectual, or emotional disabilities.
The best way to ensure you’re following all fair housing laws is to treat everyone consistently and to develop written policies. You should have standard rental criteria, checklists, and processes in place. Fair housing laws now include service animals and emotional support animals. You’ll need to know how those differ from pets.
The Fair Credit Reporting Act is also specific about what you can and cannot do with the personal and financial information you collect not only from your current tenants but from those who applied for your home and were denied.
Iowa Security Deposit Laws
You’ll want to collect a security deposit to protect yourself against the risk of unpaid rent, lease breaks, or property damage.
There are security deposit laws in the state that restrict what you can collect, however. Your security deposit cannot be higher than the equivalent of two months’ rent. Additional requirements around security deposits in Iowa are:
- You must return the security deposit within 30 days of the tenant leaving the property. Send it to the tenant’s forwarding address, and if they did not leave a forwarding address, send it to their last known address (which is likely your rental property).
- If you withhold some or all of the deposit, you must provide an itemized statement of every repair that you will need to make, explaining what you’ve withheld and why.
There are specific reasons for which you can withhold part of a tenant’s security deposit:
- Unpaid or overdue rent.
- Unpaid or overdue utility payments.
- Property damage exceeds normal wear and tear (which is your responsibility as a landlord).
You’re not required to pay interest on the security deposit.
Terminating a Lease in Council Bluffs or Evicting a Tenant
There is no obligation in Council Bluffs for you to keep a tenant in place after the lease has ended. However, you do need to pay attention to the legal notice requirements. If you’re renting a property out for a one-year lease term, you must provide 30 days of notice before you can terminate the lease agreement.
If you want to evict a tenant, you may do so for nonpayment of rent, lease violations, or criminal activity. When you’re evicting due to nonpayment of rent or criminal activity, you must serve a Three Day Notice to Pay Rent or Quit. For a breach of the lease agreement, your notice period has to be seven days.
This is simply a brief overview of the laws you need to know as a rental property owner in Council Bluffs, Iowa. You also need to be aware of habitability issues, the tenant’s right to privacy and quiet enjoyment, and state, local, and federal requirements.
It can feel overwhelming. As professional property managers, we make staying up to date on laws and legal requirements part of our ongoing service to you. We keep you compliant and protect you from expensive legal mistakes.
If you’d like to hear more about what we know, please contact us at Kouri Management. We provide expert leasing, management, and maintenance services in Council Bluffs and Omaha, Nebraska.
