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
local governing body that are deemed “jurisdictional” may generally be challenged at any time by a declara - tory judgment action. Development Agreements While it is not generally required to enter into agree - ments with local authorities or utility suppliers to facili - tate a development project in Iowa, for larger-scale commercial developments it is a common practice. This may begin with engaging in pre-application meetings with local government planning, zoning and economic development staff to discuss the proposed development in light of building, zoning, subdivision and site plan approvals, as well as potential eco - nomic development incentives that may be available, such as tax increment financing or tax abatement programmes. The developer and the local govern - ing body will often enter into a development agree - ment requiring the developer to commit to threshold value improvements on the property or construction of public infrastructure improvements in exchange for or contingent on desired zoning, subdivision and site plan approvals or receipt of economic incentive packages. Enforcement Local governments are able to enforce development and use restrictions under their general zoning and other police powers. In addition, when developers have entered into development agreements, restric - tive covenants or other voluntary agreements with the local governing body or with neighbouring landown - ers, such agreements are binding on future owners or other interest holders when recorded and generally enforceable under property and contract law. 5. Investment Vehicles 5.1 Types of Entities Available to Investors to Hold Real Estate Assets The following entities may be formed under Iowa law by investors, and all are empowered to own and oper -
• limited liability limited partnerships; • limited liability companies; and • business corporations.
Limited liability companies are the most common vehicle to hold real estate investments in Iowa, giv - en the combination of tax benefits and the flexibility available under statute in designing the investment/ ownership and management structures of the entity. Entities formed under the laws of other states may own real estate assets in Iowa, but investors should take care to evaluate requirements to obtain a certifi - cate of authority to do business in Iowa for the for - eign entity depending on the nature of activities being undertaken. Investors seeking to acquire agricultural land in Iowa must be mindful of the restrictions of Iowa Code Chapter 9H. This chapter restricts the authority of most entity forms to own and operate Iowa agricul - tural land, subject to prescribed exceptions for family entities, small entities and acquisitions of land for non- agricultural purposes. The details of Chapter 9H must be evaluated on a case-by-case basis whenever an entity seeks to acquire an interest in Iowa agricultural land. In addition, the similar restrictions of Iowa Code Chapter 9I must be evaluated where a non-resident alien seeks to acquire an interest in an entity owning Iowa agricultural land. Finally, entities restricted under both Chapters 9H and 9I must comply with certain public reporting require - ments under Iowa Code Chapter 10B and Section 558.44 with respect to interests in Iowa agricultural land. 5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity The main features of the constitution and governance of entities created under Iowa law are similar to what will be found in other states. General Partnership A general partnership is an exception to the general rule that a filing with the Iowa Secretary of State is required to create the legal existence of the entity. Rather, a general partnership is created by the asso - ciation of two or more persons to carry on, as co-own -
ate real estate assets: • general partnerships; • limited partnerships; • limited liability partnerships;
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