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Iowa Association of REALTORS®

Iowa Code &

Administrative Rules

(Paraphrased) 2014

Updated 1/2018

This booklet is prepared solely for the use of the Iowa Association of REALTORS®. This booklet

does not contain all the rules and regulations governing licensed real estate agents in the state of

Iowa. This booklet is a paraphrased version of the Iowa Code and Administrative Rules. The

complete Iowa Code and Administrative Rules can be downloaded free of charge from the Iowa

Real Estate Commission’s webpage: www.plb.iowa.gov.

The opinions expressed in this course are solely that of the Instructor and do not necessarily

represent the opinions of the Iowa Association of REALTORS

®

. The content of this course does not

constitute personal legal counsel. For clarification or more information regarding laws, rules, and

interpretations please procure the services of your own attorney.

Page | 2

1. LICENSING

License Mandatory

A person shall not engage directly or indirectly in

any of the following acts for a fee without first

obtaining a real estate license.

1. Sell, purchase, rent, or lease real estate.

2. List real estate for sale or lease.

3. Advertise as being engaged in the business.

4. Negotiate the sale or lease of real estate.

5. Deals in options on real estate

6. Collect rent for the use of real estate.

7. Assist in the procuring of prospects.

8. Assists in negotiating.

9. Prepare specific real estate documents.

Acts Excluded From Licensing Provisions

The provisions of this chapter shall not apply to

the following:

1. An owner, spouse of an owner, purchaser, or

another engaged by such person on a regular

full-time basis.

2. Any person acting with “power of attorney.”

3. A licensed Iowa attorney, acting solely as an

incident to the practice of law.

4. A person acting under court order.

5. An auctioneer must be limited to

establishing the time, place, and method of

an auction, advertising and crying the

property at the auction. If the auctioneer

goes beyond these limits, then the

requirements of the code do apply.

6. An isolated real estate rental transaction.

7. The sale of time-share uses.

8. A employee acting as a resident manager

who resides in the building being managed.

9. A employee of the federal government.

10. A employee of a utility company.

Court Actions—License a prerequisite.

A person shall not bring any action in the courts

for the collection of compensation without

proving that the person was licensed at the time

the alleged cause of action arose.

Basic Qualifications for License

1. Applicants who have been rejected must

wait 12 months before reapplying.

Applicants whose licenses have been

revoked must wait 2 years.

2. A person must be eighteen years of age. An

applicant is not ineligible because of their

citizenship, sex, race, religion, marital

status, or national origin.

3. An applicant who has been convicted of

crimes such as forgery, embezzlement, theft,

extortion, conspiracy to defraud must wait 5

years after conviction to apply. A license

may also be delayed or denied for someone

who is behind in child support or college

loan payments. A licensee shall notify the

commission of the licensee’s conviction of

an offense within ten days of the conviction.

4. Applicant who has had a professional

license of any kind revoked, may be denied

a license.

5. A person who makes a false statement on an

application may be denied a license.

6. The Commission may deny a license to a

person based upon moral turpitude.

Salespersons License

Education Qualifications

An applicant for a license as a real estate

salesperson must pass the license exam within 12

months of completing a 60 hour course in real

estate education.

In addition, all salesperson applicants must

complete 36 hours of coursework consisting of:

 12 hours of Developing Professionalism

and Ethical Practices

 12 hours of Buying Practices

 12 hours of Listing Practices

All Pre-license Education must be completed

within the 12 months prior to the date of

application.

All classroom education requires full time

attendance.

Page | 3

Application for License

1. After receiving passing score, the applicant

must file application for license and proof of

education, no later than last working day of

the sixth calendar month following passage

of examination.

2. A request by the affiliating broker must be

received by the Iowa Real Estate

Commission for an initial applicant.

3. Licensee must complete an FBI background

check before applying for a license.

Brokers License Qualifications

To qualify for a license as a real estate broker:

1. A person must complete 72 hours of broker

pre-license education within 24 months of

taking the examination.

2. The applicant must have been a licensed real

estate salesperson actively engaged in real

estate for a period of at least 24 months.

3. Licensee must complete an FBI background

check before applying for a brokers license.

Error and Omissions Insurance

Requirement

As a condition of active licensure, all real estate

licensees shall submit evidence of compliance

with the mandatory errors and omissions

insurance requirement at the time of license

application and within 20 days of a commission’s

request.

Failure to provide a response to an IREC audit of

E & O Insurance within 30 days of their request is

an automatic suspension.

Inactive status: Individuals whose licenses are on

inactive status are not required to carry errors and

omissions insurance.

Application Forms

Applicant must use commission supplied forms,

which cannot ask for recent photo. The

application may ask for present address and list of

places of business for the last five years, and a

written statement by employing broker.

Nonresident’s Place of Business

A licensed nonresident is not required to maintain

definite place of business within this state. He/she

must maintain an active place of business within

the state of the nonresident’s domicile.

Actions Against Nonresidents

Before the issuance of a license, the applicant

must file an irrevocable consent that suits may be

commenced in the proper court in this state in

which a cause of action may arise.

Non-residents must notify the commission within

15 days of any adverse action against their out-of-

state issued real estate license.

Custody of Salesperson’s license

The salesperson license must be delivered to the

real estate broker, and kept in the custody of the

broker.

Corporations, Associations, or

Partnerships

A partnership, association, corporation, or

professional corporation may open a real estate

company. In each case, at least one of its

members or officers shall be a real estate broker.

All other members active as salespersons must

also be licensed.

Real Estate Offices

and Licenses Required

1. Every Iowa resident real estate broker must

maintain an office, which must be open to

the public during business hours or by

appointment.

2. It is acceptable for more than one broker to

operate in an office at the same address.

3. A designated broker may manage more than

one office or physical location of business.

The broker will still be held responsible for

any and all transactions in all offices.

Change of Location

Notice in writing must be given to the real estate

commission by each licensee of any change of

principal business location, whereupon the

commission shall issue a new license. Electronic

notice is now acceptable.

Page | 4

Salespersons—Changing Brokers

When any real estate salesperson is discharged or

terminates affiliation, the real estate broker must

deliver their license to the real estate commission

within 72 hours, on the reverse side of the license,

the broker shall set out the date and cause of

termination. Then, the broker shall address a

communication to the salesperson stating that the

license has been delivered to commission. When

the salesperson affiliates with another broker, a

license shall be issued for the balance of the

current period. (A transfer form is now available

which may transfer a license immediately.)

(1) A former employing broker may pay a

commission directly to a broker

associate or salesperson if the

commission was earned while the

licensee was actively licensed with that

broker.

(2) Each licensee must inform the

commission of a change of residence

address within five working days.

License Terms

Licenses are issued for a three-year term, counting

the remaining portion of the year issued as a full

year. Licenses expire on December 31 of the

third year of the license term.

Continuing Education Requirements

To renew on active status, licensee shall complete

36 hours of approved programs, during the three

calendar years of the license term, including:

-Law Update - 8 hours

-Ethics - 4 hours

(1) A maximum of 24 hours of continuing

education may be taken by correspondence

(online or home study).

Classes must be at least one hour in length to

receive credit.

(2) Licensee may take the same class over again

if the instructors and course numbers are

different.

(3) Applicants for license renewal shall certify

that the number of hours of continuing education

required to renew a license was completed.

A. The commission will verify by random

audit the education claimed by licensee.

The documentation shall be retained for a

period of three years after the renewal.

B. It will not be acceptable for a licensee to

complete the required education after the

deadline.

C. Failure to provide required evidence will

result in the license being placed on

inactive status.

(4) A license may be renewed without the

required continuing education, on inactive status.

