HSB 512 (LSB 5317HC (4) 83)

HOUSE FILE _____

BY  (PROPOSED COMMITTEE ON REBUILD IOWA AND DISASTER RECOVERY BILL BY CHAIRPERSON SCHUELLER)

A BILL FOR

An Act relating to disclosures concerning the availability of flood insurance and sewer back-up insurance coverage and flood damage to property being transferred.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  515.138A  Disclosure of availability of flood and sewer back-up insurance coverage.

   When an insurance company or association receives an application for the issue or renewal of a policy of homeowner’s or renter’s insurance coverage, an insurance producer licensed under chapter 522B who is an agent of the insurance company or association shall discuss with the applicant whether there is a need for and the availability of flood insurance and optional sewer back-up coverage. At that time the insurance producer shall obtain a completed disclosure form signed and dated by the applicant which states that the need for and availability of flood insurance and optional sewer back-up coverage was discussed with the applicant and the applicant either accepted or declined to purchase such coverage.
    Sec. 2.  Section 558.70, subsection 1, Code 2009, is amended to read as follows:
   1.  Prior to executing a residential real estate installment sales contract, the contract seller shall deliver a written contract disclosure statement to the contract purchaser which shall clearly set forth the following information:
   a.  If the real estate subject to the contract has been separately assessed for property tax purposes, the current assessed value of the real estate.
   b.  (1)  A complete description of any property taxes due and payable on the real estate and a complete description of any special assessment on the real estate and the term of the assessment.
   (2)  Information on whether any property taxes or special assessments are delinquent and whether any tax sale certificates have been issued for delinquent property taxes or special assessments on the real estate.
   c.  Information on the flood plain designation that has been assigned to the property and, to the best of the seller’s knowledge, whether the property has ever been inundated by a flood or payment has been made pursuant to flood insurance coverage or federal assistance has been received on account of flood damage to the property.
   c.  d.  A complete description of any mortgages or other liens encumbering or secured by the real estate, including the identity and address of the current owner of record with respect to each such mortgage or lien, as well as a description of the total outstanding balance and due date under any such mortgage or lien.
   d.  e.  A complete amortization schedule for all payments to be made pursuant to the contract, which amortization schedule shall include information on the portion of each payment to be applied to principal and the portion to be applied to interest.
   e.  f.  If the contract requires a balloon payment, a complete description of the balloon payment, including the date the payment is due, the amount of the balloon payment, and other terms related to the balloon payment. For purposes of this paragraph, a “balloon payment” is any scheduled payment that is more than twice as large as the average of earlier scheduled payments.
   f.  g.  The annual rate of interest to be charged under the contract.
   g.  h.  A statement that the purchaser has a right to seek independent legal counsel concerning the contract and any matters pertaining to the contract.
   h.  i.  A statement that the purchaser has a right to receive a true and complete copy of the contract after it has been executed by all parties to the contract.
   i.  j.  The mailing address of each party to the contract.
   j.  k.  If the contract is subject to forfeiture, a statement that if the purchaser does not comply with the terms of the contract, the purchaser may lose all rights in the real estate and all sums paid under the contract.
    Sec. 3.  Section 558A.4, Code 2009, is amended by adding the following new subsection:
   NEW SUBSECTION.  1A.  The disclosure statement shall include questions requiring the seller to disclose the flood plain designation that has been assigned to the property and, to the best of the seller’s knowledge, whether the property has ever been inundated by a flood or payment has been made pursuant to flood insurance coverage or federal assistance has been received on account of flood damage to the property.
EXPLANATION
   This bill relates to disclosures concerning the availability of flood insurance and optional sewer back-up insurance coverage and flood damage to property being transferred.
   New Code section 515.138A requires that when an insurance company or association receives an application for the issue or renewal of a policy of homeowner’s or renter’s insurance, a licensed insurance producer must discuss with the applicant whether there is a need for and the availability of flood insurance and optional sewer back-up coverage. At that time the insurance producer must also obtain a completed disclosure form signed and dated by the applicant which states that this information was discussed and the applicant either accepted or declined to purchase the coverage.
   New Code sections 558.70(1)(c) and 558A.4(1A) require that the written property condition disclosure statements required for transfers of real estate subject to Code chapters 558 and 558A must include questions requiring the seller to disclose the flood plain designation that has been assigned to the property and, to the best of the seller’s knowledge, whether the property has ever been inundated by a flood or payment has been made pursuant to flood insurance coverage or federal assistance has been received on account of flood damage to the property.