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
2. Sale and Purchase 2.1 Categories of Property Rights
“There is no known private burial site, well, solid waste disposal site, underground storage tank, hazardous waste, or private sewage disposal system on the prop - erty as described in Iowa Code section 558.69, and therefore the transaction is exempt from the require - ment to submit a groundwater hazard statement.” Pursuant to Iowa’s marketable title statute, addition - al instruments may serve as muniments of title. For example, a properly admitted last will and testament of a decedent who was the vested titleholder of real estate may serve as a muniment of title. Additionally, a properly drafted divorce decree may serve as a muni - ment of title. The sale of title insurance is prohibited in Iowa. Thus, although out-of-state title insurance companies may write title insurance policies on Iowa land, and the State of Iowa offers the equivalent of a title insurance policy through its Iowa Title Guaranty division, most Iowa real estate transactions involve the issuance of an attorney’s title opinion based on examination of an abstract of title. Additionally, transactions are typi - cally closed through an attorney’s office or an escrow company, and not a title insurance company. Nearly all documents must be notarised to be record - able in Iowa. The Iowa Uniform Law on Notarial Acts allows electronic notarisation of recordable docu - ments. 2.4 Real Estate Due Diligence The nature and manner of due diligence performed by buyers of real estate is largely dependent on the nature of the transaction. In residential transactions, subject to certain exceptions, sellers must disclose defects related to the property as mandated by the Iowa Code. The disclosure statement must be deliv - ered prior to making or accepting a written offer for the transfer of the real property, and must include informa - tion relating to the condition and important charac - teristics of the property and structures located on the property, including significant defects in the structural integrity of the improvements. Certified Inspectors Generally, properties that include a private sew - age disposal system (ie, a septic system) must be
Iowa law is consistent with common law principles of property rights as a “bundle of sticks”, meaning that a wide range of real property interests may be acquired and held. These include fee simple ownership, lease - hold rights, easement rights and other traditional com - mon law forms of full or partial real property interests. 2.2 Laws Applicable to Transfer of Title Basic common law and statutory recording laws apply to all transfers of Iowa real estate, without regard to the use or other classification of the particular real estate involved. 2.3 Effecting Lawful and Proper Transfer of Title Iowa is a notice state. Lawful and proper transfer of title to real estate is effectuated primarily through the execution and recordation of deeds. Subject to cer - tain exceptions, a deed conveying title to real estate will only be recorded by the local county recorder’s office if accompanied by a declaration of value set - ting forth the consideration paid for the real estate, together with a groundwater hazard statement setting forth certain known hazards related to the property or a statement on the deed explicitly stating that there are no groundwater hazards. The matters covered by a groundwater hazard statement are: • whether any known private burial site is situated on the property; • whether any known wells are situated on the prop - erty; • whether any known disposal site for solid waste which has been deemed to be potentially hazard - ous by the department of natural resources exists on the property; • whether any known underground storage tank sub - section exists on the property; • whether any known hazardous waste exists on the property; and • whether any known private sewage disposal sys - tem exists on the property. The following language must be included on a deed when no groundwater hazard statement is required:
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