HF 2351 (LSB 6108YH (2) 88)

HOUSE FILE 2351

BY  LOHSE, KAUFMANN, MITCHELL, BOSSMAN, HOLT, LUNDGREN, LANDON, GERHOLD, JUDGE, MATSON, JAMES, BRECKENRIDGE, HALL, FORBES, NIELSEN, and R. SMITH

A BILL FOR

An Act relating to property law by modifying provisions relating to rental properties, manufactured home communities, mobile home parks, and manufactured mobile home communities, modifying provisions governing actions relating to such properties, making penalties applicable, and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
GROUNDS FOR TERMINATION OF TENANCY

    Section 1.  Section 562B.10, Code 2020, is amended by adding the following new subsection:
   NEW SUBSECTION.  4A.  A landlord may only terminate a tenancy if the tenant engages in any of the following or for any of the following reasons:
   a.  A material noncompliance with the rental agreement.
   b.  A material violation of the manufactured home community or mobile home park rules or regulations.
   c.  Any other violation of this chapter for which termination is a remedy.
   d.  A legitimate and material business reason the impact of which is not specific to one tenant.
   e.  A change in the use of the land if change in the use of the land is included in the rental agreement as grounds for termination or nonrenewal.
    Sec. 2.  EFFECTIVE DATE.  This division of this Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 3.  APPLICABILITY.  This division of this Act applies to terminations of tenancies on or after the effective date of this division of this Act.
DIVISION II
RETALIATION

    Sec. 4.  Section 562B.32, subsection 1, paragraph d, Code 2020, is amended to read as follows:
   d.  For exercising any of the rights and remedies pursuant to this chapter or chapter 216.
    Sec. 5.  Section 562B.32, subsection 2, Code 2020, is amended to read as follows:
   2.  If the landlord acts in violation of subsection 1 of this section, the tenant is entitled to the remedies provided in section 562B.24 and has a defense in an action for possession. In an action by or against the tenant, evidence of a complaint within six months one year prior to the alleged act of retaliation creates a presumption that the landlord’s conduct was in retaliation. The presumption does not arise if the tenant made the complaint after notice of termination of the rental agreement. For the purpose of this subsection, “presumption” means that the trier of fact must find the existence of the fact presumed unless and until evidence is introduced which would support a finding of its nonexistence.
    Sec. 6.  EFFECTIVE DATE.  This division of this Act, being deemed of immediate importance, takes effect upon enactment.
DIVISION III
CONSUMER FRAUD

    Sec. 7.  Section 562B.4, Code 2020, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.  A violation of this chapter by a landlord, or an agent of the landlord, is an unlawful practice under section 714.16.
    Sec. 8.  Section 714.16, subsection 2, Code 2020, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  q.  It is an unlawful practice for a landlord or the landlord’s agent to violate any of the provisions of chapter 562B.
    Sec. 9.  EFFECTIVE DATE.  This division of this Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 10.  APPLICABILITY.  This division of this Act applies to violations of chapter 562B occurring on or after the effective date of this division of this Act.
DIVISION IV
RENT INCREASES

    Sec. 11.  Section 562B.14, subsection 7, Code 2020, is amended by striking the subsection and inserting in lieu thereof the following:
   7.  a.  A landlord shall not increase the amount of rent due by any tenant in a manufactured home community or mobile home park unless the tenant is notified, in writing, of the rent increase at least one hundred eighty days before the effective date of the rent increase. The effective date of any increase in the amount of rent shall not be less than one year after either the effective date of the most recent rent increase or the beginning of the tenancy, whichever is later.
   b.  (1)  Subject to paragraph “a”, a landlord may increase the amount of rent due by any tenant in an amount greater than the average annual increase of the consumer price index for all urban consumers in the midwest region for the most recently available preceding thirty-six-month period, if the landlord demonstrates the increase is justified for all of the following conditions:
   (a)  The landlord, during the preceding twelve-month period, has not been found in violation of any provision of this chapter that threatens the health or safety of the tenants of or visitors to the manufactured home community or mobile home park that persists for more than fifteen days, beginning on the day the landlord received notice of such violation.
   (b)  The proposed rent increase is directly related to operating, maintaining, or improving the manufactured home community or mobile home park, and is justified by one or more of the following factors:
   (i)  The completion and cost of any capital improvements or repair work in the manufactured home community or mobile home park, as distinguished from ordinary repair, replacement, and maintenance.
   (ii)  An increase in property taxes due on the manufactured home community or mobile home park.
   (iii)  If the landlord is responsible for payment of one or more utilities, an increase in utility expenses within the manufactured home community or mobile home park.
   (iv)  An increase in insurance costs and financing associated with the manufactured home community or mobile home park.
   (v)  An increase in reasonable operating and maintenance expenses relating to the manufactured home community or mobile home park.
   (vi)  An increase in market rent. For purposes of this section, “market rent” means that rent which would result from market forces absent an unequal bargaining position between the landlord and tenants. In determining market rent, relevant considerations include rents charged to recent new tenants of the manufactured home community or mobile home park or rents charged by comparable manufactured home communities or mobile home parks. To be comparable, a manufactured home community or mobile home park must be within the competitive area and must offer similar facilities, services, amenities, and management.
   (c)  The department of revenue shall monitor the consumer price index for all urban consumers in the midwest region and report the relevant data to the consumer protection division of the office of the attorney general for periodic publication. 
   c.  The written notice of a rent increase provided to the tenant shall include the specific reasons for the increase including the justification under paragraph “b”, if applicable.
   d.  A decrease in the number or quality of amenities, services, or utilities provided under the rental agreement without a corresponding and proportionate reduction in rent shall be considered a rent increase for the purposes of this chapter.
    Sec. 12.  EFFECTIVE DATE.  This division of this Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 13.  APPLICABILITY.  The following applies to rent increases under chapter 562B occurring on or after the effective date of this division of this Act:
   Section 562B.14, subsection 7, paragraphs “a” and “d”, as enacted in this division of this Act.
    Sec. 14.  APPLICABILITY.  The following applies to rent increases under chapter 562B occurring on or after July 1, 2020:
   Section 562B.14, subsection 7, paragraphs “b” and “c”, as enacted in this division of this Act.
DIVISION V
LANDLORD REMEDIES AND PROCEDURES

