2018 Iowa Legislation Affecting Iowa Landlords

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RENTAL JUDGMENT EXECUTION PERIOD INCREASED

With the passage of House File 2234, landlords will finally have the same rights as most other creditors regarding the length of time in which landlords can execute/collect upon their judgments against tenants for owed rent.  Under this new law, judgments based upon owed rent are now good for, and can be executed upon for, 20 years (except for judgments from “courts not of record,” which will have a 10-year execution period). The pre-July 1st law had mandated only a 5-year execution period for all rental judgments. The Landlords of Iowa and other landlord associations fought hard to get this bill passed into law for the benefit of all landlords.

SMALL CLAIMS JURISDICTIONAL MAXIMUM INCREASED

The small claims jurisdictional-amount-in-controversy limit has been increased as part of the Justice System Appropriations bill, House File 2492. The small claims limit will be raised from $5,000 to $6,500, effective July 1st. Thus, landlords and other creditors can now collect up to $6,500, plus fees if applicable, when filing small claims actions. The Iowa Supreme Court also issued a slightly revised set of small claims forms for all small claims suits filed on or after July 1, 2018.

WATER SERVICE EXCISE TAX APPLICABLE TO LANDLORDS

Effective July 1, 2018, in the state of Iowa is a new Water Service Excise Tax (“WET”), which was passed as Senate File 512. Iowa landlords, particularly manufactured housing communities, who furnish water in any way to their tenants, as well as other companies that could be deemed to be providing water service, need to take note of the new WET. A detailed summary of the new tax and general information regarding the applicability of the tax to landlords was set forth in my blog post from earlier this month.

MANUFACTURED HOUSING PROGRAM FUND

House File 2480, an Act concerning manufactured homes by creating a manufactured housing program fund and providing eligibility under the homeownership assistance program for military members for the purchase of manufactured homes, was passed due to the efforts of the Iowa Manufactured Housing Association and other industry members. Below is information regarding this program from Joe Kelly, Executive Director of the Iowa Manufactured Housing Association:

The new revolving loan fund will be set aside exclusively for manufactured housing sited in manufactured housing lease communities. Manufactured housing is already eligible for all Iowa Finance Authority programs involving real estate. Financial institutions and lenders approved by the Iowa Finance Authority will be able to access funding at virtually no cost and lend the money at below-market rates. The program is not limited to only new homes. There is no new appropriation for this fund. However, the legislation allows up to $1,000,000 for the fund from an existing revolving loan fund already shared by four other programs. These four funds, over the years, have had $8 million appropriated. Administrative rules will have to be written before the manufactured housing program can begin, so the program will likely not begin until late fall.

In addition, this law has a provision relating to veteran housing. The legislature appropriates $2,000,000 per year to help veterans with down payments for housing, with each veteran having access to $5,000. As of July 1, veterans will be able to use these down payment funds not only to purchase traditional, stick-build homes, but also to purchase manufactured homes for location in a manufactured housing community.

TAX REFORM

The first overhaul of Iowa’s state tax system in several decades was passed into law this session as Senate File 2417. A detailed summary of the tax reform is available from the Fiscal Services Division. Although the tax reform bill mainly deals with changes to individual tax rates, there are some implications for businesses. If you have questions about what Iowa or Federal tax reform means for your business, please let me know and one of our tax attorneys will assist you.

If you have questions, do not hesitate to give me a call at 515-288-2500.

Jodie McDougal

Davis Brown Law