Prior to reactivating, deficient continuing

education hours must have been completed. The

maximum hours shall not exceed the prescribed

number of hours for one license renewal period.

(5) A licensee may satisfy all continuing

education deficiencies by repassing the

appropriate real estate examination within the six

months preceding the expiration of the license.

Prior approval by the Commission is needed to

take the test.

Renewing a License

Real estate license renewal notices are mailed in

November to each licensee. License renewal is

conducted online.

Renewal Deadlines

A signed application for renewal and regular

renewal fee must be filed by December 31 of the

year of expiration. Failure to comply shall

terminate the license.

1. The license may be reinstated after the

expiration date, if the application for

renewal is filed with the commission by

midnight, January 30, following the

expiration of the license. A $25 penalty will

be charged.

2. If the licensee does not meet the January 30

deadline, the individual shall be required to

retake and pass the appropriate license

examination AND pay a $25 per month

penalty until licensed is renewed OR

complete 36 hours of continuing education

AND pay a $25 per month penalty until the

license is renewed.

3. After 3 years, the person must qualify in the

same manner as for an original license.

Page | 5

Support Personnel

Both the firm or sponsoring broker and the

affiliated licensee are responsible for supervising

the acts of the personal assistant: however, the

affiliated licensee shall have the primary

responsibility.

1. Individuals actively licensed with one firm

may not work as support personnel with

another firm.

2. Individuals with an inactive status license

may work as support personnel for a

licensee, but not as a real estate licensee.

3. Broker must comply with the following:

a. Implement a written company

policy authorizing the use of

support personnel.

b. Specify in the written company

policy any duties that the support

personnel may perform on behalf

of the affiliated licensee.

Permitted activities include the

following:

(1) Answer the telephone, provide information

about a listing to other licensees, and forward

calls from the public to a licensee

(2) Submit data on listings to a multiple listing;

(3) Check on the status of loan commitments;

(4) Assemble documents for closing;

(5) Secure documents that are public information;

(6) Have keys made;

(7) Write advertisements and promotional

materials for the approval of the licensee;

(8) Place advertisements as directed;

(9) Record, and deposit money;

(10) Type contract forms as directed;

(11) Monitor personnel files;

(12) Compute commission checks;

(13) Place signs on property;

(14) Order items of routine repair;

(15) Act as courier for delivering documents;

(16) Schedule appointments with the seller;

(17) Arrange dates and times for inspections;

(18) Arrange times for the mortgage application,

the preclosing walk-through, and the

closing;

(19) Schedule an open house;

(20) Perform physical maintenance on a property;

(21) Accompany a licensee to an open house or a

showing and perform the following:

1. Open the door and greet prospects;

2. Hand out prepared printed material;

3. Have prospects sign a register or

guest book;

4. Accompany prospects through the

home for security purposes and not

to answer questions on material

aspects of the house or price and

terms.

Prohibited activities include the

following:

(1) Making cold calls for the purpose of securing

prospects for listings;

(2) Hosting open houses independently;

(3) Preparing promotion materials, without

review;

(4) Showing property independently;

(5) Answering any questions on title, financing,

etc;

(6) Answering any questions regarding a listing

except provided in writing by the licensee;

(7) Discussing or explaining a contract;

(8) Negotiating any commission;

(9) Discussing with the owner terms of the real

property offered;

(10) Collecting or holding deposit moneys;

(11) Providing owners with any advice;

(12) Holding one’s self out as being licensed.

*These prohibitations were placed upon

auctioneers who are not licensed in real estate,

effective July 1, 2012.

Page | 6

2. REAL ESTATE

COMMISSION

Mission of the Commission

The mission of the Iowa real estate commission is

to protect the public through the examination,

licensing, and regulation of real estate brokers,

salespersons, and firms.

Real Estate Commission Staff

1. Division of the Department of Commerce.

2. Commission has 7 members.

3. 5 licensed members (at least one must be a

salesperson.) All actively licensed for 5

years, the last 2 in Iowa.

4. 2 unlicensed members.

5. Appointed by governor, confirmed by

senate.

6. 3 year terms, maximum 3 terms or 9 years.

7. Only one per county. No government state

or federal elected officials.

Expenses of members—

Members of the real estate commission are

entitled to be reimbursed for their actual expenses.

Rules

The real estate commission may adopt rules to

carry out the provisions of this chapter. Their seal

authenticates all proceedings.

Fees

The real estate commission shall set fees for

examination and licensing. The commission shall

determine the annual cost of administering the

examination and licensing and shall set the fee

accordingly.

A fund derived from licensee fees is specifically

directed to the commission to provide an

Education Director and regulatory compliance

personnel.

List of Licensees

At least once a year the real estate commission

shall prepare a list of all licensees and of all

persons whose licenses have been suspended or

revoked within one year.

Commission Controversies

The commission is not authorized by law to

conduct hearings involving disputes over fees or

commissions between brokers or salespersons.

Petition for Declaratory Ruling

Any person or agency may file a petition with the

commission for a declaratory ruling concerning

the applicability of any statute, rule, policy,

decision, or order administered by the

commission. The petition must be filed at the

Iowa real estate commission office.

Page | 7

3. BROKERAGE AGREEMENTS

Brokerage Agreements

All brokerage agreements (with buyer or seller)

must be written and cannot be assigned without

the express written consent of all parties to the

original agreement.

Upon termination of association with the

principal broker, the affiliated broker associate or

salesperson shall not take or use any written

brokerage agreements. Said brokerage

agreements remain the property of the principal

broker.

Listings

A listing agreement must be in writing, properly

identifying the property and containing all of the

terms and conditions under which the property is

to be sold, including the price, the commission to

be paid, the signatures of all parties concerned and

a definite expiration date. It shall contain no

provision requiring a party signing the listing to

notify the broker of the listing party’s intention to

cancel the listing after such definite expiration

date. An exclusive agency or exclusive right to

sell listing shall so indicate.

A legible copy of every written listing

agreement shall be given to the owner of the

property by a licensee as soon as practical after

the signature of the owner is obtained.

(1) All listing contracts and all brokerage agency

agreements shall include a statement disclosing

the company’s policy on cooperating with and

compensating other brokers. Such disclosure

shall serve to inform the client of any policy that

would limit the participation of any other broker;

(2) The brokerage relationships shall commence

at the time of the brokerage agreement and shall

continue until closing of the transaction. If the

transaction does not close, or the agreement for

which the broker was engaged is not performed or

completed for any reason, the relationship shall

end at the earlier of the following:

a. Any date of expiration agreed upon by the

parties;

b. Any termination by written agreement of the

parties.

(3) Licensees shall have the duty after

termination to:

a. Account for all moneys and property related

to and received during the engagement; and

b. Keep confidential all information received.

Compensation

In any real estate transaction, the broker’s

compensation may be paid by the seller, the

buyer, the landlord, the tenant, a third party, or by

the sharing or splitting of any commission

between brokers.

Written permission of the client is required, as

follows:

1. A seller’s or landlord’s agent may share the

commission with another broker, with the

written consent of the seller or landlord.

2. A buyer’s or tenant’s agent may share the

commission with another broker, with the

written consent of the buyer or tenant.

3. A broker may be compensated by more than

one party for services in a transaction, if the

parties have consented in writing.

4. A licensee shall not accept, receive or

charge an undisclosed commission for a

transaction.

5. A licensee shall not pay an undisclosed

commission to any other licensee, except

payment for referrals to other licensees.

6. A licensee shall not pay any undisclosed

rebate to any party to a transaction, except a

gratuitous gift, such as flowers or a door

knocker, which are not intended to induce a

party to enter a transaction.