    Sec. 15.  Section 555B.3, Code 2020, is amended to read as follows:
   555B.3  Action for abandonment —— jurisdiction.
   A real property owner not requesting notification by the sheriff as provided in section 555B.2 may bring an action alleging abandonment in the court within the county where the real property is located provided that there is no lien on the mobile home or personal property other than a tax lien pursuant to chapter 435. The action shall be tried as an equitable action. Unless commenced as a small claim, the petition shall be presented to a district judge. Upon receipt of the petition, either the court or the clerk of the district court shall set a date for a hearing not later than fourteen days from the date of the receipt of the petition, except when there is a lien on the mobile home or personal property, other than a tax lien, the court or the clerk of the district court shall set a date for a hearing no sooner than twenty-five days from the date of the receipt of the petition so as to allow for service on the lienholder.
    Sec. 16.  Section 555B.4, Code 2020, is amended by adding the following new subsection:
   NEW SUBSECTION.  4.  If a lien, other than a tax lien, exists on the mobile home or personal property at the time an action for abandonment is initiated, personal service pursuant to rule of civil procedure 1.305 shall be made upon the lienholder no less than twenty days before the hearing. The notice to the lienholder shall describe the mobile home and shall state the docket, case number, date, time at which the hearing is scheduled, and the lienholder’s right to assert a claim to the mobile home at the hearing. The notice shall also state that failure to assert a claim to the mobile home within the judicial proceedings is deemed a waiver of all right, title, claim, and interest in the mobile home and is deemed consent to the sale or disposal of the mobile home. If personal service upon the lienholder cannot be completed in time to give the lienholder the minimum notice required by this section, the court may set a new hearing date.
    Sec. 17.  Section 555B.8, subsections 2 and 3, Code 2020, are amended to read as follows:
   2.  If Except as otherwise ordered by the court, if the mobile home owner or other claimant asserts a claim to the property, the judgment shall be satisfied before the mobile home owner or other claimant may take possession of the mobile home or personal property.
   3.  If no claim is asserted to the mobile home or personal property or if the judgment is not satisfied at the time of entry, an order shall be entered allowing the real property owner to sell or otherwise dispose of the mobile home and personal property pursuant to section 555B.9. If Except as otherwise ordered by the court, if a claimant satisfies the judgment at the time of entry, the court shall enter an order permitting and directing the claimant to remove the mobile home or personal property from its location within a reasonable time to be fixed by the court. The court shall also determine the amount of further rent or storage charges to be paid by the claimant to the real property owner at the time of removal.
    Sec. 18.  Section 555B.9, subsections 1, 2, 3, and 4, Code 2020, are amended to read as follows:
   1.  Pursuant to an order for disposal under section 555B.8, subsection 3, the real property owner shall dispose of the mobile home and personal property by public or private sale in a commercially reasonable manner. If the personal property, lienholder, owner, or other claimant has asserted a claim to the mobile home or personal property within the judicial proceedings, that person shall be notified of the sale by restricted certified mail not less than five days before the sale. The notice is deemed given upon the mailing. The real property owner may buy at any public sale, and if the mobile home or personal property is of a type customarily sold in a recognized market or is the subject of widely distributed standard price quotations, the real property owner may buy at a private sale.
   2.  A sale pursuant to subsection 1 transfers to the purchaser for value, all of the mobile home owner’s rights in the mobile home and personal property, and discharges the real property owner’s interest in the mobile home and personal property, and any tax lien, and any other lien. The purchaser takes free of all rights and interests even though the real property owner fails to comply with the requirements of this chapter or of any judicial proceedings, if the purchaser acts in good faith.
   3.  The proceeds of the sale of mobile home and personal property shall be distributed as follows:
   a.  First, to satisfy the real property owner’s judgment obtained under section 555B.8.
   b.  Second, to satisfy any tax lien for which a claim was asserted pursuant to section 555B.4, subsection 3.
   0c.  Third, to satisfy any other lien for which a claim was asserted pursuant to section 555B.4, subsection 4.
   c.  Any surplus remaining after the proceeds are distributed shall be held by the real property owner for six months. If the mobile home owner fails to claim the surplus in that time, the surplus may be retained by the real property owner. If a deficiency remains after distribution of the proceeds, the mobile home owner is liable for the amount of the deficiency.
