SF 2353 (LSB 6123XS (2) 91)

SENATE FILE 2353

BY  WESTRICH

A BILL FOR

An Act relating to residential tenant responsibility for utility charges, providing civil penalties, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 384.84, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  9A.  A city or city utility shall not assess, certify, or collect unpaid utility charges as a lien against real property if the utility service was provided to a tenant who, under a rental agreement, was responsible for payment of the utility charges.
    Sec. 2.  NEW SECTION.  562A.9A  Tenant responsibility for utility charges —— enforcement.
   1.  For purposes of this section, “utility” means a public, municipal, or cooperative owned system that provides water, sewer, sanitary sewer, storm water, electric, natural gas, or other similar utility service to residential rental property.
   2.  If a utility service account is established in the name of a tenant, or if a rental agreement provides that the tenant is responsible for payment of utility charges, the landlord shall not be liable for any unpaid utility charges incurred by the tenant.
   3.  A utility shall not do any of the following to collect unpaid utility charges incurred by a tenant:
   a.  Bill, charge, or seek payment from the landlord.
   b.  Transfer or attempt to transfer an unpaid balance to an account of the landlord.
   c.  Condition the initiation, continuation, or restoration of utility service to the premises on payment by the landlord.
   d.  File, record, certify, or threaten to file, record, or certify a lien, assessment, or other encumbrance against the landlord’s real property.
   e.  Use any indirect act or practice intended to compel payment by the landlord.
   4.  A utility shall maintain separate billing and collection accounts for tenants who are responsible for payment of utility charges and shall pursue collection solely against the tenant.
   5.  A utility that violates this section is subject to a civil penalty of not less than five hundred dollars and not more than five thousand dollars for each violation. Each billing statement, collection notice, lien filing, certification, or other collection attempt constitutes a separate violation.
   6.  A landlord aggrieved by a violation of this section may bring a civil action to recover any of the following:
   a.  Actual damages.
   b.  Statutory damages of one thousand dollars for each violation.
   c.  Injunctive or declaratory relief.
   d.  Reasonable attorney fees and court costs.
   7.  If a lien, assessment, or certification is filed or recorded in violation of this section, the utility shall release the lien or assessment within ten days after receipt of written notice from the landlord. Failure to timely release the lien or assessment constitutes a separate violation of this section.
   8.  The attorney general may enforce this section as an unlawful practice under section 714.16 and may seek civil penalties, restitution, and injunctive relief.
    Sec. 3.  APPLICABILITY.  This Act applies to utility billing, collection activity, lien filings, certifications, and enforcement actions occurring on or after the effective date of this Act, regardless of when the rental agreement was executed.
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 the responsibility for payment of utility charges incurred by tenants of residential units and provides enforcement mechanisms and penalties.
   The bill prohibits a city or city utility from assessing, certifying, or collecting unpaid utility charges as a lien against real property when the utility service was provided to a tenant who, under a rental agreement, was responsible for payment of the utility charges under the bill.
   The bill provides that when a utility service account is established in the name of a tenant of a residential unit, or when a rental agreement assigns responsibility for utility payments to the tenant, the landlord is not liable for unpaid utility charges incurred by the tenant.
   The bill prohibits a utility company from engaging in specified practices to collect a tenant’s unpaid utility charges, including billing or charging the landlord, transferring unpaid balances to a landlord’s account, conditioning utility service to the premises on payment by the landlord, filing or threatening to file a lien or other encumbrance against the landlord’s real property, or using indirect practices to compel payment by the landlord.
   The bill requires utilities to maintain separate billing and collection accounts for tenants who are responsible for payment of utility charges and requires utility companies to pursue collection solely against the tenant.
   The bill establishes civil penalties for violations in an amount of not less than $500 and not more than $5,000 per violation, with each billing statement, collection notice, lien filing, certification, or other collection attempt constituting a separate violation.
   The bill authorizes a landlord aggrieved by a violation to bring a civil action to recover actual damages, statutory damages of $1,000 per violation, injunctive or declaratory relief, and reasonable attorney fees and court costs.
   The bill requires a utility company that files or records a lien, assessment, or certification in violation of the bill to release the lien or assessment within 10 days of receipt of written notice from the landlord. Failure to timely release the lien or assessment constitutes a separate violation.
   The bill authorizes the attorney general to enforce the bill as an unlawful practice under Code section 714.16 (consumer fraud) and to seek civil penalties, restitution, and injunctive relief.
   The bill applies to utility billing, collection activity, lien filings, certifications, and enforcement actions occurring on or after the effective date of the bill, regardless of when the rental agreement was executed.