Senate Study Bill 1053 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON JUDICIARY BILL BY CHAIRPERSON ZAUN) A BILL FOR An Act relating to late fees and prohibited provisions in 1 rental agreements. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1901XC (3) 88 js/rn

S.F. _____ Section 1. Section 562A.9, subsection 4, Code 2019, is 1 amended to read as follows: 2 4. For rental agreements in which the rent does not exceed 3 seven hundred dollars per month, a rental agreement shall not 4 provide for a late fee that exceeds twelve dollars per day or a 5 total amount of sixty dollars per month. For rental agreements 6 in which the rent is greater than seven hundred dollars per 7 month but less than one thousand four hundred dollars per 8 month , a rental agreement shall not provide for a late fee that 9 exceeds twenty dollars per day or a total amount of one hundred 10 dollars per month. For rental agreements in which the rent is 11 at least one thousand four hundred dollars per month, a rental 12 agreement shall not provide for a late fee that exceeds thirty 13 dollars per day or a total amount of one hundred fifty dollars 14 per month. 15 Sec. 2. Section 562A.11, subsection 2, Code 2019, is amended 16 by striking the subsection and inserting in lieu thereof the 17 following: 18 2. A provision in a rental agreement prohibited by 19 subsection 1 is unenforceable. If the landlord seeks to 20 enforce the provision or accepts the tenant’s voluntary 21 compliance with the provision, the court may award the tenant 22 an amount not to exceed three months’ periodic rent and 23 reasonable attorney fees. 24 Sec. 3. Section 562B.10, subsection 4, Code 2019, is amended 25 to read as follows: 26 4. For rental agreements in which the rent does not exceed 27 seven hundred dollars per month, a rental agreement shall not 28 provide for a late fee that exceeds twelve dollars per day or a 29 total amount of sixty dollars per month. For rental agreements 30 in which the rent is greater than seven hundred dollars per 31 month but less than one thousand four hundred dollars per 32 month , a rental agreement shall not provide for a late fee that 33 exceeds twenty dollars per day or a total amount of one hundred 34 dollars per month. For rental agreements in which the rent is 35 -1- LSB 1901XC (3) 88 js/rn 1/ 2

S.F. _____ at least one thousand four hundred dollars per month, a rental 1 agreement shall not provide for a late fee that exceeds thirty 2 dollars per day or a total amount of one hundred fifty dollars 3 per month. 4 Sec. 4. Section 562B.11, subsection 2, Code 2019, is amended 5 by striking the subsection and inserting in lieu thereof the 6 following: 7 2. A provision in a rental agreement prohibited by 8 subsection 1 is unenforceable. If the landlord seeks to 9 enforce the provision or accepts the tenant’s voluntary 10 compliance with the provision, the court may award the tenant 11 an amount not to exceed three months’ periodic rent and 12 reasonable attorney fees. 13 EXPLANATION 14 The inclusion of this explanation does not constitute agreement with 15 the explanation’s substance by the members of the general assembly. 16 Current law caps late fees on rental agreements in which 17 rent is greater than $700 per month at $20 per day and $100 18 per month. Current law also allows an aggrieved party to 19 recover actual damages in certain situations when a prohibited 20 provision is willingly or knowingly used in a rental agreement. 21 This bill allows a rental agreement to provide for late 22 fees not to exceed $20 per day and $100 per month for rental 23 agreements in which rent is greater than $700 per month but 24 not more than $1,400 per month. When rent exceeds $1,400 per 25 month, a rental agreement may provide for late fees of no 26 more than $30 per day and $150 per month. Furthermore, if 27 a landlord seeks to enforce or accepts a tenant’s voluntary 28 compliance with a prohibited provision, the court may award the 29 tenant an amount not to exceed three months’ periodic rent and 30 reasonable attorney fees. 31 -2- LSB 1901XC (3) 88 js/rn 2/ 2