USA – IOWA Law and Practice Contributed by: David M. Erickson, Christopher S. Talcott, Amy S. Montgomery and Shannon M.H. Hasse, Dentons Davis Brown PC
Dentons Davis Brown PC 215 10th Street Suite 1300 Des Moines IA 50309 USA Tel: +1 515 288 2500 Fax: +1 515 243 0654 Email: christopher.talcott@dentons.com Web: www.dentons.com/Iowa
1. General 1.1 Main Sources of Law
can be expected to reduce the likelihood of develop - ers receiving direct financial incentives for new data centres. Higher interest rates have reduced the volume of resi - dential real estate transactions and led to an increase in the use of seller financing in commercial real estate transactions, such as assumption of existing loans, subordinated seller promissory notes for a portion of the purchase price, and outright instalment sales. Typically, these are intended as short-term financing mechanisms with an expectation that the buyer will refinance the full purchase price within two to three years in an improved interest rate environment. 1.3 Proposals for Reform After the failure to adopt property tax reform during the 2025 legislative session, both chambers of the legislature as well as the Governor’s office identi - fied property tax reform as a top priority of the 2026 legislative session. As of this writing, competing bills remained pending with starkly different approaches. Regardless of which bill is adopted, it is expected to heighten budget pressures faced by local govern - ments with new limits on property tax increases. It is also expected that general state and local devel - opment incentives previously enjoyed by large land developers (particularly data centre developers) will be significantly more limited in the near term, and that local governments will seek to impose higher use fees to make up for lost property tax revenues.
Iowa real estate law mainly consists of a mixture of common law and state statute. Certain specialised areas, such as environmental, lending and brokerage laws, are subject to federal law or state agency regu - lations. 1.2 Main Market Trends and Deals Iowa continues to see strong interest in the devel - opment and expansion of data centres and renew - able energy, including wind and solar projects. This is despite the prevalence of increasingly organised resistance at the local level for necessary permits and approvals, typically from non-participating land - owners in the vicinity of a project. Legal challenges to approved projects have been largely unsuccessful on the merits, but nevertheless result in delays and increased costs to the projects. Adoption of local moratorium ordinances or highly restrictive ordinanc - es have been more successful in stopping specific projects before approval. Data centre development companies have continued to show interest in the state. Key drivers of the devel - opments appear to be reliable access to water and energy resources, as well as local commitments to infrastructure development. The potential for property tax reform at the state level (which as of this writing had not yet been finalised by the legislature), and its anticipated effect on local government budgets, cou - pled with increased public scrutiny of the effects of such developments on energy and water resources,
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