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Bill > SSB3133
IA SSB3133
IA SSB3133A bill for an act relating to the wholesaling of residential property by a wholesaler, and providing civil penalties.(See SF 2290.)
summary
Introduced
01/31/2024
01/31/2024
In Committee
01/31/2024
01/31/2024
Crossed Over
Passed
Dead
04/16/2024
04/16/2024
Introduced Session
90th General Assembly
Bill Summary
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. S.F. _____ 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 10 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.
AI Summary
This Study Bill establishes regulations for individuals who engage in wholesaling residential property, which involves entering into a contract to buy a home and then selling that contract to another buyer before the original purchase is finalized. The bill defines "residential property" as a home with one to four dwelling units, and a "wholesaler" as someone who holds a contractual right (an "equitable interest") to buy a property but not yet the legal ownership. To legally wholesale, a person must either be a licensed real estate broker or be represented by one. Crucially, wholesalers are required to provide written disclosures to all parties involved in a transaction before any contract is signed, explaining who everyone is, detailing the wholesaling process, and clarifying that the wholesaler only holds an equitable interest and might not be able to transfer full ownership. They must also share a copy of any agency agreement. If these disclosures are not made, either the seller or buyer can cancel the contract without penalty before the sale closes and keep any deposit made by the wholesaler. Violators face significant civil penalties, up to $10,000 or 10% of the property's sale price for each offense, and the real estate commission will create rules to enforce these provisions.
Committee Categories
Business and Industry
Sponsors (0)
No sponsors listed
Other Sponsors (1)
Commerce (Senate)
Last Action
Committee report approving bill, renumbered as SF 2290. (on 02/08/2024)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.legis.iowa.gov/legislation/BillBook?ga=90&ba=SSB3133 |
| BillText | https://www.legis.iowa.gov/docs/publications/LGI/90/attachments/SSB3133.html |
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