   4.  Notwithstanding subsections 1 through 3, the real property owner may propose to retain the mobile home and personal property in satisfaction of the judgment obtained pursuant to section 555B.8. Written notice of the proposal shall be sent to the mobile home owner, lienholder, or other claimant, if that person has asserted a claim to the mobile home or personal property in the judicial proceedings. If the real property owner receives objection in writing from the mobile home owner, lienholder, or other claimant within twenty-one days after the notice was sent, the real property owner shall dispose of the mobile home and personal property pursuant to subsection 1. If no written objection is received by the real property owner within twenty-one days after the notice was sent, the mobile home and personal property may be retained. Retention of the mobile home and personal property discharges the judgment of the real property owner, and any tax lien, and any other lien.
    Sec. 19.  Section 562A.9, subsection 4, Code 2020, is amended to read as follows:
   4.  For rental agreements in which the rent does not exceed seven hundred dollars per month, a rental agreement shall not provide for a late fee that exceeds twelve dollars per day or a total amount of sixty dollars per month. For rental agreements in which the rent is greater than seven hundred dollars per month but less than one thousand four hundred dollars per month, a rental agreement shall not provide for a late fee that exceeds twenty dollars per day or a total amount of one hundred dollars per month.  For rental agreements in which the rent is at least one thousand four hundred dollars per month, a rental agreement shall not provide for a late fee that exceeds two percent of the rent per day or a total amount of ten percent of the rent per month.
    Sec. 20.  Section 562B.10, subsections 4 and 7, Code 2020, are amended to read as follows:
   4.  For rental agreements in which the rent does not exceed seven hundred dollars per month, a rental agreement shall not provide for a late fee that exceeds twelve dollars per day or a total amount of sixty dollars per month. For rental agreements in which the rent is greater than seven hundred dollars per month but less than one thousand four hundred dollars per month, a rental agreement shall not provide for a late fee that exceeds twenty dollars per day or a total amount of one hundred dollars per month.  For rental agreements in which the rent is at least one thousand four hundred dollars per month, a rental agreement shall not provide for a late fee that exceeds two percent of the rent per day or a total amount of ten percent of the rent per month.
   7.  a.  If a tenant who was sole owner of a mobile home dies during the term of a rental agreement then that person’s heirs or legal representative or the landlord shall have the right to cancel the tenant’s lease by giving sixty days’ written notice to the person’s heirs or legal representative or to the landlord, whichever is appropriate, and the heirs or the legal representative shall have the same rights, privileges and liabilities of the original tenant.
   b.  (1)  If a tenant who was sole owner of a mobile home dies during the term of a rental agreement resulting in the mobile home being abandoned as provided in section 562B.27, subsection 1, and the landlord cannot, despite due diligence, locate such tenant’s heirs or legal representatives, then the landlord may bring an action for abandonment as provided in section 555B.3, naming as defendants the estate of the tenant and any and all unknown heirs of the tenant and, upon the landlord’s filing of an affidavit that personal service cannot be had on any heir, legal representative, or estate of the tenant, the court shall permit original notice of such action to be served by publication pursuant to subparagraph (2) of this paragraph.
   (2)  Publication of the original notice shall be made once each week for three consecutive weeks in a newspaper of general circulation published in the county where the petition is filed, as provided in rules of civil procedure 1.313 and 1.314. Service is complete after the third consecutive weekly publication.
   (3)  In the event any tax lien or other lien exists on the mobile home, the landlord may proceed with an action for abandonment as provided in section 555B.3, except that:
   (a)  Notice shall be provided to the county treasurer as provided in section 555B.4, subsection 3, if a tax lien exists.
   (b)  Personal service pursuant to rule of civil procedure 1.305 shall be made upon any lienholder no less than twenty days before the hearing.
   (4)  Any notice to a lienholder shall state that failure to assert a claim to the mobile home is deemed a waiver of all right, title, claim, and interest in the mobile home and is deemed consent to the sale or disposal of the mobile home. If personal service upon the lienholder cannot be completed in time to give the lienholder the minimum notice required by subparagraph (3), the court may set a new hearing date.
    Sec. 21.  Section 648.5, subsection 1, Code 2020, is amended to read as follows:
   1.  An action for forcible entry and detainer shall be brought in a county where all or part of the premises is located. Such an action shall be tried as an equitable action. Upon receipt of the petition, the court shall set a date, time, and place for hearing. The court shall set the date of hearing no later than eight days from the filing date, except that the court shall set a later hearing date no later than fifteen days from the date of filing if the plaintiff requests or consents to the later date of hearing.  The requirement regarding the setting of the initial hearing is not a jurisdictional requirement and does not affect the court’s subject matter jurisdiction to hear the action for forcible entry and detainer.
DIVISION VI
MANUFACTURED HOUSING PROGRAM FUND

