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House
File
2698
-
Introduced
HOUSE
FILE
2698
BY
COMMITTEE
ON
JUDICIARY
(SUCCESSOR
TO
HSB
750)
A
BILL
FOR
An
Act
relating
to
business
entity-owned
residential
1
arrangements,
and
including
effective
date
provisions.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
TLSB
6902HV
(1)
91
lh/jh
H.F.
2698
Section
1.
Section
216.12,
subsection
1,
paragraph
a,
Code
1
2026,
is
amended
to
read
as
follows:
2
a.
Any
bona
fide
religious
institution
with
respect
to
3
any
qualifications
it
may
impose
based
on
religion
or
sexual
4
orientation
when
the
qualifications
are
related
to
a
bona
5
fide
religious
purpose,
unless
the
religious
institution
owns
6
or
operates
property
for
a
commercial
purpose
or
membership
7
in
the
religion
is
restricted
on
account
of
race,
color,
or
8
national
origin.
This
paragraph
does
not
apply
to
the
sale,
9
rental,
or
occupancy
of
a
dwelling
that
is
a
single-family
10
residence,
duplex,
triplex,
or
quadruplex
located
on
a
11
subdivided
lot
within
a
parcel
of
land
of
twenty-five
acres
or
12
more
that
is
owned
by
a
religious
organization,
association,
or
13
society,
or
a
nonprofit
institution
or
organization
operated,
14
supervised,
or
controlled
by
or
in
conjunction
with
a
religious
15
organization,
association,
or
society.
16
Sec.
2.
NEW
SECTION
.
558C.1
Definitions.
17
As
used
in
this
chapter,
unless
the
context
otherwise
18
requires:
19
1.
“Business
entity”
means
a
partnership,
corporation,
joint
20
venture,
limited
liability
company,
trust,
or
other
business
21
organization
or
business
association,
however
organized.
22
2.
“Managing
entity”
means
a
business
entity
that
owns
23
residential
property
used
in
a
residential
arrangement.
24
3.
“Residential
arrangement”
means
an
arrangement
in
which
25
the
purchaser
of
an
interest
in
a
business
entity
is
entitled
26
to
exclusive
possession
of
residential
property
owned
by
the
27
business
entity
if
the
purchaser
holds
the
interest
in
the
28
business
entity.
29
4.
“Residential
property”
means
real
property
and
30
improvements
for
a
single-family
residence,
duplex,
triplex,
31
or
quadruplex.
“Residential
property”
does
not
include
a
unit
32
as
defined
in
section
557A.2.
33
Sec.
3.
NEW
SECTION
.
558C.2
Disclosure
requirements
——
34
prohibited
actions
——
enforcement.
35
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1.
An
agreement
for
the
purchase
of
an
interest
in
a
1
managing
entity
shall
disclose
to
the
purchaser
that
the
2
agreement
is
for
the
purchase
of
an
interest
in
the
business
3
entity
and
not
for
the
purchase
of
any
residential
property.
4
2.
A
purchase
agreement,
operating
agreement,
bylaws,
5
rules,
or
other
governing
document
relating
to
a
residential
6
arrangement
or
the
ownership
interest
in
the
managing
entity
7
shall
not
require
that
a
dispute
arising
from
the
arrangement
8
or
ownership
interest
be
resolved
in
a
forum
other
than
a
court
9
established
under
the
laws
of
this
state
or
the
United
States.
10
3.
A
managing
entity
shall
not
take
any
action
relating
11
to
an
interest
in
the
managing
entity
in
a
manner
that
would
12
constitute
a
violation
of
chapter
216
if
the
interest
in
the
13
managing
entity
were
an
interest
in
real
property,
including
14
but
not
limited
to
any
of
the
following:
15
a.
Restricting
or
prohibiting
the
transfer
of
an
interest.
16
b.
Imposing
discriminatory
conditions
to
retain
or
maintain
17
an
interest.
18
c.
Refusing
to
grant
an
interest
to
an
otherwise
qualified
19
person.
20
4.
Notwithstanding
any
provision
in
an
agreement
between
21
an
owner
of
an
interest
and
a
managing
entity,
an
owner
may
22
transfer
the
interest
without
approval
by
the
managing
entity.
23
5.
A
managing
entity
shall
not
charge
a
fee
or
share
in
24
the
proceeds
of
the
transfer
of
an
interest
from
an
owner
to
a
25
subsequent
purchaser.
26
6.
a.
A
violation
of
this
chapter
constitutes
an
unlawful
27
practice
under
section
714.16
and
chapter
714H.
28
b.
A
court
that
finds
a
violation
of
this
chapter
may
enjoin
29
a
managing
entity
or
a
person
affiliated
with
the
managing
30
entity
from
taking
any
action
in
furtherance
of
development
of,
31
or
construction
on,
residential
property
used
in
a
residential
32
arrangement
subject
to
a
civil
action
under
this
section,
33
including
the
following:
34
(1)
Seeking
to
become
or
operating
as
a
public
utility
as
35
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defined
in
section
476.1.
