Overview
Iowa’s security deposit laws are outlined in Iowa Code § 562A. These laws are designed to ensure fairness in the handling of security deposits, providing clear guidelines on how landlords should collect, store, and return deposits, as well as outlining what deductions are allowed.
The law sets a limit on how much landlords can charge, requires deposits to be returned within a specified time, and mandates that landlords provide itemized statements for any deductions. Violating these requirements can result in penalties for landlords.
This guide covers:
How much landlords can charge
Deadlines for returning deposits
What deductions are allowed
Penalties for non-compliance
Related Statute: Iowa Code § 562A
1. Security Deposit Limits & Storage Requirements
Maximum deposit: Landlords may charge no more than two months’ rent as a security deposit for rental agreements.
Storage requirements: There is no requirement to place the deposit in an interest-bearing account. However, if the deposit is held in an account that earns interest, the interest must be credited to the tenant when the deposit is returned.
Law Reference: Iowa Code § 562A.12
2. Security Deposit Returns & Allowable Deductions
Return deadline: Security deposits must be returned within 30 days after the termination of the rental agreement and the tenant’s vacating of the unit.
Permissible deductions: Landlords may deduct for unpaid rent, damages beyond normal wear and tear, and other lease violations.
Itemized statement required: If deductions are made, landlords must provide an itemized statement of the damages and deductions within 30 days of the tenant vacating the property.
Law Reference: Iowa Code § 562A.12
3. Penalties for Mishandling Security Deposits
Forfeiture of right to deduct: If a landlord fails to return the deposit or provide an itemized statement within 30 days, they lose the right to retain any portion of the deposit.
Tenant remedies: Tenants may sue for the deposit, and if the landlord is found to have acted in bad faith, the tenant may be entitled to recover twice the amount wrongfully withheld.
Law Reference: Iowa Code § 562A.12
Key Takeaways
Landlords may charge no more than two months’ rent as a security deposit.
Deposits must be returned within 30 days of the tenant vacating the rental unit, along with an itemized statement of any deductions.
Landlords are required to return any interest earned on deposits if they are held in an interest-bearing account.
Failure to comply with these requirements may result in forfeiture of the deposit and legal penalties.
By following Iowa’s clear security deposit rules, landlords can avoid penalties, and tenants can ensure their deposits are handled properly.
Disclaimer: This blog post is intended for informational purposes only and does not constitute legal advice. Readers should not act or refrain from acting based on any information included in this post without seeking legal counsel or other professional guidance specific to their situation. The information is provided “as is” without any representations or warranties of any kind, express or implied, including but not limited to the accuracy, completeness, or reliability of the content. Laws and regulations may change and vary by jurisdiction.
