Iowa law permits the collection of security deposits. Landlords are not allowed to request more than two months’ rent as a deposit. Once tenants move out of the unit the landlord has 30 days to return the deposit or send a notice of withholding to pay for damages.

Paying security deposits can be an expensive part of moving. Once paid, though, it is important to remember that the deposit is still your money and to understand the laws around its holding and withholding your money.

These laws vary from state to state, adding to the potential for confusion. To help you get a clear understanding of security deposit laws, the insurance broker app

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has compiled a summary of security deposit laws in every state. Fortunately, Iowa's security deposit laws are pretty straightforward. Let's get into it.

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What is Iowa’s law on security deposits?

In Iowa, landlords are legally allowed to collect security deposits. Security deposits allow landlords to have a security net for any damages or lost payments during the course of a tenancy agreement.

Landlords are not required to send a notice of the receipt of a security deposit.

Landlords are allowed to store the security deposit in an interest-bearing account. Any interest that is earned on the deposit in the first five years is kept by the landlord.

Section 562A.12 of Iowa’s legal code

contains all of the legal requirements around rental deposits.

What is the maximum security deposit a landlord can charge in Iowa?

The maximum deposit a landlord can collect in Iowa is the equivalent of two months’ rent.

How long does a landlord have to return a security deposit in Iowa?

Once a tenant moves out of the unit, the landlord has 30 days to either return the deposit or send a written notice of any reason for withholding part or all of the deposit. If the landlord does not return the deposit or give notice of withholding within 30 days, then they forfeit the right to withhold any of the deposit.

As well, tenants have one year to provide landlords with their new mailing address or another agreed-upon method of returning the money. If this is not communicated within one year, then the tenant is deemed to have forfeited their right to the deposit.

What can a landlord withhold a security deposit for in Iowa?

In Iowa, landlords are legally allowed to withhold or deduct security deposits for the following reasons:

Any payments required to return the unit to the condition it was in at the start of the tenancy, with the exception of ordinary wear and tear

To cover any unpaid rent or utilities

To cover any costs accrued by having to re-lease the unit if the tenancy is improperly terminated

Replacing any damaged or stolen items from the unit

What constitutes “ordinary wear and tear” is a bit of a gray area. Wear and tear of things like appliances is expected, but some things like damage from pets, holes in walls, and broken furniture are common reasons for withholding deposits.

If the damages caused by the tenant exceed the security deposit, the landlord can sue the tenant for the additional costs.

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How to get your security deposit back in Iowa

The first step to getting your deposit back is to simply wait and contact your landlord. It is possible that they are getting to it, or that there was a miscommunication of some sort. It is also important to make sure that they have written confirmation of your new address, so they don’t risk forfeiting your claim to the deposit.

If your landlord is refusing to return your deposit, or if you disagree with their reason for withholding the deposit, then you can take them to small claims court. In Iowa, the penalty for a landlord unlawfully withholding a security deposit is $200 plus the money owed and sometimes legal fees should the court side with the tenant.

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FAQs

Can I use my security deposit as the last month’s rent in Iowa?

Only if both parties agree to it. Otherwise, last month's rent will have to be paid separately. If there is an agreement to use the security deposit as the last month’s rent, it is a good idea to put that agreement down in writing.

Is there a walkthrough requirement in Iowa?

No, there are no laws requiring landlords to do a walkthrough. If a landlord or tenant requests a walkthrough, though, there are no laws prohibiting it either.

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