7. A licensee shall not give any undisclosed

credit against commission to any party to a

transaction.

8. A licensee shall not accept any undisclosed

payments for services provided by any third

party, such as payments for procuring

insurance or for conducting a property

inspection.

9. A licensee may pay a portion of commission

to a charity.

Solicitation of Brokerage Agreements

(1) A licensee shall not solicit a brokerage

agreement if the licensee knows, or should have

known, that the seller or buyer or landlord or

tenant has current brokerage agreement with

another broker.

Page | 8

However, if the owner initiates the discussion,

the licensee may negotiate and enter into a listing

or brokerage agreement that will take effect after

the expiration of the current listing.

(2) A licensee shall not negotiate with a party if

the licensee knows that the party has a written

unexpired exclusive brokerage agreement with

another broker

(3) A listing licensee shall not refuse to permit a

Customer to have a Customer’s agent present at

any step in a real estate transaction, including

viewing a property, seeking information about a

property, or negotiating directly or indirectly with

a licensee about a property listed by such licensee.

A listing licensee shall not be required to permit a

customer’s agent to be present when discussing

confidential matters with a client. Compliance

with the rule does not require a listing licensee to

share any commission with a customer’s agent.

(4) When a firm closes, the broker must notify all

listing clients they may enter a new listing

agreement with the firm of their choice.

Net Listing Prohibited

No licensee shall enter into a net listing agreement

for the sale of real property that specifies a net

sale price to be received by the owner with the

excess over that price to be received by the broker

as commission.

Signs on Property

Placing a sign on any property without the

consent of the owner shall be held as against the

best interests of the general public.

The licensee shall make every reasonable effort

to remove signs from a property after the

transaction is closed, unless permission of the new

owner is obtained.

Enforcing a Protective Clause

A protective clause is a clause in a listing

agreement that would allow a broker to claim a

commission after a listing has expired, if the

broker introduced the property to the buyer during

the term of the listing.

To enforce a protective clause, there must be:

(1) a provision for the protective clause in the

listing contract which establishes a definite

protection period, and (2) the broker must furnish

to the owner, in writing sent by regular and

certified mail, or by personal service with receipt,

prior to the expiration of the listing, the name and

contact information of persons to whom the

property was presented during the active term of

the listing and for whom protection is sought.

Prohibited Practices (Tying

Agreements)

These are illegal arrangements in which a broker

requires a party to pay for or use one or more of

the broker’s services in order to receive the

service the party wants.

(1) An arrangement in which a real estate

licensee requires, in connection with the sales of a

lot to a homebuilder, that the real estate licensee

receive from the homebuilder an exclusive right to

sell or list the house to be constructed on the lot.

(2) An arrangement in which a real estate

licensee agrees to sell lots on behalf of a

developer on the condition that the developer

require each homebuilder purchasing such a lot to

list the house to be constructed with the real estate

licensee.

(3) An arrangement in which a real estate

licensee, in connection with the sale of a lot

requires the party to pay a commission on the

value of the house to be constructed on the lot.

(4) Any arrangement in which the sale of real

estate to a prospective purchaser is conditioned

upon the listing of real estate owned by the

prospective purchaser with the real estate licensee.

(5) An arrangement in which a real estate

licensee, in connection with the sale of a lot to a

consumer, requires the consumer to use a

specified homebuilder.

(6) Any arrangement in which a real estate

licensee enters into an agreement with a financial

institution in which the making of a loan is

conditioned upon payment of a real estate

commission to the real estate licensee.

Property Management

A licensee shall not lease real estate unless the

licensee’s broker holds a current written property

management agreement with the owner.

Management agreement shall include but not

limited to the following items:

1. Proper identification of the property.

2. Creates general agency.

3. Compensation

4. Terms and Conditions of Management

Page | 9

4. ADVERTISING

A broker may not advertise in a manner indicating

that the property is being made available by a

private party. No real estate advertisement shall

show only a post office box number, telephone

number or street address. Every broker shall use

the regular business name and shall affirmatively

and unmistakably indicate that the party is a real

estate broker.

(1) Real estate advertising shall not be

misleading, deceptive, or intentionally

misrepresent any property.

(2) All advertising shall be conducted under the

supervision of the broker.

(3) A licensed firm advertising or marketing on a

website on the internet must include on each page

of the site the following data:

a. The firm’s name as registered.

b. The city and state in which the firm located;

c. States which the firm holds a real estate

brokerage license.

(4) A licensee advertising must include on each

page of the website on which the licensee’s

advertisement appears the following data:

a. The licensee’s name;

b. The name of the firm with which the

licensee is affiliated

c. The city and state in which the

licensee’s office is located; and

d. The states in which licensee holds license.

(5) A firm using e-mail, discussion groups, and

bulletin boards must include on the first or last

page of all communications the following data:

a. The firm’s name as registered;

b. The city and state firms’ offeree is located

c. The states in which the firm holds

license.

(6) A licensee using e-mail, discussion groups,

and bulletin boards, must include on the first or

last page of all communications the following

data:

a. The licensee’s name;

b. The firm with which the licensee is

affiliated;

c. The city and state licensee’s office is

located;

d. The states licensee holds license.

Lotteries Prohibited

Licensees are prohibited in participating in

lotteries and schemes of chances whereby the

buyer may or may not receive any property.

Referral Fees

A licensee may not pay referral fees or finder’s

fees to unlicensed third parties for providing leads

or referring business.

Advertising Under Own Name

Licensees are prohibited from advertising under

their own name unless they are the owner of the

property they are advertising and on which no

brokerage fees are to be paid. Brokerage consent

is also needed.

5. SELF INTEREST

A licensee shall not act in a transaction on the

licensee’s own behalf; on behalf of the licensee’s

immediate family, including but not limited to a

spouse, parent, child, grandparent, grandchild,

brother, or sister; or on behalf of the brokerage; or

on behalf of an organization or business entity in

which the licensee has an interest, unless the

licensee provides written disclosure of that

interest to all parties to the transaction.

Disclosure required must be made at the time of,

or prior to, the licensee’s providing specific

assistance to the party.

Licensee Acting as a Principal

A licensee shall not acquire any interest in any

property nor sell any property in which the

licensee has an interest without first making

written disclosure of the licensee’s true position

clear to the other party. An inactive status

licensee shall be not exempt.

Page | 10

6. PURCHASE AGREEMENTS

Real Estate Documents

Upon written request of a buyer or seller, a

licensee may select, prepare, and complete form

documents for the use in residential real estate

transactions of four units or less. This would be

limited to the following:

1. Purchase Agreements

2. Ground Water Hazard Forms

3. Declaration of Value Forms

Presenting Purchase Agreements

(1) Any and all written offers to purchase

received by any broker shall be promptly

presented to the owner for formal acceptance or

rejection.

(2) The formal acceptance or rejection of the

offers shall be promptly communicated to the

prospective purchasers.

(3) In the event that an offer is terminated or

rejected, all earnest money must be returned to the

buyer immediately.

(4) A customer’s agent seeking compensation

from the listing broker should not include any

commission proposals in an offer to purchase.

Any commission split must obtain authorization

and agreement from the listing broker.

(5) A listing agent must allow a buyer’s agent to

be present when an offer is presented, unless the

seller provides written instructions otherwise.

Dual Contracts

A person licensed shall not knowingly make the

use of two or more written or oral contracts for

the purpose of a sale concerning the same parcel

of real estate, one of which is not made known to

the prospective lender to enable the purchaser to

obtain a larger loan than the true sales price would

allow, or to enable the purchaser to qualify for a

loan which the purchaser otherwise could not

obtain.

