ARC 9252C - Iowa Administrative Rules

Adopted and Filed

Wholesaling of residential property, ch 22

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ARC 9252C

REAL ESTATE COMMISSION[193E]

Adopted and Filed

Rulemaking related to wholesaling of residential property

The Real Estate Commission hereby adopts a new Chapter 22, “Wholesaling of Residential Property,” Iowa Administrative Code.

Legal Authority for Rulemaking

This rulemaking is adopted under the authority provided in Iowa Code chapter 17A and section 543B.18.

State or Federal Law Implemented

This rulemaking implements, in whole or in part, Iowa Code chapters 17A and 543B.

Purpose and Summary

This rulemaking complies with 2024 Iowa Acts, House File 2394, and provides guidance to licensees regarding wholesaling requirements.

Public Comment and Changes to Rulemaking

Notice of Intended Action for this rulemaking was published in the Iowa Administrative Bulletin on February 19, 2025, as ARC 8861C. A public hearing was held on the following date(s):

●March 11, 2025

No public comments were received. No changes from the Notice have been made.

Adoption of Rulemaking

This rulemaking was adopted by the Commission on April 3, 2025.

Fiscal Impact

This rulemaking has no fiscal impact to the State of Iowa.

Jobs Impact

After analysis and review of this rulemaking, no impact on jobs has been found.

Waivers

Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Commission for a waiver of the discretionary provisions, if any, pursuant to 481—Chapter 6.

Review by Administrative Rules Review Committee

The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).

Effective Date

This rulemaking will become effective on June 18, 2025.

The following rulemaking action is adopted:

ITEM 1.Adopt the following new193E—Chapter 22:

CHAPTER 22

WHOLESALING OF RESIDENTIAL PROPERTY

193E—22.1(543B) Real estate wholesaling. A licensed real estate broker may engage in residential real estate wholesaling or represent a nonlicensed wholesaler in a residential real estate transaction provided proper disclosure is made under the guidelines in Iowa Code section 543B.6A.

193E—22.2(543B) Disclosure of wholesaling. A real estate wholesaler shall provide disclosure to all parties to the residential real estate wholesaling transaction prior to executing a contract to purchase or conveying an equitable interest to another party, including but not limited to the following:

22.2(1) The legal identities of all parties to the transaction, including the current titleholder for the residential property, the wholesaler, the purchaser of the equitable interest, and any real estate licensee who represents a party in the transaction.

22.2(2) An explanation of the wholesaling process, including but not limited to the following:

a.A wholesaler holds an equitable interest in the property, not legal title.

b.A wholesaler is selling its equitable interest in the property to another party.

c.A wholesaler may earn a profit from the sale of its equitable interest in the property.

22.2(3) Wholesaling disclosure: “This transaction constitutes real estate wholesaling, meaning the wholesaler holds only an equitable interest in the property and may not be able to convey title.”

193E—22.3(543B) Penalties. Residential real estate wholesalers who do not comply with the required disclosures or licensing requirements shall be subject to a civil fine of up to $10,000 or 10 percent of the sale price for each transaction in violation of Iowa Code section 543B.6A, and the seller or buyer may cancel the contract at any time prior to closing without penalty and retain any earnest money paid by the wholesaler. Civil penalties shall be enforced at the discretion of the real estate commission.

These rules are intended to implement Iowa Code section 543B.6A.

[Filed 4/15/25, effective 6/18/25]

[Published 5/14/25]

EDITOR’S NOTE: For replacement pages for IAC, see IAC Supplement 5/14/25.