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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