Progress Report

After an offer to buy has been made by a buyer

and accepted by a seller, either party may demand

at reasonable intervals, and the broker must

furnish, a detailed statement showing the current

status of the transaction.

Loan Finder Fees

The acceptance of a fee or anything of value by a

real estate licensee from a lender for the referral

or steering of a client to the lender for a loan shall

be considered a violation of Iowa code.

Executed Instruments

Upon execution of any instrument in connection

with a real estate transaction, a licensee shall, as

soon as practicable, deliver a legible copy of the

original instrument to each of the parties thereto.

Page | 11

7. PROPERTY DISCLOSURES

558A-Seller Disclosure Statement

1. All sellers of residential property;

2. Dwellings of four units or less;

3. Must disclose physical, mechanical, structural,

and environmental condition of property;

4. To the buyer or buyers spouse;

5. Prior to accepting an offer or making a counter

offer.

6. Information must be made in good faith.

7. Must provide a State of Iowa Radon Fact Sheet

to Buyers.

8. Exempt property: Foreclosure, forfeitures,

bankruptcies, eminent domain, specific

performance, transfer to co-tenant, spouse or

heir, fiduciaries with estates, guardianship,

conservatorship, trusts, powers of attorney, and

quitclaim deed.

Property Condition Disclosure

Requirement

Disclosure must include sale, exchange, and real

estate contract, including rental or lease

agreements which contain any option to purchase.

(1) Listing agent’s responsibilities to seller.

At the time of listing, the licensee must obtain

a completed disclosure signed and dated by

each seller.

1. A licensee must deliver the executed

statement to a potential buyer or a

potential buyer’s agent prior to the seller

accepting a written offer to buy.

2. The licensee representing a seller shall

attempt to obtain the buyer’s signature and

date of signature on the statement. If the

licensee is unable to obtain the buyer’s

signature, the licensee shall obtain other

documentation establishing delivery of the

disclosure.

3. The listing broker shall maintain the

completed disclosure statement for a

minimum of five years.

4. The executed disclosure statement shall be

delivered to the buyer(s) by either personal

delivery or by certified or registered mail.

(2) Buyers agent’s responsibilities to buyer.

1. A licensee representing a buyer in transfer

must notify the buyer of the seller’s

obligation to deliver the property

disclosure statement.

2. If the disclosure statement is not delivered

when required, the licensee shall notify the

buyer that the buyer may revoke or

withdraw the offer

3. If a buyer elects to revoke the offer, the

licensee shall obtain a written revocation

or withdrawal from the buyer, and shall

deliver the revocation to the seller within

three days following personal delivery or

five days following delivery of the

disclosure by mail to the buyer.

Groundwater Hazard Statement

In a real estate transfer, transferors (or their

agents) must indicate as “unknown” or “known

and located” each of the following items:

1. Wells

2. Solid waste

3. Hazardous wastes

4. Underground storage tanks (USTs)

5. Burial sites

6. Septic System – Inspection or exemption

statements

Non-compliance with this law will result in

transfer not being recorded in court house records.

Page | 12

8. TRUST ACCOUNTS

(1) All earnest payments and down payments, all

rents collected, and property management funds,

received by the broker or salesperson on behalf of

the broker’s client, must be deposited in a trust

account in a federally insured financial institution

located in Iowa.

(2) All trust funds must be deposited into the

broker’s trust account by no later than five

banking days after the date indicated on the

document of the last signature of acceptance.

(3) A broker shall not commingle personal funds

in a trust account; except, up to $500 which may

be used by the broker to pay for expenses directly

related to maintaining the trust account.

(4) Unless contrary to agreement, all interest

earned on the trust account shall be transferred on

a calendar quarter basis to the state.

(5) Property management funds, if separately

maintained, shall not be required to be an interest-

bearing account.

(6) A trust account may bear interest to be

disbursed to the buyers or sellers or agreed 3

rd

party with the written approval of all parties.

(7) A broker shall be required to open and

maintain one or more trust accounts. The broker

shall file with the commission a written “Consent

to Examine and Audit Trust Account” form which

irrevocably authorizes the commission to examine

and audit the trust account.

(8) No funds shall be disbursed from the trust

account prior to the closing, until:

a. The broker is in receipt of a written release

from all parties.

b. The broker is in receipt of a final judgment

of the court.

c. There is a final decision of a binding

alternative dispute resolution process; or

d. A civil action is filed, at which time broker

may seek authorization to pay the deposit

into the court.

(9) Under no circumstances is the broker entitled

to withhold any portion of the earnest money

when a transaction fails to consummate, even if a

commission is earned.

(10) In the event all funds cannot be disbursed at

the time of closing, the broker shall obtain an

escrow agreement signed by both parties which

shall direct the broker regarding the future

disbursement of the funds.

(11) Where a licensee acts as a principal in a

transaction, these funds must be deposited into the

broker’s trust account when the licensee is acting

in the capacity of a real estate licensee.

(12) When licensee is acting as a principal of

property owned by the licensee, the use of the

brokers trust account is not required if

a. It is strictly, clearly and totally a “by

owner” transaction;

b. No commission is paid to or received by the

licensee; and

c. The licensee does not function as a real

estate licensee.

Page | 13

9. CLOSINGS

(1) It shall be mandatory for every broker to

deliver to the seller, at the time the transaction is

consummated, a complete detailed statement

showing all of the receipts and disbursements

handled by the broker.

(2) Also, the broker shall at the same time deliver

to the buyer a complete statement showing all

moneys received in the transaction from the buyer

and how and for what the same were disbursed.

(3) The broker shall retain all trust accounts

records and complete file on each transaction for a

period of at least five years.

(4) The listing broker shall be responsible for the

closing even though the closing may be completed

by another licensee.

(5) A salesperson shall not handle the closing of

any real estate transaction except under the direct

supervision or with the consent of the employing

broker.

(6) In the case of a cooperative sales between

brokers, the listing broker may elect to close the

transaction. If the listing brokers so elects, the

selling broker shall have the purchaser make the

earnest money check payable to the listing agent’s

trust account and shall immediately deliver the

earnest money check, along with the offer to

purchase, to the listing agent.

(7) When cash is accepted as earnest money by

the selling agent, the selling agent must deposit

the money in the selling broker’s trust account

and then immediately transfer the earnest money

deposit to the listing agent by issuing a check

drawn on the selling broker’s trust account.

(8) Anything other than cash or an immediately

cashable check shall not be accepted as earnest

money unless that fact is communicated to the

seller prior to the acceptance of the offer to

purchase, and is stated in the offer to purchase.

(9) An uncashed earnest money check must be

disclosed when presenting an offer.

(10) In the event that a buyer’s earnest money

check is returned for insufficient funds, the broker

shall

a. Notify the buyer to immediately replace it

with cash.

b. If this cannot be done, notify the seller who

will determine the course of action.

Page | 14

10. AGENCY

Changes in Common Law Duties and

Liabilities of Licensees and Parties

The duties of a licensee specified in this chapter

supersede any fiduciary duties of a licensee to a

party to a transaction based on common law

principles of agency.

“Agency” means a relationship in which a real

estate licensee acts for or represents another by

the other person’s express authority.

“Customer” means a consumer of real estate

services in connection with a real estate

transaction who is not being represented by the

licensee, but for whom the licensee may perform

ministerial acts. A customer may be a client of

another broker, or may not to be represented by

any broker.

