SF 351 (LSB 1053XS (9) 88)

SENATE FILE 351

BY  SCHNEIDER and NUNN

A BILL FOR

An Act relating to utility service cost disclosures in connection with certain rental properties, providing penalties, and including effective date provisions. 
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 476.1C, subsection 1, paragraph a, Code 2019, is amended to read as follows:
   a.  Are not subject to the regulation authority of the utilities board under this chapter unless otherwise specifically provided. Sections 476.10, 476.20, 476.21, and 476.51, and 476.56 apply to such gas utilities.
    Sec. 2.  Section 476.56, Code 2019, is amended to read as follows:
   476.56  Energy costs provided.
   A gas or electric public utility shall provide, upon the request of a person who states in writing that the person is an owner of real property, or an interested prospective purchaser or renter of the property, which is or has been receiving gas or electric service from the public utility, the annual gas or electric energy costs for the property.  In addition, a gas or electric public utility and, notwithstanding section 476.1, subsection 4, a public utility furnishing water or sewer service, shall comply with the utility service cost disclosure provisions of section 562A.13A, subsection 4.
    Sec. 3.  NEW SECTION.  562A.13A  Utility service cost disclosure —— penalty.
   1.  For purposes of this section, unless the context otherwise requires:
   a.  “Applicable public utility” means a public utility which furnishes electric, gas, water, or sewer service to a rental property.
   b.  “Landlord” means a landlord as defined in section 562A.6, or any other person authorized to enter into a rental agreement on behalf of the landlord with respect to a rental property.
   c.  “Rental property” means a residential rental building in the state with twelve or more dwelling units.
   d.  “Utility service” means electric, gas, water, and sewer service.
   2.  In addition to the required disclosure provisions of 562A.13, a landlord of rental property shall disclose to a prospective tenant in writing a utility service cost disclosure statement in accordance with this section. At least one adult prospective tenant entering into the tenancy shall sign an acknowledgment form stating that the prospective tenant received the disclosure statement upon completing the rental application or signing the lease, whichever occurs first. Proof by the landlord that at least one adult prospective tenant signed a valid acknowledgment form shall be a defense to any claim or action brought under subsection 6.
   3.  a.  The cost information included in a utility service cost disclosure statement shall indicate the average annual costs for utility service for dwelling units in the rental property with the same number of bedrooms. If a landlord charges tenants for utility services using a ratio utility billing system, or a billing method which allocates the rental property’s actual utility bill to tenants based on an occupant factor, square footage factor, or any other factor, the cost information shall include the average charges for utility service in the previous twelve-month period, including any fees, for dwelling units in the rental property with the same number of bedrooms. If a landlord has authority over more than one rental property of similar construction and within the same business office, and such rental properties have the same utility service payment structure with the same applicable public utility, the disclosure statement may indicate the average annual costs for utility service for dwelling units in all such rental properties with the same number of bedrooms. For purposes of this paragraph, “of similar construction” means sharing common construction details, including but not limited to comparable building envelope designs or structural features, comparable arrangements for access to hallways, dwelling units, common areas, and washers or dryers, and comparable functions of utility services. 
   b.  The cost information included in a disclosure statement shall be computed by April 1 each year pursuant to subsection 4 and shall be valid and included in any disclosure statement provided by the landlord until the last day of March of the following year. In the event that a rental property was acquired by the landlord within the previous twelve-month period, disclosure statements shall be provided by the landlord to prospective tenants beginning ninety days after the date of closing.
   4.  a.  The landlord shall obtain the cost information required in subsection 3 from the applicable public utility by sending a written request to the utility between January 1 and February 1 of each year. The written request shall, at a minimum, include the following information:
   (1)  The name, address, and telephone number of the landlord.
   (2)  The number of bedrooms in each dwelling unit in the rental property.
   (3)  If cost information is to be computed for more than one rental property, a description of the applicable rental properties and the number of bedrooms in each dwelling unit in all such rental properties.
   (4)  Any other information deemed necessary by the applicable public utility to compute the cost information.
   b.  The applicable public utility shall compute the cost information for the landlord at no charge and shall provide such information to the landlord within thirty days of receiving the landlord’s written request, unless the parties otherwise agree in writing to extend the time. The applicable public utility may use any methodology to compute the cost information, provided that the average costs are based on dwelling units with the same number of bedrooms, and the methodology used to compute the cost information is disclosed to the landlord in writing. 
   c.  If the landlord fails to obtain cost information from the applicable public utility within thirty days of sending a valid written request or as otherwise agreed to in writing, or if the rental property is new construction or was renovated in the previous twelve-month period where the total cost of the renovation was greater than twenty-five percent of the assessed value of the rental property, the landlord shall include, in lieu of the cost information required in subsection 3, any of the following in the utility service cost disclosure statement:
   (1)  An estimate of anticipated annual utility service costs provided by the applicable public utility.
   (2)  An estimate of anticipated annual utility service costs provided by a licensed, registered, or certified professional with expertise in computing utility service costs.
   (3)  An estimate of anticipated annual utility service costs consistent with the United States department of housing and urban development section 8 guidelines.