    Sec. 22.  Section 16.45, subsection 1, Code 2020, is amended to read as follows:
   1.  A manufactured housing program fund is created within the authority to further the goal of providing affordable housing to Iowans. The moneys in the fund are to be used for the purpose of providing funding to financial institutions or other lenders to finance the purchase by an individual of a manufactured home that is in compliance with all laws, rules, and standards that are applicable to manufactured homes and manufactured housing. The manufactured housing program fund is designed exclusively for manufactured homes sited on leased land.
DIVISION VII
TENANT COUNTERCLAIM FOR LANDLORD NONCOMPLIANCE

    Sec. 23.  Section 562B.25, Code 2020, is amended by adding the following new subsection:
   NEW SUBSECTION.  5.  a.  In an action for possession based upon nonpayment of the rent or in an action for rent where the tenant is in possession, the tenant may counterclaim for an amount which the tenant may recover under the rental agreement or this chapter. In that event, the court from time to time may order the tenant to pay into court all or part of the rent accrued and thereafter accruing, and shall determine the amount due to each party. The party to whom a net amount is owed shall be paid first from the money paid into court, and the balance by the other party. If rent does not remain due after application of this section, judgment shall be entered for the tenant in the action for possession. If the defense or counterclaim by the tenant is without merit and is not raised in good faith, the landlord may recover reasonable attorney fees.
   b.  In an action for rent where the tenant is not in possession, the tenant may counterclaim as provided in paragraph “a”, but the tenant is not required to pay any rent into court.
    Sec. 24.  EFFECTIVE DATE.  This division of this Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 25.  APPLICABILITY.  This division of this Act applies to actions for possession filed on or after the effective date of this division of this Act.
DIVISION VIII
UTILITY CHARGES

    Sec. 26.  Section 562B.14, subsection 6, Code 2020, is amended to read as follows:
   6.  The landlord or any person authorized to enter into a rental agreement on the landlord’s behalf shall provide a written explanation of utility rates, fees, charges, and services, subject to section 562B.16, subsection 3, to the prospective tenant before the rental agreement is signed unless the utility charges are paid by the tenant directly to the utility company.
    Sec. 27.  Section 562B.16, Code 2020, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.  A landlord that is responsible for payment of utilities being provided to the tenant shall not charge to the tenant an amount in excess of the actual cost of the utility and as specified in writing under section 562B.14, subsection 6. In addition to the actual cost of the utility, a landlord that is responsible for the payment of one or more utilities being provided to the tenant may impose a monthly utility administration fee to each tenant not to exceed five dollars per month. The amount of the utility administration fee shall not exceed five dollars per month regardless of the number of utilities being provided or the actual cost of the utilities being provided.
    Sec. 28.  Section 562B.25, Code 2020, is amended by adding the following new subsection:
   NEW SUBSECTION.  2A.  The failure of a tenant to pay utility charges that exceed the actual cost of the utility provided as required by section 562B.16, subsection 3, shall not be considered noncompliance with the rental agreement.
    Sec. 29.  Section 714H.3, subsection 2, Code 2020, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  h.  Section 562B.16, subsection 3.
DIVISION IX
UNLAWFUL OUSTER

    Sec. 30.  Section 562B.24, Code 2020, is amended to read as follows:
   562B.24  Tenant’s remedies for landlord’s unlawful ouster, exclusion or diminution of services.
   If the landlord unlawfully removes or excludes the tenant from the manufactured home community or mobile home park or willfully diminishes services to the tenant by interrupting or causing the interruption of electric, gas, water, or other essential service to the tenant, the tenant may recover possession, require the restoration of essential services or terminate the rental agreement and, in either case, recover an amount not to exceed two months’ periodic rent, and twice the actual damages sustained by the tenant, and reasonable attorney fees.  If the rental agreement is terminated, the landlord shall return all prepaid rent and security.
    Sec. 31.  EFFECTIVE DATE.  This division of this Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 32.  APPLICABILITY.  This division of this Act applies to actions under section 562B.24 filed on or after the effective date of this division of this Act.
DIVISION X
WRONGFUL FAILURE TO PROVIDE ESSENTIAL SERVICES

