Iowa Real Estate Broker Exam — All Questions

Before an Iowa licensee may show, list, or negotiate the rental of a property, the licensee's broker must hold:

• a.A current written property management agreement signed by the owner✓
• b.A current property manager registration issued by the state of Iowa
• c.A recorded management agreement filed in the county where the property sits
• d.A verbal authorization from the owner confirmed by email to the tenant

Rule 481-2015.1 bars a licensee from renting or leasing real estate, offering or negotiating a rental, listing property for rent, or showing property to prospective renters "unless the licensee's broker holds a current written property management agreement or other written authorization signed by the owner of the real estate or the owner's authorized agent." The authorization must be written and signed, so a verbal instruction confirmed to the tenant does not satisfy it. Nothing is recorded in the county, and Iowa has no separate property manager registration - property management is licensed activity under chapter 543B itself, because section 543B.3(6) reaches anyone who collects or agrees to collect rent for the use of real estate. Rule 481-2015.1(1) lists what the agreement must contain: identification of the property, the terms and the powers given to the broker, when income is remitted and when written statements of income and expenses are provided, which expenses the broker pays to third parties, the fee and when it is paid, the deposits and prepaid rents held, the effective date, the termination terms, and the signatures of broker and owner.

Under rule 481-2015.1, an Iowa broker's property management fees are:

• a.Deducted from each tenant's refundable deposit as the rent is collected
• b.Paid directly from the owner's trust account to the broker at year end
• c.Withheld from the interest that the trust account earns for the state
• d.Withdrawn at least monthly and deposited into the operating account✓

Rule 481-2015.1(7)"d" provides that management fees are withdrawn from the owner's account at least once a month unless the agreement provides otherwise, identified by the property name or account number for which they were earned, and deposited into the broker's business operating account - and then adds the sentence that decides this question: "fees are not paid directly from the owner's trust account to the broker." Waiting until year end fails both halves of the rule. Tenant money is not available for fees either: paragraph "e" requires conditionally refundable deposits to stay in a trust account until refunded or until they accrue to the owner under the tenant's agreement. Nor may a broker take the interest, since paragraph "g" sends it to the state under section 543B.46 absent a separate written agreement and says the property manager does not receive or benefit from it. Paragraph "c" also bars withdrawing more than the owner's remaining credit balance, and rule 481-2015.1(4) requires funds received for the owner to be deposited in trust within five banking days.

When an Iowa property management agreement terminates, the property manager must give the owner:

• a.Unobligated funds within 30 days and a final accounting within 60 days✓
• b.All of the tenant deposits within 10 days and an accounting on request
• c.Unobligated funds and a final accounting at the next annual statement
• d.A final accounting within 30 days and any funds due within 120 days

Rule 481-2015.1(5)"c" requires the property manager to provide the owner, not later than 30 days after the effective date of the termination, with any unobligated funds due under the agreement, and not later than 60 days after that date, a final accounting of the owner's ledger account, the amount of any obligated funds still held in the client trust account, a statement explaining why they are held, and a statement of when and to whom they will be disbursed. Reversing the two deadlines gets the order backwards - the money moves first and the accounting follows. Tenant deposits are not simply handed to the owner on a ten-day clock: paragraph "e" requires the manager to notify each tenant immediately that the conditionally refundable deposit is being transferred to the owner or to a new manager and to give that party's name and address. And the annual statement required by rule 481-2015.1(1)"c" is a running obligation during the agreement, not the deadline for winding it up. Unobligated funds may go only to the owner, or with the owner's written authorization to a new property manager the owner designates.