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
6.18 Right to Assign a Leasehold Interest A tenant is freely permitted to sublet or assign a lease unless prohibited by the terms of the lease. Where landlord consent is required, the law may impose a requirement that the landlord’s consent not be unrea - sonably withheld. Typical conditions include the finan - cial viability of the tenant, compatibility of the pro - posed use, and the original tenant remaining jointly liable with the assignee for performance of the ten - ant’s lease obligations. 6.19 Right to Terminate a Lease Commonly, the events of default that trigger the land - lord’s right to terminate the lease will be numerous. Essentially, the failure of the tenant to comply with any obligation under the lease may give rise to termina - tion. Importantly, however, the type of default will likely determine how the landlord is required to proceed. In a residential lease, the statute dictates what notices must be provided, how they must be provided, when they must be provided and how long the tenant has to cure a breach. Even in the commercial lease setting, there will most likely be different cure periods depend - ing on the breach. For example, it is fairly common for a default in the payment of rent to contain a ten-day cure period, while the breach of any other obligation will afford the tenant 30 days to cure the default. 6.20 Registration Requirements Any lease for a term of one year or more must be memorialised in writing signed by landlord and ten - ant. Leases of Iowa real estate are not required to be notarised or recorded, and bona fide purchasers are placed on inquiry notice of the rights of any tenant in possession of the real estate. However, it is common in long-term leases or leases containing an option to purchase the leased premises to record a memoran - dum of the lease to ensure that third parties are bound by constructive notice of the lease. Nominal recording fees are charged for recording the memorandum, and are typically charged to the tenant. 6.21 Forced Eviction Tenants in any type of lease may be forcefully evicted if they default in the performance of their lease obliga - tions. For commercial leases, the procedure, types of notices, and timing are governed almost exclusively
by the lease terms. In the residential lease context, there is a very precise set of notices, with specific language, and for which care must be given to the timing and method of service. In either the commercial or residential lease context, the procedure will involve a notice served or sent to the tenant apprising them of the breach and provid - ing a set period during which the tenant may cure the breach. If the breach is not cured, the landlord may file a civil action for eviction under an Iowa statute which provides for expedited proceedings for evictions. In an ordinary eviction of a residential lessee for non- payment of rent, the tenant may be evicted from the property in as little as two weeks. It is important to note that a landlord may be divested of its right to avail itself of these expedited proceed - ings, if it fails to act within 30 days of the date the cause of action accrued. The exact steps that must be taken in either a commercial lease or a residential lease are beyond the scope of this document, and practitioners must make diligent enquiry as to the vari - ous statutes at issue. 6.22 Termination by a Third Party Generally, a lease may be terminated by a third party (ie, a person not a party to the lease) only in circum - stances involving condemnation or eminent domain. In Iowa, the compensation due to a landlord or ten - ant is determined based on their respective property interests. Damages for condemnation of a leasehold interest are generally measured by the value of the remainder of the lease term in excess of the rent to be paid. Unlike valuation of an interest in fee simple, lost business profits may be taken into consideration in determining the value of a leasehold interest. 6.23 Remedies/Damages for Breach The Iowa Uniform Residential Landlord and Tenant Act imposes limitations on the nature of damages that a landlord may claim, generally limiting recovery to actual damages and also subject to the landlord’s duty to mitigate damages. Recovery of damages in the commercial leasing context is generally consist - ent with contract law principles, subject to the land - lord’s duty to mitigate damages. Security deposits in residential leases are tightly regulated by statute,
814 CHAMBERS.COM
Powered by FlippingBook