“Ministerial acts” means those acts that a

licensee may perform for a consumer that are

informative in nature and do not rise to the level

of specific assistance. Ministerial acts include the

following:

1. Responding to phone inquires by consumers

as to the availability and pricing of

brokerage services;

2. Responding to phone inquires from a

consumer concerning the price or location of

property;

3. Attending an open house and responding to

questions about the property from a

consumer;

4. Setting an appointment to view property;

5. Responding to questions of consumers

walking into a licensee’s office concerning

brokerage services offered or particular

properties;

6. Describing a property or the property’s

condition in response to a consumer’s

inquiry;

7. Completing business or factual information

for a consumer on an offer or contract to

purchase on behalf of a seller client;

8. Showing a buyer client through a property

being sold by an owner on his or her own

behalf;

9. Referring a person to another broker or

service provider.

“Client” means a party to a transaction who has

an agency agreement with a broker for brokerage

services.

Disclosure of Agency

(1) Every broker or real estate firm must have a

written company policy identifying and describing

the types of real estate agency relationships in

which the broker and affiliated licensees may

engage.

(2) A broker shall not be required to offer or

engage in more than one type of agency

relationship, which the broker shall be free to

choose.

(3) A licensee shall not represent any party or

parties to a real estate transaction unless that

licensee makes disclosure of the licensee’s

company agency policy, identifying which

party(s) that licensee may represent in a

transaction.

(4) The agency disclosure must be made verbally

by the licensee at the time the licensee provides

specific assistance to the client or non-

represented customer.

“Specific assistance” means any communication

beyond casual conversation concerning the facts

and features of a property, which occurs prior to

the point of discussing any

1. Price range

2. Specific financial qualifications,

3. Motives,

4. Objectives of the seller or buyer, or tenant or

landlord, or

5. Prior to eliciting or accepting information

involving a proposed or preliminary offer

associated with a specific property, in which

the person may unknowingly divulge any

confidential personal or financial

information, which if disclosed to the other

party, could harm their bargaining position.

(5) A written agency disclosure must be made by

the licensee to all parties to a real estate

transaction identifying which party the licensee

represents in the transaction prior to an offer

being made or accepted by any party to a

transaction. The written disclosure shall be

acknowledged by separate signatures of all parties

to the transaction.

Page | 15

Duties of a Licensee

1. Duties to a CUSTOMER in a transaction.

A licensee shall do all of the following items:

1. Provide brokerage services to all parties to

the transaction honestly and in good faith.

2. Diligently exercise reasonable skill and care

in providing brokerage services to all parties.

3. Account for all property coming into the

possession of a licensee that belongs to any

party within a reasonable time of receiving the

property.

4. Disclose to each party all material adverse

facts that the licensee knows.

“Material adverse fact” means an adverse fact

that

1. (A) party indicates is of such significance, or

that (B) is generally recognized by a competent

licensee as being of such significance to a

reasonable party, that:

2. It affects or would affect the party’s decision to

enter into a contract or agreement concerning a

transaction, or

3. It affects or would affect the party’s decision

about the terms of the contract or agreement.

“Adverse fact” means a condition or occurrence

that is generally recognized by a competent

licensee as resulting in any of the following:

1. Significantly and adversely affecting the

value of the property.

2. Significantly reducing the structural

integrity of improvement to real estate.

3. Presenting a significant health risk to

occupants of the property.

Except for the following:

1. Material adverse facts known by the

party

2. Material adverse facts the party could

discover through a reasonably diligent

inspection, and which would be

discovered by a reasonably prudent

person under like or similar

circumstances.

3. Material adverse facts the disclosure of

which is prohibited by law.

4. Material adverse facts that are known to

a person who conducts an inspection on

behalf of the party.

2. Duties to a CLIENT in a real estate

relationship.

A licensee providing brokerage services to a client

shall do all of the following acts:

1. Place that client’s interest ahead of the

interest of any other party, unless loyalty to a

client violates the licensee’s duties.

2. Disclose to the client all information known

by the licensee that is material to the

transaction

3. Fulfill any obligation that is within the scope

of the agency agreement, except those

inconsistent under law.

4. Disclose to the client any financial interests

the licensee or the brokerage has in any

business entity to which the licensee refers a

client for any service.

5. In providing brokerage services, a licensee

shall not accept a fee or compensation related

to a transaction from a person other than the

licensee’s client, unless the licensee has

provided written notice to all parties to the

transaction that a fee or compensation will be

accepted by the licensee from such person.

6. The seller may, in the listing agreement,

authorize the seller’s broker to disburse part of

the broker’s compensation to other brokers,

including a buyer’s broker solely representing

the buyer. A broker representing a buyer shall

inform the listing broker (if there is one) or, if

there is no listing broker, the seller, either

verbally or in writing, of the agency

relationship before any previewing, showing

or negotiations are initiated, whichever comes

first.

7. The obligation of either the seller or buyer to

pay compensation to the broker is not

determinative of the agency relationship.

8. Nothing contained in this rule shall obligate a

party to pay compensation to a licensee unless

the party has entered into a written agreement

with the broker specifying the compensation

terms.

9. A licensee may work with a single party in

separate transactions pursuant to different

relationships.

10. If a party rejects representation, or refuses to

sign the agency disclosure document, or

refuses to sign acknowledging receipt of the

Page | 16

disclosure, the licensee shall note that fact on

a copy of the agency disclosure document.

11. A licensee who is offering real estate

brokerage services as an auctioneer shall make

the written disclosure to the buyer not later

than prior to the buyer entering into a written

purchase agreement for the property. The

identification of the successful bidder shall

constitute the first meaningful contact with a

buyer when specific assistance is provided.

12. The licensee shall retain a copy of the

disclosure form signed by the prospective

buyer, lessee seller, or lessor, for a period of 5

years.

Single Agent Representing a Seller or

Landlord

Licensee representing a seller or landlord shall

have the following duties:

1. To perform the terms of the written

agreement;

2. To exercise reasonable skill and care;

3. Accounting in a timely manner for all

money and property received;

4. Providing brokerage services to all

parties to the transaction honestly and in

good faith;

5. The promote the interests of the seller or

landlord with the utmost care, integrity,

honesty, loyalty, including:

a. Seeking a price and terms which are

acceptable to the seller or landlord;

except that the Licensee shall not be

obligated to seek additional offers to

purchase the property while the

property subject to a contract;

b. Presenting all written offers to and

from the seller or landlord in a

timely manner regardless of whether

the property is subject to a contract.

c. Disclosing all material adverse facts;

d. Advising the client to obtain expert

advice as to material matters which

are beyond the expertise of the

licensee;

6. Preserving the seller’s or landlord’s

confidential information.

a. Information concerning the client,

that if disclosed to the other party,

could place the seller or landlord at

a disadvantage when bargaining;

b. That the seller or landlord is

willing to accept less than the

asking price;

c. What the motivating factors are for

the client;

d. That the seller or landlord will agree to

sale, lease, or financing terms other than

those offered

e. The seller’s or landlord’s real estate need;

f. The seller’s or landlord’s financial

information.

Duty to a Buyer or Tenant (Customer)

Agents shall disclose to any customer all material

adverse facts actually known by the licensee.

1. The licensee owes no duty to conduct an

independent inspection of the property

for the benefit of the buyer or tenant and

owes no duty to independently verify the

accuracy or completeness of any

statement made by the seller or landlord

or any independent inspector, unless the

licensee knows the information is not

accurate.

2. Nothing in this rule precludes the

obligation of a buyer or tenant from the

responsibility of protecting their own

interest by, including, inspecting the

physical condition of the property and

verifying important information.

3. A real estate brokerage may provide

assistance to an unrepresented buyer or

tenant by performing such acts as

preparing offers and conveying those

offers to the seller or landlord and

providing information and assistance.

4. The licensee may show alternative

properties not owned by the seller or

landlord to prospective buyers or tenants

and may list competing properties for

sale or lease without breaching any duty.