    Sec. 33.  NEW SECTION.  562B.23A  Wrongful failure to supply running water or essential services.
   1.  If contrary to the rental agreement or section 562B.16 the landlord deliberately or negligently fails to supply running water or other essential services, the tenant may give written notice to the landlord specifying the breach and may do one of the following:
   a.  Procure reasonable amounts of water or other essential services during the period of the landlord’s noncompliance and deduct the actual and reasonable cost from the rent.
   b.  Recover damages based upon the diminution in the fair market value of the mobile home or mobile home space.
   c.  Recover any rent already paid for the period of the landlord’s noncompliance which shall be reimbursed on a pro rata basis.
   2.  If the tenant proceeds under this section, the tenant may not proceed under section 562B.22 as to that breach.
   3.  The rights under this section do not arise until the tenant has given notice to the landlord or if the condition was caused by the deliberate or negligent act or omission of the tenant, a member of the tenant’s family, or other person on the premises with the consent of the tenant.
    Sec. 34.  EFFECTIVE DATE.  This division of this Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 35.  APPLICABILITY.  This division of this Act applies to actions under section 562B.23A filed on or after the effective date of this division of this Act.
DIVISION XI
TENANT CORRECTING DEFICIENCIES

    Sec. 36.  Section 562B.25, Code 2020, is amended by adding the following new subsection:
   NEW SUBSECTION.  4A.  In any action by a landlord for possession based upon nonpayment of rent, proof by the tenant of all of the following shall be a defense to any action or claim for possession by the landlord, and the amounts expended by the tenant in correcting the deficiencies shall be deducted from the amount claimed by the landlord as unpaid rent:
   a.  That the landlord failed to comply either with the rental agreement or with section 562B.16.
   b.  That the tenant notified the landlord at least seven days prior to the due date of the tenant’s rent payment of the tenant’s intention to correct the condition constituting the breach referred to in paragraph “a” at the landlord’s expense.
   c.  That the reasonable cost of correcting the condition constituting the breach is equal to or less than one month’s periodic rent.
   d.  That the tenant in good faith caused the condition constituting the breach to be corrected prior to receipt of written notice of the landlord’s intention to terminate the rental agreement for nonpayment of rent.
    Sec. 37.  EFFECTIVE DATE.  This division of this Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 38.  APPLICABILITY.  This division of this Act applies to actions by a landlord for possession filed on or after the effective date of this division of this Act.
DIVISION XII
DENIAL OF RENTAL OR REFUSAL OF SALE

    Sec. 39.  Section 562B.19, subsection 3, paragraphs a and c, Code 2020, are amended to read as follows:
   a.  Deny rental unless the tenant or prospective tenant cannot conform to manufactured home community or park rules and regulations.  A decision to deny rental shall conform to recognized principles, rules, and standards generally accepted by the professional manufactured home community or park industry to ensure the commercially reasonable safety and financial security of comparable manufactured home communities or mobile home parks. A landlord shall deliver the decision in writing to the tenant or prospective tenant as soon as commercially feasible and shall provide the basis for a denial in writing to the tenant or prospective tenant at the time of the decision.
   c.  Deny any resident of a manufactured home community or mobile home park the right to sell that person’s mobile home at a price of the person’s own choosing, but may reserve the right to approve the purchaser of such mobile home as a tenant but such permission shall only be withheld for a legitimate business reason within the recognized principles, rules, and standards described in paragraph “a”, and may not be unreasonably withheld, provided however, that the landlord may, in the event of a sale to a third party, in order to upgrade the quality of the manufactured home community or mobile home park, require that any mobile home in a rundown condition or in disrepair be removed from the manufactured home community or park within sixty days.  If the landlord refuses to approve the purchaser of the mobile home as a tenant, a legitimate business reason for the refusal shall be provided in writing to the resident who is selling the mobile home.
DIVISION XIII
PROHIBITED RENTAL AGREEMENT PROVISION —— HOME EQUIPMENT

    Sec. 40.  Section 562B.11, subsection 1, Code 2020, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  e.  Agrees to modify the physical characteristics or equipment of the mobile home, manufactured home, or modular home if the modification impairs the ability of the tenant to move the home from the mobile home space, unless otherwise required by federal or state law or by local ordinance.
DIVISION XIV
RENTAL AGREEMENT TERMS

    Sec. 41.  Section 562B.11, subsection 1, Code 2020, is amended by adding the following new paragraphs:
   NEW PARAGRAPH.  f.  Authorizes imposition of fines, penalties, or fees solely as a punishment or in amounts in excess of actual damages or costs incurred.
   NEW PARAGRAPH.  g.  Authorizes a person to confess judgment on a claim arising out of the rental agreement.
   NEW PARAGRAPH.  h.  Authorizes prohibitions, limitations, additional deposits, or other restrictive policies that are not based on ordinary wear and tear expected to occur during a tenancy or that are not based on community safety standards.
    Sec. 42.  Section 562B.11, subsection 2, Code 2020, is amended to read as follows:
   2.  A provision prohibited by subsection 1 included in a rental agreement is unenforceable. If a landlord or tenant knowingly and willfully uses a rental agreement containing provisions known to be prohibited by this chapter, the other party tenant may recover actual damages sustained by the tenant and not more than three months’ periodic rent and reasonable attorney fees.
DIVISION XV
RENTAL DEPOSITS

