Text: SSB03126 Text: SSB03128 Text: SSB03100 - SSB03199 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. NEW SECTION. 558.70 CONTRACT DISCLOSURE 1 2 STATEMENT REQUIRED FOR CERTAIN RESIDENTIAL REAL ESTATE 1 3 INSTALLMENT SALES. 1 4 1. Prior to executing a residential real estate 1 5 installment sales contract, the contract seller shall deliver 1 6 a written contract disclosure statement to the contract 1 7 purchaser which shall clearly set forth the following 1 8 information: 1 9 a. If the real estate subject to the contract has been 1 10 separately assessed for property tax purposes, the current 1 11 assessed value of the real estate. 1 12 b. (1) A complete description of any property taxes due 1 13 and payable on the real estate and a complete description of 1 14 any special assessment on the real estate and the term of the 1 15 assessment. 1 16 (2) Information on whether any property taxes or special 1 17 assessments are delinquent and whether any tax sale 1 18 certificates have been issued for delinquent property taxes or 1 19 special assessment on the real estate. 1 20 c. A complete description of any mortgages or other liens 1 21 encumbering or secured by the real estate, including the 1 22 identity and address of the current owner of record with 1 23 respect to each such mortgage or lien, as well as a 1 24 description of the total outstanding balance and due date 1 25 under any such mortgage or lien. 1 26 d. A complete amortization schedule for all payments to be 1 27 made pursuant to the contract, which amortization schedule 1 28 shall include information on the portion of each payment to be 1 29 applied to principal and the portion to be applied to 1 30 interest. 1 31 e. If the contract requires a balloon payment, a complete 1 32 description of the balloon payment, including the date the 1 33 payment is due, the amount of the balloon payment, and other 1 34 terms related to the balloon payment. For purposes of this 1 35 paragraph, a "balloon payment" is any scheduled payment that 2 1 is more than twice as large as the average of earlier 2 2 scheduled payments. 2 3 f. The annual rate of interest to be charged under the 2 4 contract. 2 5 g. A statement that the purchaser has a right to seek 2 6 independent legal counsel concerning the contract and any 2 7 matters pertaining to the contract. 2 8 h. A statement that the purchaser has a right to receive a 2 9 true and complete copy of the contract after it has been 2 10 executed by all parties to the contract. 2 11 i. The mailing address of each party to the contract. 2 12 j. If the contract is subject to forfeiture, a statement 2 13 that if the purchaser does not comply with the terms of the 2 14 contract, the purchaser may lose all rights in the real estate 2 15 and all sums paid under the contract. 2 16 2. The contract disclosure statement shall be dated and 2 17 signed by each party to the contract. 2 18 3. Within five days after a residential real estate 2 19 installment sales contract has been executed by all parties to 2 20 the contract, the contract seller shall mail a true and 2 21 correct copy of the contract by regular first class mail to 2 22 the last known address of each contract purchaser. However, 2 23 this requirement is satisfied as to any purchaser who 2 24 acknowledges in writing that the purchaser has received a true 2 25 and correct copy of the fully executed contract. 2 26 4. This section applies to a contract seller who entered 2 27 into four or more residential real estate contracts in the 2 28 previous calendar year. For purposes of this subsection, two 2 29 or more entities sharing a common owner or manager are 2 30 considered a single contract seller. 2 31 5. A violation of this section affects title to property 2 32 only as provided in section 558.72. 2 33 6. For purposes of this section, "residential real estate" 2 34 means a residential dwelling containing no more than two 2 35 single-family dwelling units, which is not located on a tract 3 1 of land used for agricultural purposes as defined in section 3 2 535.13. 3 3 7. The attorney general may adopt rules necessary to 3 4 administer this section. 3 5 8. This section and any rules adopted to administer this 3 6 section shall not limit or abridge any duty, requirement, 3 7 obligation, or liability for disclosure created by any other 3 8 provision of law, or under a contract between the parties. 3 9 Sec. 2. NEW SECTION. 558.71 PENALTY. 3 10 A contract seller who intentionally provides inaccurate 3 11 information with regard to any matter required to be disclosed 3 12 under section 558.70, subsection 1, or who fails to exercise 3 13 reasonable care in determining the accuracy of such 3 14 information is guilty of a fraudulent practice in the fifth 3 15 degree regardless of the value of the real estate subject to 3 16 the contract. 3 17 Sec. 3. NEW SECTION. 558.72 CIVIL LIABILITIES. 3 18 1. A contract purchaser injured by a violation of section 3 19 558.70 may within one year of the execution of the contract 3 20 bring an equitable action in the district court of record 3 21 where the real estate is located to obtain relief as follows: 3 22 a. The court may rescind a contract that remains in 3 23 existence at the time the action is commenced, and award 3 24 restitution to the contract purchaser determined in accordance 3 25 with the standards for damages specified in paragraph "b". 