Page | 17

Single Agent Representing

a Buyer or Tenant

A licensee representing a buyer or tenant shall

have the following duties;

A. To perform the terms of any written

agreement made with the client;

B. Exercise reasonable skill and care for the

client;

C. To promote the interests of the client with the

utmost good faith, loyalty, and fidelity,

including the following:

1. Seeking a property at a price and terms

which are acceptable to the buyer or

tenant, except that the licensee shall not

be obligated to seek other properties

while the client is a party to a contract;

2. Presenting all offers to and from the

client in a timely manner regardless of

whether the client is already a party to a

contract;

3. Disclosing to the buyer or tenant material

adverse facts concerning the property.

4. Advising the buyer or tenant to obtain

expert advice on material matters which

are beyond the expertise of the licensee;

5. Preserving the buyer’s or tenant’s

confidential information.

a. Information concerning the client that

if disclosed to the other party, could

place the client at a disadvantage

when bargaining;

b. That the buyer or tenant is willing to

pay more than the price offered;

c. What the motivating factors are for the

party;

d. That the buyer or tenant will agree to

sale, lease or financing terms other

than those offered;

e. The buyer’s or tenant’s real estate

needs;

f. The buyer’s or tenant’s financial

qualifications.

6. Accounting in a timely manner for all

money and property received;

7. Providing brokerage services to all parties

to the transaction honestly and in good

faith;

Duty to a Seller or Landlord (Customer)

Agent shall disclose to any customer all material

adverse facts actually known by the licensee.

1. The licensee owes no duty to conduct an

independent investigation of the buyer’s

or tenant’s financial condition for the

benefit of the seller or landlord and owes

no duty to verify the accuracy or

completeness of any statement made by

the buyer or tenant or any independent

source, unless the licensee knows the

information is not accurate.

2. Nothing in this rule shall limit the

obligation of a seller or landlord from

the responsibility of protecting their own

interest by verifying information

concerning or provided by the buyer or

tenant.

3. The licensee may show properties in

which the buyer or tenant is interested to

other prospective buyers or tenants, may

assist other competing buyers or tenants,

and may enter into brokerage service

agreements with other competing buyer

or tenants without breaching any duty or

obligation to the buyer or tenant.

Page | 18

Dual Agency

Disclosed Dual Agent

“Dual agent” means a licensee who, with the

written informed consent of all parties to a

contemplated real estate transaction, has entered

into a agreement with and therefore represents

both the seller and buyer or both the landlord and

tenant in the same transaction.

(1) A brokerage which has a company policy that

permits disclosed dual agency for in-house

transactions must provide a disclosed dual agency

consent agreement to the client, or prospective

client prior to engaging in any activities of a dual

agent. Agent must inform the prospective clients

that they are not required to consent to dual

agency representation.

A dual agent shall be an agent for both the seller

and buyer or the landlord and tenant and shall

have the duties and obligations required for a

single agent representing a seller or landlord and

for a single agent representing a buyer or tenant.

A dual agent must disclose to the clients all

material adverse facts concerning the property.

(2) A dual agency consent agreement shall:

a. Fairly and accurately describe the type of

representation the licensee will provide

each client;

b. Inform the clients that representing more

than one party to a transaction may

present a conflict of interest;

c. Inform the clients that they are not

required to consent to dual agency.

d. Describe the confidential information a

dual agent will not disclose to one client

about the other client; and

e. Include a statement that the clients

understand licensee’s duties and consent

to licensee’s providing services to more

than one client.

1.45(4) Potential Dual Agency Agreement

1. The potential dual agency agreement

should be provided to the seller or

landlord prior to entering into a listing

agreement.

2. The potential dual agency agreement

should be provided to the buyer or tenant

prior to entering into a buyer or tenant

agency agreement.

3. If the parties to a proposed transaction or

contract have agreed in writing to

potential dual agency, a dual agency

consent disclosure shall be presented to

the parties prior to signing an offer to

purchase or a rental or lease agreement.

The parties may accept or reject dual

agency at this point in the transaction.

Page | 19

Appointed Agency

Appointed Agents Within a Firm

Iowa Code authorizes a designated broker to elect

to appoint in writing one or more different

licensees affiliated with the broker to act as agent

to represent exclusively different clients in the

same transaction, to the exclusion of all other

affiliated licensees within the real estate

brokerage.

Appointed Agent Procedures and Disclosure

Prior to entering into a brokerage agreement, a

real estate brokerage shall notify a client in

writing of the real estate brokerage’s appointed

agent policy and those affiliated licensees within

the real estate brokerage that will be acting as

appointed agents of that client to the exclusion of

all other affiliated licensees within the real estate

brokerage. The appointed agent disclosure shall

include:

1. The name of the appointed agent(s);

2. A statement that the appointed agent will

be representing the client as the client’s

agent;

3. A statement that the agency may be

representing both the seller and the

buyer in connection with the sale or

purchase of real estate;

4. A statement that other agents may be

appointed during the term of the

brokerage agreement should the

appointed agent not be able to fulfill the

terms of the brokerage agreement.

5. A section for the client to consent or not

consent in writing to the appointment.

(1) Any broker may elect to offer the appointed

agent relationship.

On a property which the broker has a prior

existing exclusive single agent or dual agent

brokerage agreement, the broker shall not allow

the use of the appointed agent without first

obtaining the written consent of the particular

seller or landlord to the appointed agency

relationship.

(2) A designated broker shall not be considered to

be a dual agent solely because they make an

appointment under this rule.

(3) Appointed agent and designated broker

responsibilities:

A. A designated broker appointing an

affiliated licensee(s) to act as an agent of a

client shall take ordinary and necessary care

to protect confidential information disclosed

by the client to the appointed agent. Broker

shall implement procedures intended to

prevent mishandling of information through

both formal and informal sharing of

information within the brokerage, and the

arrangement of brokerage office space. The

licensees may not disclose, except to the

licensee’s designated broker, information

made confidential by request.

B. An appointed agent may disclose to the

brokerage’s designated broker/designee

confidential information of a client for the

purpose of seeking advice or assistance for

the benefit of the client in regard to a

possible transaction. Confidential

information shall be treated as such by the

designated broker.

Subagency

“subagent” means a broker and their affiliated

licensees, engaged by another broker to act as an

agent for a client. The subagent has the same

obligations and responsibilities to the client as the

primary broker representing the client.

Page | 20

11. ENFORCEMENT

Investigations by Commission

The real estate commission may revoke or

suspend a license for any of the following:

1. Making any substantial

misrepresentation.

2. Making any false promise of a character

likely to influence, persuade or induce.

3. Pursuing a continued and flagrant course

of misrepresentation, or making a false

promise.

4. Acting for more than one party in a

transaction without the knowledge of all

parties.

5. Accepting a commission or valuable

consideration as a real estate broker

associate or salesperson from any

person, except the broker associate’s or

salesperson’s employer, who must be a

licensed real estate broker.

6. Representing a real estate broker other

than the licensee’s employer, without the

express knowledge and consent of the

employer.

7. Failing, within a reasonable time, to

account for or to remit any moneys

coming into the licensee’s possession

which belong to others.

8. Being unworthy or incompetent to act as

a real estate broker or salesperson.

9. Paying a commission to a person who is

not a licensed broker or salesperson,

except:

a. The estate or heirs of a deceased

real estate licensee.

b. A citizen of another country

acting as a referral agent if the

country does not license real

estate brokers

c. Corporation which is wholly

owned, or owned with a spouse,

by a salesperson or broker

associate.

10. Failing, within a reasonable time, to

provide information requested by the

commission.