    Sec. 43.  Section 562B.7, subsection 12, Code 2020, is amended to read as follows:
   12.  “Rental deposit” means a deposit of money to secure performance of a mobile home space rental agreement under this chapter other than a deposit which is exclusively in advance payment of rent.
    Sec. 44.  Section 562B.13, subsection 2, Code 2020, is amended to read as follows:
   2.  All rental deposits shall be held by the landlord for the tenant, who is a party to the agreement, in a bank, credit union, or savings and loan association which is insured by an agency of the federal government. Rental deposits shall not be commingled with the personal funds of the landlord. All rental deposits may be held in a trust account, which may be a common trust account and which may be an interest-bearing account. Any interest earned on a rental deposit during the first five years of a tenancy shall be the property of the landlord.
    Sec. 45.  Section 562B.13, Code 2020, is amended by adding the following new subsection:
   NEW SUBSECTION.  9.  The court may, in any action on a rental agreement, award reasonable attorney fees to the prevailing party.
DIVISION XVI
LANDLORD SALES

    Sec. 46.  NEW SECTION.  562B.17A  Sale of mobile home by landlord.
   1.  Any sale of a mobile home located in a manufactured home community or mobile home park by a landlord or landlord’s agent shall be by written agreement and the landlord shall produce and assign the current certificate of title obtained from the department of transportation. The agreement shall state the basic terms of sale, including the total cost of the mobile home, finance charges, annual percentage rate, and the frequency and amount of each installment payment. Such agreement shall comply with the finance charge rate limitation in section 103A.58, subsection 1.
   2.  Any such sale that does not comply with this section may be voided by the buyer and the buyer may recover damages incurred, amounts paid as a rental deposit in excess of two months’ rent for the mobile home, and reasonable attorney fees.
   3.  A claim under subsection 2 may be combined with an action under chapter 648.
    Sec. 47.  Section 648.19, subsection 1, Code 2020, is amended to read as follows:
   1.  An action under this chapter shall not be filed in connection with any other action, with the exception of a claim for rent or recovery as provided in section 555B.3, 562A.24, 562A.32, 562B.17A, 562B.22, 562B.25, or 562B.27, nor shall it be made the subject of counterclaim.
DIVISION XVII
NONJUDICIAL FORECLOSURE

    Sec. 48.  Section 654.18, Code 2020, is amended by adding the following new subsection:
   NEW SUBSECTION.  5.  Actions under this section initiated on or after July 1, 2020, shall not be allowed for property consisting of a mobile home as defined in section 562B.7.
    Sec. 49.  Section 655A.9, Code 2020, is amended to read as follows:
   655A.9  Application of chapter.