   5.  The landlord shall retain and preserve all records relating to cost information obtained pursuant to subsection 4 for a period of not less than one year. On reasonable notice, a tenant may inspect and copy any such records during regular business hours. 
   6.  A landlord of rental property who enters into a rental agreement with a tenant without providing a utility service cost disclosure statement in violation of this section shall pay the tenant liquidated damages in the amount of five hundred dollars. If the landlord fails to pay the tenant such amount within thirty days of receiving a written request for payment from the tenant, the tenant may bring a civil action in small claims court. If a final judgment is entered against the landlord, the tenant shall recover damages in the amount of five hundred dollars, as well as court costs and reasonable attorney fees incurred by the tenant in bringing the action. The landlord shall also be subject to a civil penalty in the amount of five hundred dollars. Such civil penalty shall be remitted to the division of community action agencies of the department of human rights, to be used only for the low income home energy assistance program and the weatherization assistance program. 
    Sec. 4.  EFFECTIVE DATE.  This Act takes effect January 1, 2020.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill establishes new Code section 562A.13A within the uniform residential landlord and tenant law provisions of Code chapter 562A, relating to utility service cost disclosure requirements for certain rental properties.
   The bill defines “applicable public utility” to mean a public utility which furnishes electric, gas, water, or sewer service to a rental property. “Landlord” is defined as a landlord as defined in Code section 562A.6, or any other person authorized to enter into a rental agreement on behalf of the landlord with respect to a rental property. “Rental property” is defined as a residential rental building in Iowa with 12 or more dwelling units. “Utility service” is defined as electric, gas, water, and sewer service.
   The bill requires a landlord of rental property to disclose to a prospective tenant a utility service cost disclosure statement in writing in accordance with the bill. At least one adult prospective tenant entering into the tenancy shall sign an acknowledgment form stating that the tenant received the disclosure statement upon completing the rental application or signing the lease, whichever occurs first, which shall be a defense to any claim that the landlord violated the disclosure provisions.
   The bill provides that the disclosure statement shall indicate the average annual costs for utility service for dwelling units in the rental property with the same number of bedrooms. If a landlord charges tenants using a ratio utility billing system, as described in the bill, the cost information shall include the average charges for utility service in the previous year, including any fees, for dwelling units in the property with the same number of bedrooms. If a landlord has more than one rental property of similar construction, as defined in the bill, and with the same utility service payment structure for the same applicable public utility, the disclosure statement may indicate the average annual costs for dwelling units in all such rental properties with the same number of bedrooms. 
   The bill provides that cost information shall be computed by April 1 each year, which shall be valid and included in any disclosure statement provided until the last day of March of the following year. If the rental property was acquired by the landlord within the previous year, disclosure statements shall be provided by the landlord beginning 90 days after the date of closing. 
   The bill provides that the landlord shall obtain the cost information included in a disclosure statement from the applicable public utility by sending a written request to the utility between January 1 and February 1 of each year, with information described in the bill. The utility shall compute and provide such information to the landlord at no charge within 30 days of receiving such request, unless otherwise agreed to by the parties in writing. The utility may use any methodology to compute the cost information, provided that average costs are based on dwelling units with the same number of bedrooms and the methodology used is disclosed to the landlord in writing.
   The bill provides that if the landlord fails to obtain cost information from the applicable public utility within 30 days or as otherwise agreed to in writing, or if the rental property is new construction or was renovated in the previous year where the total cost of the renovation was greater than 25 percent of the assessed property value, the landlord shall include in the disclosure statement an estimate of anticipated annual utility service costs as described in the bill. 
   The bill provides that a landlord shall retain all records relating to cost information for a period of not less than one year. A tenant may inspect and copy such records on reasonable notice and during regular business hours.
   The bill provides that a landlord of rental property who enters into a rental agreement with a tenant without providing a utility service cost disclosure statement in violation of the bill shall pay the tenant liquidated damages in the sum of $500. If the landlord fails to pay the tenant such amount within 30 days of receiving a written request from the tenant to do so, the tenant may bring a civil action in small claims court. If a final judgment is entered against the landlord, the tenant shall recover $500 in damages, as well as court costs and reasonable attorney fees. The landlord shall also be subject to a civil penalty of $500, to be remitted to the division of community action agencies of the department of human rights, and used only for specified purposes.
   The bill modifies Code section 476.56, relating to the provision of energy costs by gas or electric utilities, by requiring gas and electric utilities, as well as public utilities furnishing water or sewer service, to comply with the utility service cost disclosure provisions of the bill. The bill also makes Code section 476.56 applicable to gas public utilities with less than 2,000 customers.
   Current law provides that a public utility which, after written notice from the Iowa utilities board of a specified violation of a provision in Code chapter 476, violates the same provision is subject to a civil penalty of at least $100 but not more than $2,500 per violation. If the violation is willful, the civil penalty increases to at least $1,000 but not more than $10,000 per violation.
   The bill takes effect January 1, 2020.