3 26 b. If the contract has been terminated by any means prior 3 27 to commencement of the action, the contract purchaser may 3 28 recover a money judgment against the original contract seller 3 29 for a sum equal to all amounts the contract purchaser paid to 3 30 the contract seller, plus the reasonable value of any 3 31 improvements to the real estate made by the contract 3 32 purchaser, plus any other proximately caused or incidental 3 33 damages, less the fair rental value of the real estate for the 3 34 period of time the contract purchaser was in possession of the 3 35 real estate. 4 1 2. A contract purchaser alleging a violation of section 4 2 558.70 bears the burden of establishing such violation by a 4 3 preponderance of the evidence. 4 4 3. An order of recision or a money judgment awarded shall 4 5 not affect any rights or responsibilities arising from any 4 6 conveyance or encumbrance made by either the contract 4 7 purchaser or the contract seller prior to the filing of a lis 4 8 pendens in the action in which such relief is sought, unless 4 9 it is established by clear and convincing evidence that the 4 10 recipient of such conveyance or encumbrance had prior 4 11 knowledge that the contract was executed in violation of the 4 12 requirements of section 558.70. 4 13 4. In an action in which a contract purchaser obtains 4 14 relief under this section, the court shall also award to such 4 15 contract purchaser reasonable attorney fees incurred in 4 16 bringing the action. 4 17 Sec. 4. Section 558.46, Code 2001, is amended by adding 4 18 the following new subsection: 4 19 NEW SUBSECTION. 7. If a contract seller is subject to the 4 20 requirements of section 558.70, the contract must be recorded 4 21 within forty-five days rather than one hundred eighty days and 4 22 the recording requirement is only satisfied by recording the 4 23 real estate contract rather than a memorandum of the contract. 4 24 Sec. 5. Section 558A.4, Code 2001, is amended by adding 4 25 the following new subsection: 4 26 NEW SUBSECTION. 3. A transferor subject to the 4 27 requirements of section 558.70 shall provide a report or 4 28 opinion under subsection 2, if the transferor does not have 4 29 sufficient knowledge to provide full and complete information 4 30 about any matter or circumstance required to be disclosed by 4 31 this chapter. 4 32 Sec. 6. APPLICABILITY DATE. This Act applies to 4 33 residential real estate installment sales contracts entered 4 34 into on or after the effective date of this Act. 4 35 EXPLANATION 5 1 This bill requires that a person selling real estate 5 2 pursuant to an installment sales contract prepare and deliver 5 3 to the contract purchaser a written contract disclosure 5 4 statement. The contract disclosure statement is required if 5 5 the contract seller entered into more than four real estate 5 6 installment sales contracts in the previous calendar year. 5 7 The bill requires that the contract disclosure statement 5 8 contain specified information, including the property tax 5 9 assessment on the real estate, information on delinquent 5 10 property taxes or special assessments, information on 5 11 mortgages or liens on the real estate, an amortization 5 12 schedule, balloon payment information, the annual rate of 5 13 interest to be charged under the contract, statements as to 5 14 the purchaser's rights, mailing addresses of the parties to 5 15 the contract, and information on forfeiture of the contract. 5 16 The bill defines residential real estate as a residential 5 17 dwelling containing no more than two single-family dwelling 5 18 units which is not located on agricultural land. 5 19 The bill provides that the attorney general may adopt rules 5 20 pertaining to the contract disclosure statement requirement. 5 21 The bill provides that a contract seller who intentionally 5 22 provides inaccurate information on the disclosure statement or 5 23 who fails to use reasonable care in determining the accuracy 5 24 of information required on the disclosure statement is guilty 5 25 of a fraudulent practice in the fifth degree regardless of the 5 26 value of the real estate. A fraudulent practice in the fifth 5 27 degree is a simple misdemeanor. 5 28 The bill provides that the civil remedies for violation of 5 29 the contract disclosure requirements is recision of the 5 30 installment sales contract or recovery of a money judgment 5 31 against the contract seller. The contract purchaser has the 5 32 burden of proof by a preponderance of the evidence. If a 5 33 contract purchaser prevails in an action for recision or for a 5 34 money judgment, the court may also award to the contract 5 35 purchaser reasonable attorney fees incurred in bringing the 6 1 action. 6 2 The bill requires a transferor who is required to provide a 6 3 contract disclosure statement to provide a written report or 6 4 opinion on any information required to be disclosed on a 6 5 property disclosure statement under Code chapter 558A if the 6 6 transferor does not have sufficient knowledge to provide the 6 7 full and complete information. 6 8 The bill applies to residential real estate installment 6 9 sales contracts entered into on or after the effective date of 6 10 the bill. 6 11 LSB 6117SC 79 6 12 sc/pj/5
Text: SSB03126 Text: SSB03128 Text: SSB03100 - SSB03199 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
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