   1.  This chapter does not apply to real estate used for an agricultural purpose as defined in section 535.13, or to a one or two family dwelling which is, at the time of the initiation of the foreclosure, occupied by a legal or equitable titleholder.
   2.  Actions under this chapter initiated on or after July 1, 2020, shall not be allowed for property consisting of a mobile home as defined in section 562B.7.
    Sec. 50.  EFFECTIVE DATE.  This division of this Act, being deemed of immediate importance, takes effect upon enactment.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to property law by modifying provisions relating to rental properties, manufactured home communities, and mobile home parks, and modifying provisions governing actions relating to such properties.
   Division I of the bill amends Code section 562B.10 to provide that a landlord may only terminate a tenancy if the tenant acts in material noncompliance of the rental agreement, commits a material violation of the manufactured home community or mobile home park rules or regulations, or commits any other violation of Code chapter 562B which allows the remedy of termination, or for a legitimate and material business reason the impact of which is not specific to one tenant or a change in the use of the land if change in the use of the land is included in the rental agreement as grounds for termination or nonrenewal.
   Division I of the bill takes effect upon enactment and applies to terminations of tenancies on or after the effective date of the division of the bill.
   Code section 562B.32(1) generally provides that a landlord shall not retaliate by increasing rent or decreasing services or by bringing or threatening to bring an action for possession or by failing to renew a rental agreement after the exercise or assertion of several specified rights and remedies. Division II of the bill adds the exercise of any of the rights and remedies under Code chapter 216 (Iowa civil rights Act of 1965) to that enumerated list.
   Current law provides that evidence of a complaint within six months prior to the alleged act of retaliation creates a presumption that the landlord’s conduct was in retaliation. Division II of the bill changes that period of presumption from six months to one year.
   Division II of the bill takes effect upon enactment.
   Division III of the bill provides that a violation of Code chapter 562B by a landlord or the landlord’s agent is an unlawful practice under Code section 714.16, governing consumer frauds.
   Division III of the bill takes effect upon enactment and applies to violations of Code chapter 562B occurring on or after the effective date of the division of the bill.
   Division IV of the bill modifies provisions governing an increase in the amount of rent paid by a tenant. The bill prohibits a landlord from increasing the amount of rent unless the tenant is notified, in writing, of the rent increase at least 180 days before the effective date of the rent increase. The bill further provides that the effective date of any increase in the amount of rent shall not be less than one year from either the effective date of the most recent rent increase or the beginning of the tenancy, whichever is later.
   Division IV of the bill provides that a landlord may increase the amount of rent due by any tenant in an amount greater than the average annual increase of the consumer price index for all urban consumers in the midwest region for the most recently available preceding 36-month period, if the landlord demonstrates the increase is justified for all of the following conditions: (1) the landlord, during the preceding 12-month period, has not been found in violation of any provision of Code chapter 562B that threatens the health or safety of the tenants of or visitors to the manufactured home community or mobile home park that persists for more than 15 days; and (2) the proposed rent increase is directly related to operating, maintaining, or improving the manufactured home community or mobile home park, and is justified by one or more factors specified in the bill. The bill also requires the written notice of a rent increase provided to the tenant to include the specific reasons and justifications for the increase. The bill also specifies that a decrease in the number or quality of amenities, services, or utilities provided under the rental agreement without a corresponding and proportionate reduction in rent shall be considered a rent increase for the purposes of the Code chapter.
   Division IV of the bill takes effect upon enactment and includes applicability provisions for certain requirements related to rent increases.
   Division V of the bill relates to landlord remedies and procedures relating to failure to timely pay rent, abandonment, and forcible entry and detainer.
   Current law caps late fees on rental agreements in which rent is greater than $700 per month at $20 per day and $100 per month. Division V of the bill allows a rental agreement to provide for late fees not to exceed 2 percent of the rent per day and 10 percent of the rent per month when rent exceeds $1,400 per month.
   Division V of the bill makes changes to the process for an action for abandonment of mobile homes. The bill extends the time by which a district court shall set a hearing after receiving a petition from not later than 14 days to no sooner than 25 days when there is a lien other than a tax lien on the mobile home or personal property. The bill provides notice, service, and publication procedures in an action for abandonment if the sole owner of a mobile home dies during the term of a rental agreement.
   Division V of the bill also makes a procedural change relating to jurisdiction in actions for forcible entry and detainer.
   Division VI of the bill amends Code section 16.45, which creates the manufactured housing program fund for the purpose of providing funding to financial institutions or other lenders to finance the purchase by an individual of a compliant manufactured home. The bill strikes language providing that the manufactured housing program fund is designed exclusively for manufactured homes sited on leased land.
   Division VII of the bill amends Code section 562B.25 relating to actions by a landlord for noncompliance with a rental agreement by a tenant or failure to pay rent. The bill establishes authority and procedures similar to those under Code section 562A.24 (uniform residential landlord and tenant Act) where in the case of a landlord’s action for possession based upon nonpayment of the rent or in an action for rent where the tenant is in possession, the tenant may counterclaim for an amount which the tenant may recover under the rental agreement or Code chapter 562B. In the event of such a counterclaim, the court from time to time may order the tenant to pay into court all or part of the rent accrued and thereafter accruing, and shall determine the amount due to each party. The party to whom a net amount is owed shall be paid first from the money paid into court, and the balance by the other party. If rent does not remain due after application of this section, judgment shall be entered for the tenant in the action for possession. If the defense or counterclaim by the tenant is without merit and is not raised in good faith, the landlord may recover reasonable attorney fees. Additionally, in an action for rent where the tenant is not in possession, the tenant may counterclaim but is not required to pay any rent into court.
   Division VII of the bill takes effect upon enactment and applies to actions for possession filed on or after the effective date of the division of the bill.
