562A.12 Rental deposits. 1. A landlord shall not demand or receive as a security deposit an amount or value in excess of two months’ rent. 2. All rental deposits shall be held by the landlord for the tenant, who is a party to the agreement, in a bank or savings and loan association or credit union which is insured by anagency of the federal government. Rental deposits shall not be commingled with the personalfunds of the landlord. Notwithstanding the provisions of chapter 543B, all rental depositsmay be held in a trust account, which may be a common trust account and which may be aninterest-bearing account. Any interest earned on a rental deposit during the first five yearsof a tenancy shall be the property of the landlord. 3. a. A landlord shall, within thirty days from the date of termination of the tenancy and receipt of the tenant’s mailing address or delivery instructions, return the rental deposit to thetenant or furnish to the tenant a written statement showing the specific reason for withholdingof the rental deposit or any portion thereof. If the rental deposit or any portion of the rentaldeposit is withheld for the restoration of the dwelling unit, the statement shall reason for withholdingof the rental deposit or any portion thereof. If the rental deposit or any portion of the rentaldeposit is withheld for the restoration of the dwelling unit, the statement shall specify thenature of the damages. The landlord may withhold from the rental deposit only such amountsas are reasonably necessary for the following reasons: (1) To remedy a tenant’s default in the payment of rent or of other funds due to the landlord pursuant to the rental agreement. (2) To restore the dwelling unit to its condition at the commencement of the tenancy, ordinary wear and tear excepted. (3) To recover expenses incurred in acquiring possession of the premises from a tenant who does not act in good faith in failing to surrender and vacate the premises uponnoncompliance with the rental agreement and notification of such noncompliance pursuantto this chapter. b. In an action concerning the rental deposit, the burden of proving, by a preponderance of the evidence, the reason for withholding all or any portion of the rental deposit shall be onthe landlord. 4. A landlord who fails to provide a written statement within thirty days of termination of the tenancy and receipt of the ithholding all or any portion of the rental deposit shall be onthe landlord. 4. A landlord who fails to provide a written statement within thirty days of termination of the tenancy and receipt of the tenant’s mailing address or delivery instructions shall forfeitall rights to withhold any portion of the rental deposit. If no mailing address or instructionsare provided to the landlord within one year from the termination of the tenancy the rentaldeposit shall revert to the landlord and the tenant will be deemed to have forfeited all rightsto the rental deposit. 5. a. Upon termination of a landlord’s interest in the dwelling unit, the landlord or an agent of the landlord shall, within a reasonable time, transfer the rental deposit, or anyremainder after any lawful deductions to the landlord’s successor in interest and notify thetenant of the transfer and of the transferee’s name and address or return the deposit, or anyremainder after any lawful deductions to the tenant. b. Upon the termination of the landlord’s interest in the dwelling unit and compliance with the provisions of this subsection, the landlord shall be relieved of any further liabilitywith respect to the rental he termination of the landlord’s interest in the dwelling unit and compliance with the provisions of this subsection, the landlord shall be relieved of any further liabilitywith respect to the rental deposit. 6. Upon termination of the landlord’s interest in the dwelling unit, the landlord’s successor in interest shall have all the rights and obligations of the landlord with respectto the rental deposits, except that if the tenant does not object to the stated amountwithin twenty days after written notice to the tenant of the amount of rental deposit beingtransferred or assumed, the obligations of the landlord’s successor to return the depositshall be limited to the amount contained in the notice. The notice shall contain a stampedenvelope addressed to the landlord’s successor. 7. The bad-faith retention of a deposit by a landlord, or any portion of the rental deposit, in violation of this section shall subject the landlord to punitive damages not to exceed twicethe monthly rental payment in addition to actual damages. Sat Dec 23 11:06:27 2023 Iowa Code 2024, Section 562A.12 (22, 0) §562A.12, UNIFORM RESIDENTIAL LANDLORD AND TENANT LAW 2 8. ot to exceed twicethe monthly rental payment in addition to actual damages. Sat Dec 23 11:06:27 2023 Iowa Code 2024, Section 562A.12 (22, 0) §562A.12, UNIFORM RESIDENTIAL LANDLORD AND TENANT LAW 2 8. The court may, in any action on a rental agreement, award reasonable attorney fees to the prevailing party. [C75, 77, §562.9 – 562.14; C79, 81, §562A.12]93 Acts, ch 154, §13; 2010 Acts, ch 1017, §2, 11; 2013 Acts, ch 30, §261; 2013 Acts, ch 97, §4; 2014 Acts, ch 1026, §123 Referred to in §562A.21, 562A.25 Sat Dec 23 11:06:27 2023 Iowa Code 2024, Section 562A.12 (22, 0)
Iowa Legal Code