USA - IOWA Law and Practice Contributed by: David M Erickson, Robert J Douglas, Jr, Christopher S Talcott and Amy S Montgomery, Dentons Davis Brown
6.10 Payment of Utilities and Telecommunications
based, at least in part, upon retail sales. In some agricultural leases the rental escalators which are built in are derived through an annual cash rent survey, which is compiled and published by Iowa State University. 6.6 Determination of New Rent No taxes or governmental levy is payable on rent in Iowa, beyond state and federal income taxes. 6.8 Costs Payable by a Tenant at the Start of a Lease Generally, a tenant may be required to make payments to the landlord at the commencement of the lease in addition to the first month’s rent. In almost every case, the tenant will be required to pay a security deposit, which the landlord will hold in trust pending the tenant’s fulfilment of its obligations under the lease. Further, a ten - ant may be required to contribute some amount to capital improvements, although this practice varies greatly from lease to lease. In some cases, any capital improvements to the leased premises must be contracted for, carried by, and paid for by the tenant. In other cases, the landlord will undertake all capital improvements and figure the cost of such improvements as part of the rental to be charged. In certain other circumstances, the landlord may provide a build- out allowance, with any additional improvements to be paid for by the tenant. 6.9 Payment of Maintenance and Repair See 6.4 Typical Terms of a Lease . See 6.5 Rent Variation . 6.7 Payment of VAT
As with charges for maintenance and repairs to common areas of the rental property, charges for services, utilities, and telecommunications are most frequently paid indirectly by the ten - ant through the additional rent payments made as part of operating expenses. However, any services which are provided directly to the ten - ant, or which are capable of being separately metered, will most often be paid directly by the tenant to the service provider. Services which are not separately metered or not capable of segregation are generally covered by the oper - ating expenses owed by each tenant. 6.11 Insurance Issues As part of the operating expenses, the landlord will usually carry extended coverage insurance against loss, damage, or destruction by fire or other casualty, which will insure the building, most often for an amount not less than the full insurable value on a replacement cost basis. The tenant will ordinarily be required to carry casualty and liability insurance in given amounts depend - ing upon the tenancy, protecting the landlord against such things as harm to person or prop - erty. The tenant may also be required to insure their personal property within the leased prem - ises. 6.12 Restrictions on the Use of Real Estate A landlord is entitled to restrict the tenant to par - ticular types of use of the property. For example, the landlord may restrict the tenant to only oper - ating a retail business out of the rented space or may prohibit the tenant from operating certain types of businesses. In almost every lease, the landlord will expressly prohibit the tenant from carrying on any business practice which is a vio -
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