Iowa Security Deposit Law

Maximum deposit

Landlords may not demand or receive a security deposit greater than two months' rent (Iowa Code § 562A.12(1)). (Iowa Code § 562A.12(1))

Two months' rent

Return deadline

Landlords must return the deposit or send a written statement of reasons for withholding within 30 days after the tenancy ends and they receive the tenant's mailing address or delivery instructions (Iowa Code § 562A.12(3)(a)). (Iowa Code § 562A.12(3)(a))

Itemized statement of deductions

A landlord withholding any of the deposit must give a written statement of the specific reasons, and for repairs must specify the nature of the damage (Iowa Code § 562A.12(3)(a)). (Iowa Code § 562A.12(3)(a))

Interest on the deposit

Landlords need not pay interest earned during the first five years of a tenancy, which belongs to the landlord, but must keep deposits in a federally insured account separate from personal funds (Iowa Code § 562A.12(2)). (Iowa Code § 562A.12(2))

Deposits may be held in an interest-bearing trust account; interest earned during the first five years of a tenancy belongs to the landlord. Deposits must be held in a federally insured bank, savings and loan or credit union and not commingled with personal funds.

Penalty for wrongful withholding

A landlord who misses the 30-day statement forfeits the right to withhold any of the deposit, and bad-faith retention exposes the landlord to punitive damages of up to twice the monthly rent plus actual damages (Iowa Code § 562A.12(4), (7)). (Iowa Code § 562A.12(4), (7), (8))

Where the deposit is held

Iowa landlords must hold rental deposits in a federally insured bank, savings and loan or credit union and may not mix them with their personal funds (Iowa Code § 562A.12(2)). (Iowa Code § 562A.12(2))

A common, interest-bearing trust account is allowed, and interest earned in the first five years of a tenancy belongs to the landlord. Bad-faith retention can bring punitive damages up to twice the monthly rent.

Receipt or written notice of the deposit

Iowa does not require a receipt for a rental deposit or a notice naming the bank where it is held; the only deposit notice is the transfer notice owed when the landlord's interest ends (Iowa Code § 562A.12(5)). (Iowa Code § 562A.12 (no receipt requirement))

Move-in condition checklist

Iowa's deposit law has no move-in checklist requirement, but in any deposit dispute the landlord carries the burden of proving each deduction by a preponderance of the evidence (Iowa Code § 562A.12(3)(b)). (Iowa Code § 562A.12 (no move-in inspection requirement), Iowa Code ch. 562A)

Pet deposits

Iowa sets no separate rule or cap for pet deposits, so any pet deposit counts toward the general two-month limit on rental deposits (Iowa Code § 562A.12(1)). (Iowa Code § 562A.12(1), Iowa Code § 216.8B)

Nonrefundable fees

Iowa's landlord-tenant law neither bans nor regulates nonrefundable move-in fees; it caps only refundable rental deposits at two months' rent (Iowa Code §§ 562A.6, 562A.12). (Iowa Code § 562A.12, Iowa Code ch. 562A (definitions, § 562A.6))

Small-landlord exemptions

Iowa's deposit rules apply to every residential landlord under chapter 562A, with no carve-out for small or owner-occupied rentals (Iowa Code § 562A.5). (Iowa Code § 562A.5, Iowa Code § 562A.12)

Deposit alternatives and installments

No Iowa statute addresses surety bonds, deposit insurance or installment payment of rental deposits (Iowa Code § 562A.12, silent). (Iowa Code § 562A.12 (silent on alternatives))