   Division VIII of the bill provides that a landlord that is responsible for payment of utilities being provided to the tenant shall not charge to the tenant an amount in excess of the actual cost of the utility and the failure of a tenant to pay utility charges that exceed the actual cost of the utility provided shall not be considered noncompliance with the rental agreement. In addition to the actual cost of the utility, the bill authorizes a landlord that is responsible for the payment of one or more utilities being provided to the tenant to impose a monthly utility administration fee to each tenant not to exceed $5 per month. The amount of the utility administration fee may not exceed $5 per month regardless of the number of utilities being provided or the actual cost of the utilities being provided. The bill also provides that a violation of the limitation on utility charges is a violation of Code section 714H.3 (private right of action for consumer frauds Act).
   Division IX of the bill amends Code section 562B.24 relating to a tenant’s remedies for a landlord’s unlawful ouster or exclusion or diminution of services. The bill adds reasonable attorney fees to the list of recoverable damages and provides that if the rental agreement is terminated, the landlord shall return all prepaid rent and security.
   Division IX of the bill takes effect upon enactment and applies to actions under Code section 562B.24 filed on or after the effective date of the division of the bill.
   Division X of the bill provides that if contrary to the rental agreement or Code section 562B.16 the landlord deliberately or negligently fails to supply running water or other essential services, the tenant may give written notice to the landlord specifying the breach and may do one of the following: (1) procure reasonable amounts of water or the essential service during the period of the landlord’s noncompliance and deduct the actual and reasonable cost from the rent; (2) recover damages based upon the diminution in the fair market value of the mobile home or mobile home space; or (3) recover any rent already paid for the period of the landlord’s noncompliance which shall be reimbursed on a pro rata basis.
   Division X of the bill takes effect upon enactment and applies to actions under Code section 562B.23A filed on or after the effective date of the division of the bill.
   Division XI of the bill amends Code section 562B.25 by providing that in any action by a landlord for possession based upon nonpayment of rent, proof by the tenant of all of the following shall be a defense to any action or claim for possession by the landlord, and the amounts expended by the tenant in correcting the deficiencies shall be deducted from the amount claimed by the landlord as unpaid rent: (1) that the landlord failed to comply either with the rental agreement or with the landlord’s duty to maintain a fit premises; (2) that the tenant notified the landlord at least seven days prior to the due date of the tenant’s rent payment of the tenant’s intention to correct the condition constituting the breach referred to at the landlord’s expense; (3) that the reasonable cost of correcting the condition constituting the breach is equal to or less than one month’s periodic rent; and (4) that the tenant in good faith caused the condition constituting the breach to be corrected prior to receipt of written notice of the landlord’s intention to terminate the rental agreement for nonpayment of rent.
   Division XI of the bill takes effect upon enactment and applies to actions by a landlord for possession filed on or after the effective date of the division of the bill.
   Code section 562B.19(3)(a) prohibits a landlord from denying rental unless the tenant or prospective tenant cannot conform to manufactured home community or park rules and regulations. Division XII requires any such decision to conform to recognized principles, rules, and standards generally accepted by the professional manufactured home community or park industry to ensure the commercially reasonable safety and financial security of comparable manufactured home communities or parks. Division XII also requires a landlord to deliver the decision in writing to the tenant or prospective tenant as soon as commercially feasible and shall provide the basis for a denial in writing to the tenant or prospective tenant at the time of the decision.
   Code section 562B.19(3)(c) prohibits a landlord from denying any resident of a manufactured home community or mobile home park the right to sell that person’s mobile home at a price of the person’s own choosing, but provides that the landlord has the right to approve the purchaser of such mobile home as a tenant but such permission may not be unreasonably withheld. Division XII allows such permission to be withheld only for a legitimate business reason within the recognized principles, rules, and standards accepted by the industry. If the landlord refuses to approve the purchaser of the mobile home as a tenant, a legitimate business reason for the refusal shall be provided in writing to the resident who is selling the mobile home.
   Division XIII of the bill adds to the list of prohibited rental agreement provisions in Code section 562B.11 a provision requiring agreement to modify the physical characteristics or equipment of the mobile home, manufactured home, or modular home if such modification impairs the ability of the tenant to move the home, unless otherwise required by law or local ordinance.
   Division XIV of the bill prohibits rental agreements under Code chapter 562B from providing that the tenant or landlord does any of the following: (1) authorizing a person to confess judgment on a claim arising out of the rental agreement; (2) authorizing imposition of fines, penalties, or fees solely as a punishment or in amounts in excess of actual damages or costs incurred; and (3) authorizing prohibitions, limitations, additional deposits, or other restrictive policies that are not based on ordinary wear and tear expected to occur during a tenancy or that are not based on community safety standards.
   Division XIV also amends language relating to the consequences and damages for using a rental agreement containing provisions known to be prohibited by Code chapter 562B.
   Division XV of the bill modifies the definition of “rental deposit” for purposes of Code chapter 562B, provides that the landlord is only entitled to the interest earned on the rental deposit for the first five years of the tenancy, and establishes authority for a court, in any action on a rental agreement, to award reasonable attorney fees to the prevailing party.
   Division XVI of the bill provides that any sale of a mobile home located in a manufactured home community or mobile home park by a landlord or landlord’s agent shall be by written agreement and the landlord must produce and assign the current certificate of title obtained from the department of transportation. The agreement shall state the basic terms of sale, including the total cost of the mobile home, finance charges, annual percentage rate, and the frequency and amount of each installment payment. Any such agreement shall also comply with Code section 103A.58(1), relating to maximum finance charges. The bill also authorizes a buyer to void any such sale that does not comply with the requirements, to collect specified damage amounts, and to combine such an action with a forcible entry and detainer action under Code chapter 648.
   Division XVII of the bill prohibits the use of nonjudicial foreclosure proceedings initiated under Code section 654.18 or Code chapter 655A against property consisting of a mobile home, as defined in Code section 562B.7, on or after July 1, 2020.
   Division XVII of the bill takes effect upon enactment.