Trust Accounts
Four items, split between Iowa Code section 543B.46 and rule 481-Chapter 2013. Iowa's distinctive features are the interest-bearing requirement with interest going to the state, the five-banking-day deposit deadline measured from the last signature of acceptance, and a detailed disputed-deposit procedure.
The Account and the Deposit Deadline
A broker who is in the practice of depositing funds in a trust account maintains a common trust account at a federally insured depository institution with the word "trust" in the name, and files a Consent to Examine and Audit Trust Account form with the commission for each account; a broker who is not in that practice files an affidavit instead and must open an account immediately if trust funds are later received. All earnest payments, rents collected, property management funds and other funds belonging to others are trust funds. Rule 481-2013.1(1)"a" requires deposit "no later than five banking days after the date indicated on the document that the last signature of acceptance of the offer to purchase, rent, lease, exchange, or option is obtained unless otherwise specified in the contract." Section 543B.46(4) bars commingling, with one exception: up to $1,000 of the broker's personal funds, specifically identified, to cover bank service charges - and a shortfall in that cushion must be corrected within 15 calendar days of the closing date of the bank statement.
Interest, Records and Reconciliation
Section 543B.46(1) requires the account to be interest-bearing and the interest to be transferred quarterly to the treasurer of state and on to the Iowa finance authority for the housing trust fund created in section 16.181, unless there is a written agreement between the buyer and seller to the contrary; the broker shall not benefit from interest on the funds of others. Rule 481-2013.1(2) lets the remittance be net of service charges attributable to maintaining the interest-bearing account. The broker keeps a journal recording all receipts and disbursements chronologically, individual ledger accounts identified by property or principal for sales transactions, and per-tenant ledgers for property management, plus supporting documents including bank statements, canceled checks, contracts, closing statements and correspondence. The journal must provide a means for monthly reconciliation on a written worksheet of the general ledger balance with the bank balance and with the individual ledger accounts. Records are kept at least five years (rules 481-2013.2(2) and 481-2013.5).
Disputes, Disbursement and Closings
No funds leave the trust account before closing without the informed written consent of all parties. Where the return or forfeiture of a deposit is disputed, rule 481-2013.1(7) requires the broker to keep holding it until a written release from all parties, a final court judgment, a final binding alternative dispute resolution or mediation decision, or the filing of a civil action. Rule 481-2013.1(8) adds a good-faith safe harbor: after 30 days from the dispute the broker may disburse to a buyer, renter or lessee on a good-faith conclusion that a contingency was not met, and after six months to a seller or landlord on a good-faith conclusion that the buyer failed to perform - in either case only after 30 days' written notice by certified mail to all parties setting out the proposed action and its grounds. Rule 481-2013.1(10) permits interpleader. Rule 481-2013.1(9) is absolute: the broker may never withhold any portion of the earnest money when a transaction fails to consummate, even if a commission was earned. At closing the broker delivers detailed receipt-and-disbursement statements to both seller and buyer; the listing broker is responsible for the closing, and a salesperson cannot handle a closing except under the direct supervision or with the consent of the employing broker.
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State-specific details
State exam facts
- State regulator
- Iowa Real Estate Commission (DIAL)
- Exam vendor
- PSI
- Scored questions
- 115
- Time limit
- 180 minutes
Who regulates real estate brokers in Iowa?
The Iowa Real Estate Commission, now within the Department of Inspections, Appeals, and Licensing (DIAL), licenses brokers and salespersons. The Commission contracts with PSI to deliver the exams.
What experience do I need before the Iowa broker exam?
Iowa Code § 543B.15(7) requires 24 months as a licensed salesperson actively engaged in real estate (or substantially equal experience) plus 60 contact hours of Commission-approved broker education completed within the 24 months before the broker exam — on top of the salesperson pre-license course.
How is the Iowa broker exam structured?
PSI bulletin 120 sets the broker exam at 115 scored questions in 180 minutes: a 75-question national portion scored to 80 points (pass 60 points, 120 minutes) and a 40-question Iowa portion worth 40 points (pass 30, 60 minutes). Both portions must be passed. The national portion is scored by points because some national broker items are worth two points.
Sources: https://dial.iowa.gov/licenses/other-professional-licensure/real-estate-licensees, https://test-takers.psiexams.com/api/content/bulletin/120
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