Senate Study Bill 3089 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON REBUILD IOWA BILL BY CHAIRPERSON HOGG) A BILL FOR An Act relating to disclosures concerning the availability of 1 flood insurance and sewer back-up insurance coverage and 2 flood damage to property being transferred. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5317SC (2) 83 av/sc

S.F. _____ Section 1. NEW SECTION . 515.138A Disclosure of availability 1 of flood and sewer back-up insurance coverage. 2 When an insurance company or association receives an 3 application for the issue or renewal of a policy of homeowner’s 4 or renter’s insurance coverage, an insurance producer licensed 5 under chapter 522B who is an agent of the insurance company or 6 association shall discuss with the applicant whether there is a 7 need for and the availability of flood insurance and optional 8 sewer back-up coverage. At that time the insurance producer 9 shall obtain a completed disclosure form signed and dated by 10 the applicant which states that the need for and availability 11 of flood insurance and optional sewer back-up coverage was 12 discussed with the applicant and the applicant either accepted 13 or declined to purchase such coverage. 14 Sec. 2. Section 558.70, subsection 1, Code 2009, is amended 15 to read as follows: 16 1. Prior to executing a residential real estate installment 17 sales contract, the contract seller shall deliver a written 18 contract disclosure statement to the contract purchaser which 19 shall clearly set forth the following information: 20 a. If the real estate subject to the contract has been 21 separately assessed for property tax purposes, the current 22 assessed value of the real estate. 23 b. (1) A complete description of any property taxes due 24 and payable on the real estate and a complete description of 25 any special assessment on the real estate and the term of the 26 assessment. 27 (2) Information on whether any property taxes or 28 special assessments are delinquent and whether any tax sale 29 certificates have been issued for delinquent property taxes or 30 special assessments on the real estate. 31 c. Information on the flood plain designation that has 32 been assigned to the property and, to the best of the seller’s 33 knowledge, whether the property has ever been inundated by a 34 flood or payment has been made pursuant to flood insurance 35 -1- LSB 5317SC (2) 83 av/sc 1/ 3

S.F. _____ coverage or federal assistance has been received on account of 1 flood damage to the property. 2 c. d. A complete description of any mortgages or other 3 liens encumbering or secured by the real estate, including 4 the identity and address of the current owner of record with 5 respect to each such mortgage or lien, as well as a description 6 of the total outstanding balance and due date under any such 7 mortgage or lien. 8 d. e. A complete amortization schedule for all payments to 9 be made pursuant to the contract, which amortization schedule 10 shall include information on the portion of each payment to be 11 applied to principal and the portion to be applied to interest. 12 e. f. If the contract requires a balloon payment, a 13 complete description of the balloon payment, including the date 14 the payment is due, the amount of the balloon payment, and 15 other terms related to the balloon payment. For purposes of 16 this paragraph, a “balloon payment” is any scheduled payment 17 that is more than twice as large as the average of earlier 18 scheduled payments. 19 f. g. The annual rate of interest to be charged under the 20 contract. 21 g. h. A statement that the purchaser has a right to seek 22 independent legal counsel concerning the contract and any 23 matters pertaining to the contract. 24 h. i. A statement that the purchaser has a right to receive 25 a true and complete copy of the contract after it has been 26 executed by all parties to the contract. 27 i. j. The mailing address of each party to the contract. 28 j. k. If the contract is subject to forfeiture, a statement 29 that if the purchaser does not comply with the terms of the 30 contract, the purchaser may lose all rights in the real estate 31 and all sums paid under the contract. 32 Sec. 3. Section 558A.4, Code 2009, is amended by adding the 33 following new subsection: 34 NEW SUBSECTION . 1A. The disclosure statement shall include 35 -2- LSB 5317SC (2) 83 av/sc 2/ 3

S.F. _____ questions requiring the seller to disclose the flood plain 1 designation that has been assigned to the property and, to the 2 best of the seller’s knowledge, whether the property has ever 3 been inundated by a flood or payment has been made pursuant 4 to flood insurance coverage or federal assistance has been 5 received on account of flood damage to the property. 6 EXPLANATION 7 This bill relates to disclosures concerning the availability 8 of flood insurance and optional sewer back-up insurance 9 coverage and flood damage to property being transferred. 10 New Code section 515.138A requires that when an insurance 11 company or association receives an application for the issue 12 or renewal of a policy of homeowner’s or renter’s insurance, 13 a licensed insurance producer must discuss with the applicant 14 whether there is a need for and the availability of flood 15 insurance and optional sewer back-up coverage. At that time 16 the insurance producer must also obtain a completed disclosure 17 form signed and dated by the applicant which states that this 18 information was discussed and the applicant either accepted or 19 declined to purchase the coverage. 20 New Code sections 558.70(1)(c) and 558A.4(1A) require that 21 the written property condition disclosure statements required 22 for transfers of real estate subject to Code chapters 558 and 23 558A must include questions requiring the seller to disclose 24 the flood plain designation that has been assigned to the 25 property and, to the best of the seller’s knowledge, whether 26 the property has ever been inundated by a flood or payment 27 has been made pursuant to flood insurance coverage or federal 28 assistance has been received on account of flood damage to the 29 property. 30 -3- LSB 5317SC (2) 83 av/sc 3/ 3