Bills › 90th General Assembly

HF 2394Signed by Governor · April 10, 2024

Relating to the wholesaling of residential property by a wholesaler, and providing civil penalties

Sponsored by the House Commerce Committee

Topics:Housing & propertyProfessional licensing

Same legislation: HSB 637, SSB 3133, SF 2290

Where it is now

  1. Done: IntroducedJanuary 30, 2024
  2. Done: SubcommitteeJanuary 30, 2024
  3. Done: House committeeFebruary 6, 2024
  4. Done: Passes the HouseFebruary 19, 202491–0
  5. Skipped: Senate committeeSkipped
  6. Done: Passes the SenateMarch 4, 202446–0
  7. Done: To the GovernorApril 10, 2024
  8. Done: Signed into lawApril 10, 2024

Signed into law What’s a funnel?

What’s in it

AI summary People who wholesale residential property must now have a real estate broker's license or work with one. These wholesalers are required to tell everyone involved who the actual parties in the deal are and explain how the wholesaling process works. If a wholesaler fails to provide these disclosures, the buyer or seller can cancel the contract and keep any earnest money. Individuals who break these rules could face fines of up to $10,000 or a percentage of the sale price.1

Read the official explanation

This bill relates to the wholesaling of residential property by a wholesaler. “Wholesaling”, “residential property”, and “wholesaler” are defined in the bill. The bill requires a person to be licensed as a real estate broker, or to be represented by a licensee, to engage in wholesaling. The bill permits a licensee to represent a wholesaler in a wholesaling transaction. The bill requires a wholesaler to disclose to all parties to a wholesale transaction prior to executing a contract to purchase or to convey an equitable interest to a buyer or other entity the legal identities of all parties to the wholesale transaction and an explanation of the wholesaling process, including disclosure that the wholesaler holds an equitable interest in the residential property and may not be able to convey title to the property. The bill also requires the wholesaler to provide a copy of an executed agency agreement to all parties prior to executing the contract. If a wholesaler fails to comply with the disclosure requirements, the seller or the buyer may cancel the contract at any time prior to the closing of the sale of residential property without penalty, and may retain any earnest money paid by the wholesaler. An individual engaged in wholesaling in violation of the bill is subject to a civil penalty of up to the greater of $10,000, or percent of the sale price of each residential property for which the individual engaged in wholesaling in violation of the bill. The real estate commission shall adopt rules as necessary to implement and administer the bill.

Full bill text · What changed before it passed2

House subcommittee

Named January 30, 2024 (as HSB 637). On February 1, 2024 it recommended passage. Vote Total: 3-0.

Three legislators hear a bill first and recommend what the committee should do; it’s the best time to weigh in. How to take part

Iowa Code it changes

Creates§543B.6A

How the Code works3

Lobbying

1 for · 0 against · 6 undecided · Who →

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