1
(2)
Receiving,
directly
or
indirectly,
any
public
moneys
or
2
benefit.
3
Sec.
4.
Section
714.16,
subsection
2,
Code
2026,
is
amended
4
by
adding
the
following
new
paragraph:
5
NEW
PARAGRAPH
.
t.
It
is
an
unlawful
practice
for
a
person
6
to
violate
chapter
558C.
7
Sec.
5.
Section
714H.3,
subsection
2,
Code
2026,
is
amended
8
by
adding
the
following
new
paragraph:
9
NEW
PARAGRAPH
.
0g.
Chapter
558C.
10
Sec.
6.
EFFECTIVE
DATE.
This
Act,
being
deemed
of
immediate
11
importance,
takes
effect
upon
enactment.
12
EXPLANATION
13
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
14
the
explanation’s
substance
by
the
members
of
the
general
assembly.
15
This
bill
regulates
certain
business
entity-owned
16
residential
arrangements.
17
The
bill
defines
“business
entity”,
“managing
entity”,
18
“residential
arrangement”,
and
“residential
property”.
19
The
bill
requires
that
an
agreement
for
the
purchase
of
an
20
interest
in
a
managing
entity
must
disclose
to
the
purchaser
21
that
the
agreement
is
for
the
purchase
of
an
interest
in
the
22
entity
and
not
for
the
purchase
of
any
residential
property.
23
The
bill
prohibits
a
purchase
agreement,
operating
24
agreement,
bylaws,
rules,
or
other
governing
document
relating
25
to
a
residential
arrangement
or
ownership
interest
from
26
requiring
that
disputes
be
resolved
in
a
forum
other
than
a
27
court
established
under
the
laws
of
this
state
or
the
United
28
States.
29
The
bill
requires
that
a
managing
entity
not
take
action
30
relating
to
an
ownership
interest
in
a
manner
that
would
31
violate
Code
chapter
216
(Iowa
civil
rights
Act)
if
the
32
interest
is
an
interest
in
real
property.
Prohibited
actions
33
include
restricting
or
prohibiting
the
transfer
of
an
interest,
34
imposing
discriminatory
conditions
to
retain
or
maintain
an
35
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2698
interest,
or
refusing
to
grant
an
interest
to
an
otherwise
1
qualified
person.
2
The
bill
provides
that,
notwithstanding
any
agreement
to
the
3
contrary,
an
owner
may
transfer
the
ownership
interest
without
4
approval
by
the
managing
entity.
5
The
bill
prohibits
a
managing
entity
from
charging
a
fee
6
or
sharing
in
the
proceeds
of
the
transfer
of
an
ownership
7
interest
from
an
owner
to
a
subsequent
purchaser.
8
The
bill
provides
that
a
violation
of
the
bill
constitutes
9
an
unlawful
practice
under
Code
section
714.16
(consumer
fraud
10
Act)
and
Code
chapter
714H
(consumer
fraud
——
private
actions).
11
Several
types
of
remedies
are
available
if
a
court
finds
that
a
12
person
has
committed
an
unlawful
practice
under
Code
section
13
714.16,
including
injunctive
relief,
disgorgement
of
moneys
14
or
property,
and
civil
penalties
not
to
exceed
$40,000
per
15
violation.
In
an
action
under
Code
chapter
714H,
a
court
may
16
order
equitable
relief,
including
reasonable
attorney
fees
17
and
injunctive
relief.
If
the
violation
constitutes
willful
18
and
wanton
disregard
for
the
rights
and
safety
of
another,
in
19
addition
to
an
award
of
actual
damages,
statutory
damages
up
20
to
three
times
the
amount
of
actual
damages
may
be
awarded
to
21
the
prevailing
consumer.
A
court
that
finds
a
violation
of
the
22
bill
may
enjoin
a
managing
entity
or
a
person
affiliated
with
23
the
managing
entity
from
further
developing
or
constructing
24
residential
property
used
in
a
residential
arrangement
subject
25
to
a
civil
action
under
the
bill,
including
seeking
to
become
26
or
operating
as
a
public
utility,
or
receiving
any
public
27
moneys
or
benefit
directly
or
indirectly.
28
Current
law
exempts
certain
entities
from
prohibited
29
unfair
or
discriminatory
practices
related
to
housing,
30
including
certain
religious
institutions.
The
bill
creates
31
an
exception
to
the
religious
exemption,
providing
that
32
the
sale,
rental,
or
occupancy
of
a
dwelling
that
is
a
33
single-family
house,
duplex,
triplex,
or
quadruplex
located
34
on
a
subdivided
lot
with
a
parcel
of
land
25
acres
or
more
35
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2698
that
is
owned
by
a
religious
organization,
association,
or
1
society,
or
a
nonprofit
institution
or
organization
operated,
2
supervised,
or
controlled
by
or
in
conjunction
with
a
religious
3
organization,
association,
or
society
is
subject
to
the
unfair
4
or
discriminatory
practices
prohibited
by
law.
5
The
bill
takes
effect
upon
enactment.
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