Senate File 6 - Introduced SENATE FILE 6 BY LOFGREN A BILL FOR An Act relating to contractor warranties including by providing 1 for the transfer of contractor warranties upon the passage 2 of legal or equitable title in the property, requiring 3 information relating to contractor warranties in real estate 4 disclosure statements, making penalties applicable, and 5 including applicability provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 1062XS (3) 88 gh/jh

S.F. 6 Section 1. NEW SECTION . 558.73 Contractor warranties —— 1 transferability. 2 1. As used in this section, “contractor warranty” means 3 an unexpired warranty provided by a contractor to an owner of 4 real property in connection with the contractor’s performance 5 of any alteration, repair, addition, modification, or 6 improvement to the owner’s real property, whether express or 7 implied. “Contractor warranty” , in relation to residential 8 property, includes any contractor warranty provided for 9 home improvement work, including but not limited to the 10 construction, painting or coating, installation, replacement 11 or repair of driveways, sidewalks, swimming pools, unattached 12 structures, porches, kitchens, bathrooms, chimneys, fireplaces, 13 stoves, air conditioning or heating systems, hot water 14 heaters, water treatment systems, electrical wiring or systems, 15 plumbing fixtures or systems, doors, windows, roofs, gutters, 16 downspouts, and siding. 17 2. A contractor warranty shall survive the passing of legal 18 or equitable title in the real property to any subsequent owner 19 of the real property for the duration to which the warranty is 20 unexpired. 21 Sec. 2. Section 558A.4, subsection 1, Code 2019, is amended 22 by adding the following new paragraph: 23 NEW PARAGRAPH . 0b. The disclosure statement shall include 24 information relating to unexpired contractor warranties 25 received by the transferor, as provided in rules which shall 26 be adopted by the real estate commission pursuant to section 27 543B.9. For purposes of this paragraph, “contractor warranty” 28 means the same as defined in section 558.73. 29 Sec. 3. APPLICABILITY. The section of this Act enacting 30 section 558A.4, subsection 1, paragraph “0b”, applies to 31 transfers of real property on or after the effective date of 32 this Act. 33 EXPLANATION 34 The inclusion of this explanation does not constitute agreement with 35 -1- LSB 1062XS (3) 88 gh/jh 1/ 2

S.F. 6 the explanation’s substance by the members of the general assembly. 1 This bill relates to contractor warranties. 2 The bill defines “contractor warranty” to mean an unexpired 3 warranty provided by a contractor to an owner of real property 4 in connection with the contractor’s performance of any 5 alteration, repair, addition, modification, or improvement to 6 the real property, whether express or implied. “Contractor 7 warranty”, in relation to residential property, includes any 8 contractor warranty for home improvement work, as described in 9 the bill. 10 The bill provides that a contractor warranty shall survive 11 the passing of legal or equitable title in the real property to 12 any subsequent owner of the real property for the duration to 13 which the warranty is unexpired. 14 Current law requires a person interested in transferring 15 real property including at least one but not more than four 16 dwelling units to deliver a written disclosure statement to 17 a person interested in being transferred the real property, 18 including information relating to the condition and important 19 characteristics of the property. The bill requires that the 20 written disclosure statement also include information relating 21 to unexpired contractor warranties received by the transferor, 22 as provided in rules adopted by the real estate commission. 23 Pursuant to Code section 558A.6, a transferor of real 24 property who violates the disclosure statement requirements 25 shall be liable for the amount of actual damages suffered by 26 the transferee, unless the transferor had no actual knowledge 27 of the inaccuracy or exercised ordinary care in obtaining 28 the information. In addition, Code section 714.8 provides 29 that a contract seller who intentionally provides inaccurate 30 information is guilty of a fraudulent practice. 31 The bill specifies that the section of the bill requiring 32 real estate disclosure statements to include information 33 relating to contractor warranties applies to transfers of real 34 property on or after the effective date of the bill. 35 -2- LSB 1062XS (3) 88 gh/jh 2/ 2