11. Fraud in procuring a license.

12. Professional incompetence.

13. Habitual intoxication or addiction to the

use of drugs.

14. Conviction of an offense included in

licensing section.

15. Fraud in representations as to skill or

ability.

16. Use of untruthful or improbable

statements in advertisements.

17. Noncompliance with insurance

requirements.

18. Noncompliance with the trust account

requirements.

19. Revocation of any professional license.

Method of Discipline

The Iowa real estate commission has authority to

impose, after proper procedures have been

initiated and followed, the following disciplinary

penalties:

1. Revocation of license. Suspension of license

for a specified period.

2. Nonrenewal of license.

3. Prohibit permanently the engaging in specified

procedures, methods or acts.

4. Probation.

5. Require additional education or training.

6. Require a physical or mental examination.

7. Issue citation, warning or reprimand.

8. Impose civil penalties not to exceed $2,500

per violation.

9. Such other sanctions allowed by law or any

combination of the above penalties.

Form and Content of the

Written Complaint

A complaint shall be made in writing and shall be

signed by complainant or an authorized

representative of the complainant. The complaint

may be in the form of a letter or affidavit or it

may be made using an official complaint form and

shall contain the following information:

1. The full name, address and telephone

number of the complainant.

2. The full name, address and telephone

number, if known, of the respondent.

3. A concise statement of the facts which

clearly and accurately appraise the

commission of the allegations against

the respondent.

Page | 21

Place and Time of Filing

The complaint may be delivered personally or by

mail to the executive secretary of the commission

at the office of the commission.

Receipt of Complaints and

Initiation of Investigations

When the commission receives a complaint, the

complaint shall be reviewed by the executive

secretary.

1. If the complaint is a verified, written

complaint, which together with evidence

presented with the complaint makes out

a case of a violation of a law within the

investigative jurisdiction of the

commission, the executive secretary

shall refer the complaint to the

investigating committee.

2. If the complaint does not meet the

criteria, the executive secretary may

decline to pursue the complaint further.

Investigating Committee

The commission may appoint an investigating

committee of two to seven commission members

for the purpose of conducting investigations. The

committee shall determine whether a violation has

occurred. If the committee determines that the

facts presented warrant disciplinary action, the

committee shall open a disciplinary case against

the licensee. If the investigating committee

determines that no disciplinary action is

warranted, the committee shall take no further

action on the complaint.

The complainant shall be informed by letter

containing a statement specifying the reasons for

rejection.

Following or during the investigation the

investigating committee may take one or more of

the following actions:

1. Request further investigation

2. Request that the licensee who is the

subject of the complaint meet with the

investigating committee to informally

discuss the allegations.

3. Determine that there is probable cause to

believe that a violation has occurred

which warrants discipline.

4. Determine that there is no probable cause

to believe that a violation has occurred

which warrants discipline.

5. Determines that there is probable cause to

believe that a violation of Iowa Code has

occurred which shall be referred to a

court of competent jurisdiction.

6. Attempt informal settlement of the

complaint.

Informal Discussion

The investigating committee may request that a

licensee and the licensee’s employing broker

attend an informal discussion. The licensee or the

employing broker is not required to attend or

participate. However, the licensee and the

employing broker are required to inform the

committee as to whether they will attend an

informal discussion.

(1) The informal discussion is a part of the

committee’s investigation of a pending

disciplinary case, and facts discussed at the

informal discussion may be considered by the

commission in the event that the complaint

advances to a contested case hearing.

(2) If the licensee chooses, the licensee may be

represented by an attorney at the informal

discussion at the expense of the licensee.

(3) The informal discussion shall be held in

closed session.

(4) The committee may seek an informal

settlement of the case at the time of the informal

discussion. If the parties agree to an informal

settlement of the case at the time of the informal

discussion, a statement of charges shall be filed

simultaneously with the settlement documents.

Contested Case Hearing (Formal

Hearing) Order for hearing or

complaint.

The commission may issue an order fixing the

time and place for hearing. A written notice of

hearing, together with a statement of the charges,

shall be mailed to the licensee at least 20 days

before the hearing by certified mail return receipt

requested to the last known business address of

the licensee.

Page | 22

Statement of Charges and

Notice of Hearing

The notice of hearing shall state:

1. The date, time and place of hearing

2. A statement that the party may be

represented by legal counsel at all

stages.

3. A statement of the legal authority and

jurisdiction under which the hearing is to

be held.

4. A reference to the statutes and rules

involved.

5. A short and plain statem9ent of the matter

asserted.

6. A statement that the respondent has the

right to appear at a hearing and be heard.

7. A statement requiring the respondent to

submit an answer.

8. A statement requiring the respondent

within the period of ten days after

receipt of the notice of hearing to

acknowledge receipt of the notice of

hearing on the form provided with the

notice.

9. A statement requiring the respondent to

furnish the commission a list of potential

witnesses and their current addresses

which the respondent intends to have

called.

Prehearing Conference

The prehearing conference shall be for the

purpose of identifying and pre-marking exhibits

and other documents as well as determining

stipulations or other means of limiting the issues

of the hearing.

Subpoena Powers

The commission has authority to subpoena

persons, books, papers, records and any other real

evidence.

Failure of Licensee to Appear

If a licensee fails to appear in person at the

hearing, the commission may proceed to conduct

the hearing and the licensee shall be bound by the

results of such hearing to the same extent as if the

licensee were present.

Penalties

Any person found guilty in the first offense shall

be guilty of a simple misdemeanor.

Suspended and Revoked Licenses

A suspended or revoked license must be returned

to the commission immediately.

(1) As of the effective date of a suspended or

revoked license, the licensee may not engage in

any activity which requires a real estate license

(2) When a broker is suspended or revoked, all

licensees associated with that broker shall

automatically be placed on “inactive” status for

the duration of the suspension or revocation,

unless transferred to another broker.

(3) A suspended or revoked licensee may only

receive compensation during the period of

suspension or revocation for those acts performed

and for which compensation was earned, when the

person was actively licensed.

(4) All listings and property management

agreements must be canceled by the suspended or

revoked broker.

(5) The seller or lessor shall be advised that they

may enter into a contractual agreement with

another broker of their choice.

(6) A suspended or revoked broker may not sell or

assign listings or management agreements to

another broker without the written consent of the

owner.

(7) A suspended or revoked broker may not

finalize any pending closings. This responsibility

must be given to another broker, an attorney,

financial institution or escrow company.

(8) A suspended or revoked broker is prohibited

from advertising real estate in any manner as a

broker. All advertising must be removed within

ten calendar days.

Page | 23

12. IOWA FAIR HOUSING ACT

1. Includes all real property.

2. The protected classes in Iowa are:

 Race

 Creed (may not be included in other

states)

 Color

 Sex

 National Origin

 Religion

 Disability

 Familial status

 Sexual Orientation

 Gender Identity

Note: Ancestry may be a protected class

within other contexts, however it is not

protected in Iowa Fair Housing Act.

3. 180 days to file a complaint.

4. File complaint with the Iowa Civil Rights

Commission.

5. For more information, go to the Iowa Civil

Rights Commission webpage:

www.state.ia.us/government/crc.

Page | 24

Study Questions: Iowa License Law

1. A partnership or corporation wants to operate a real estate office. Who must hold the real estate license?

__________________________________________________________________________________________

2. Name at least five Exemptions to the license requirement (Who doesn’t need a real estate license?)

__________________________________________________________________________________________

3. Name three reasons why an applicant for a real estate license might be turned down.

__________________________________________________________________________________________

4. a. List qualifications for a salesperson b. List qualifications for a broker.

