2.2 Iowa Disclosure Requirements

Brokerage-Relationship Disclosure (193E Chapter 12)

Before a consumer signs a brokerage agreement — and in any event before confidential information is exchanged — an Iowa licensee must disclose in writing the type or types of brokerage relationships the broker and affiliated licensees offer. This is the agency-disclosure obligation under Administrative Code 193E, Chapter 12.

Timing in practice:

What "Substantive Contact" Means

Substantive contact is the point where conversation goes beyond neutral facts (address, list price, square footage) into:

• the consumer's motivation to buy or sell;
• their financial qualifications or maximum budget;
• negotiation strategy or personal circumstances.

Best Practice: Deliver the disclosure early. Iowa requires no magic words, but the consumer must understand which party the licensee represents before sharing anything confidential.

Dual-Agency Consent

If the transaction may become disclosed dual agency, a separate dual agency consent disclosure must be presented to the seller/landlord before they sign or accept an offer, and informed written consent must be obtained from all parties first.

Personal-Interest Disclosure

A licensee buying or selling on their own account, or with a family/financial interest, must disclose that interest in writing to all parties.

Key Rule: Personal-interest disclosure is owed to all parties, not just the client. A licensee selling their own home must say so in writing to every buyer, regardless of which side has hired them.

Distinguishing the Two Major Disclosures

State-exam questions frequently test the difference between the agency disclosure (who the licensee represents) and the property condition disclosure (the seller's report on the home). They are separate documents with separate timing and separate authors.

Seller Property Condition Disclosure — Iowa Code Chapter 558A

Iowa Code Chapter 558A requires the seller of residential property of one to four dwelling units to complete and deliver a Residential Property Condition Disclosure Statement to the buyer.

The Late-Delivery Withdrawal Window

If the seller delivers the statement late, the buyer may withdraw the offer or revoke acceptance without liability:

Trap: The withdrawal clock runs from delivery of the disclosure, not from the offer date. The two day-counts (3 personal / 5 mail-or-electronic) are a favorite state-exam detail.

Exempt Transfers Under 558A

The disclosure is not required for certain transfers:

• Sales by a court-appointed fiduciary — executor, administrator, or trustee.
• New construction that has never been occupied (builder warranties apply instead).
• Transfers ordered by a court or made through foreclosure.

Material-Fact Disclosure (Agent's Duty)

Separate from the seller's 558A form, the licensee must disclose known material facts about the property's condition that are not reasonably ascertainable by the buyer.

Federal Lead-Based Paint Disclosure

For housing built before 1978, the federal Residential Lead-Based Paint Hazard Reduction Act (Title X) overlays Iowa law:

Federal Law: Lead-paint disclosure applies regardless of any state-law exemption. A 558A exemption does not excuse the federal lead-paint obligation on pre-1978 housing.

Consequences of Non-Disclosure

Worked scenario: A seller's agent learns the basement floods every spring but tells a buyer-customer the home is "dry." Even though the buyer is only a customer, the agent owed honesty and known-material-fact disclosure to all parties. The concealment exposes the agent to civil liability and IREC discipline, and it does not matter that the seller forgot to note it on the 558A form — the agent's own knowledge triggers the duty.

Exam Tip: The seller's 558A statement and the agent's material-fact duty are independent. A blank or "unknown" answer on the seller's form does not relieve a licensee who personally knows of a defect from disclosing it to the buyer.