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Iowa Rent-to-Own (Lease Option) Agreement

An Iowa rent-to-own agreement is an arrangement that a property owner and a tenant/buyer enter into whereby the tenant rents the owner’s property for a set period of time with the option to buy it during a period called the “option term.”’ This type of real estate contract allows the tenant to improve their financial standing while occupying the property as a tenant with the goal of making a down payment and securing a mortgage to purchase the residence.

To secure the right to purchase, the tenant may be charged a non-refundable “option fee” and a higher rate for rent. If the tenant fails to buy the residence within the assigned period, the landlord can keep any funds that the tenant invested during the term of their lease.

Rental Laws Title XIV, Chapter 562A (Uniform Residential Landlord and Tenant Law)

Purchase Agreement Laws Title XIV, Chapter 558 (Conveyances) and Chapter 558A (Real Estate Disclosures)


Disclosures (4)

  1. CERCLIS
  2. Identification
  3. Lead-Based Paint
  4. Shared Utilities

1) CERCLIS Disclosure

If a rental property is listed in the CERCLIS database (Comprehensive Environmental Response Compensation and Liability Information System), the tenant must be informed by the landlord in the lease agreement.

2) Identification

The landlord must identify any individuals who are authorized to act on their behalf and provide an address where notices are received.

3) Lead-Based Paint Disclosure

If the property was built before 1978, the landlord must disclose the presence of lead-based paint to the tenant.

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4) Shared Utilities

Any shared utility charges must be disclosed to the tenant.


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