__________________________________________________________________________________________

5. A person passes the real estate test on March 2, 2007. When is the last possible day the person can apply for

a real estate license.

__________________________________________________________________________________________

6. Can a nonresident obtain an Iowa real estate license? Under what conditions?

__________________________________________________________________________________________

7. How many licenses must a branch office display?

__________________________________________________________________________________________

8. How many brokers can a salesperson work for?

__________________________________________________________________________________________

9. Name activities that an unlicensed personal assistant may NOT do.

__________________________________________________________________________________________

Page | 25

10. A broker is going out of business. How can he sell his listings to another company?

__________________________________________________________________________________________

11. What are the mandatory continuing education requirements for the first renewals? Who is responsible for

keeping track and maintaining records?

__________________________________________________________________________________________

12. A licensee realized on December 30 that she doesn’t have the required number of CE courses completed.

She still wants to renew. What should she do?

__________________________________________________________________________________________

13. What is the mission of the Commission?

__________________________________________________________________________________________

14. Describe the composition of the Real Estate Commission. How are the members appointed and from what

counties.

__________________________________________________________________________________________

15. Two brokers disagree on a commission split. What are the procedures for filing a complaint with the

commission?

__________________________________________________________________________________________

16. What are the requirements for a valid listing agreement in Iowa? Can it be oral?

__________________________________________________________________________________________

17. A salesperson is planning to leave Broker A to work for Broker B and wants to take his listings with him.

Under what conditions can the salesperson take the listings?

__________________________________________________________________________________________

18. What does Iowa law say in regard to cooperating with other brokers?

__________________________________________________________________________________________

Page | 26

19. How long does a brokerage agreement last?

__________________________________________________________________________________________

20. What are the two duties that a licensee must observe after a brokerage agreement is terminated?

__________________________________________________________________________________________

21. Is the seller the only party permitted to pay the brokerage fee? Can the broker receive more than one fee?

__________________________________________________________________________________________

22. Does the payment of the fee establish an agency relationship?

__________________________________________________________________________________________

23. A seller has his house listed with Broker A. Broker B knows that he can do a better job marketing the

property. How can Broker B get the listing?

__________________________________________________________________________________________

24. At what time during the listing agreement may a licensee place a “For Sale” sign on the listed property?

__________________________________________________________________________________________

25. Who does the protective clause protect? What are the requirements if the broker is planning to enforce a

protective clause?

__________________________________________________________________________________________

26. What is a “net” listing? What two conditions are required in a listing to prevent a net listing?

__________________________________________________________________________________________

27. A licensee’s neighbor will be overseas for two years. The licensee is planning to find a tenant, collect

rents, and to generally be responsible for the property. What document establishes the agency relationship

between the owner and the licensee? What must it include?

__________________________________________________________________________________________

Page | 27

28. What does the law say about “tying” or “prohibited practices”? Give several examples.

__________________________________________________________________________________________

29. What are the two conditions under which a licensee can advertise property in his own name?

__________________________________________________________________________________________

30. The Law states that certain disclosures be made in all printed brokerage advertising to guard against “blind

ads.” How does the broker avoid “blind ads”? Who is responsible for all advertising?

__________________________________________________________________________________________

31. What information must be included on a real estate company web site?

__________________________________________________________________________________________

32. What must be included on a company electronic communications?

__________________________________________________________________________________________

33. What information must a licensee include on his or her web site?

__________________________________________________________________________________________

34. What information must a licensee include on any electronic communications?

__________________________________________________________________________________________

35. What, if anything, must a licensee do if the licensee is planning to represent a parent or sibling or any close

relative?

__________________________________________________________________________________________

36. A licensee wishes to buy a listed property for the licensee’s own personal portfolio. Under what conditions

may the licensee make this purchase?

__________________________________________________________________________________________

Page | 28

37. Is it permissible to rewrite a contract with a larger purchase price in order to assist the buyer in getting a

larger loan?

__________________________________________________________________________________________

38. When must a broker actually give a progress report to either party?

__________________________________________________________________________________________

39. Before the seller accepts the first offer, his agent receives two more offers. When should the subsequent

offers be presented to the seller?

__________________________________________________________________________________________

40. Who is responsible for the seller disclosure statement? What must it include? To what properties does it

apply?

__________________________________________________________________________________________

41. How long must the broker keep a copy of the completed disclosure statement?

__________________________________________________________________________________________

42. How many trust accounts must a broker maintain? What are the requirements? How much money may be

personal in the account?

__________________________________________________________________________________________

43. When must the broker deposit trust funds? Money in a trust account earns a lot of interest. Who gets the

interest?

__________________________________________________________________________________________

44. Who is responsible for closings? The documents? How long must they be kept?

__________________________________________________________________________________________

45. A buyer gives the selling agent $500 cash as earnest money. How does the selling agent handle the cash in

getting the earnest money to the listing broker.

__________________________________________________________________________________________

Page | 29

46. A buyer wishes to use a diamond ring as earnest money. May she?

__________________________________________________________________________________________

47. The deal falls through, but the broker feels that he earned the commission. Can the broker take his

commission out of the earnest money?

__________________________________________________________________________________________

48. How soon must a licensee obtain E & O Insurance?

__________________________________________________________________________________________

49. Is an inactive licensee required to carry E & O Insurance?

__________________________________________________________________________________________

50. List at least 3 ministerial acts that may be performed on behalf of an unrepresented third party.

__________________________________________________________________________________________

51. List at least 3 “specific assistance” communications that should be done only with a client.

__________________________________________________________________________________________

52. When must the agency disclosure be made? Can it be oral?

__________________________________________________________________________________________

53. Define “adverse fact.”

__________________________________________________________________________________________

54. What happens to the buyer’s earnest money if the seller decides to back out of the closing?

__________________________________________________________________________________________

55. A seller’s agent wants to assist the transaction by helping the buyer (who is not represented) to fill out the

offer. Can the agent do this?

__________________________________________________________________________________________

Page | 30

56. Is the buyer’s agent obligated to perform a property inspection?

__________________________________________________________________________________________

57. What are the various agency alternatives which licensees may have with their clients?

__________________________________________________________________________________________

58. When must the agency disclosure be made to the sellers? To buyers?

__________________________________________________________________________________________

59. Under what conditions can a licensee represent both the buyer and the seller?

__________________________________________________________________________________________

60. Discuss “appointed agency” and procedures to implement.

__________________________________________________________________________________________

61. Who determines what a company’s agency policy is?

__________________________________________________________________________________________

62. List at least five reasons why the Real Estate Commission may instigate an investigation.

__________________________________________________________________________________________

63. How much notice must the Commission give a licensee before holding a hearing? What if the licensee

does not appear?

__________________________________________________________________________________________

64. Name at least five penalties that the Commission can impose upon a licensee as disciplinary action.

__________________________________________________________________________________________

65. What happens to suspended or revoked licenses? What about the sales person’s license if the broker’s

license is suspended or revoked?

__________________________________________________________________________________________

Page | 31

66. What does the law say about lenders paying referral fees to licensees who send buyers to the lenders?

__________________________________________________________________________________________

67. What is the effect of delinquent college loans and/or delinquent child support payments?

__________________________________________________________________________________________

68. Name the five hazards that are listed on the Groundwater Hazard Statement. Who must sign this form?

__________________________________________________________________________________________

Key terms:

broker tying agreement

license term dual contracts

Real Estate Commission property disclosure

real estate education fund ground water hazard

declaratory ruling earnest money deposit

E & O insurance commingling

customer written agency disclosure

ministerial acts material adverse fact

client notice of hearing

agency disclosure progress report

specific assistance appointed agency

dual agent protective clause