Increasing Inventory & Accountability: A Successful 2025 Legislative Session

Iowa REALTORS® is reflecting on a positive 2025 Iowa legislative session where we achieved several bipartisan policy wins with an emphasis on increasing housing supply and consumer protection measures. These legislative wins would not have been possible without our members from across the state advocating for the passage of these bills. Your advocacy truly made a difference in getting these bills across the finish line! Below we highlight the key bills that passed this session that impact the real estate industry and property rights:

SF 460: The Home Inspection Accountability Act
Iowa REALTORS’® priority legislation, Home Inspection Accountability Act (SF460), passed the Iowa Legislature on a unanimous bipartisan basis and was signed into law by Gov. Kim Reynolds. This legislation establishes comprehensive regulations for home inspections codifying qualifications for home inspectors, standards for inspection reports, and penalties for non-compliance, and is effective July 1, 2025.

SF460 sets forth guidelines for who can perform home inspections in Iowa including licensed architects, professional engineers, or members of a national home inspectors association. Additionally, home inspectors licensed or registered in other states are permitted to perform home inspections in Iowa.

The bill also contains several consumer protection provisions surrounding conflicts of interest and requires home inspectors to carry errors and omissions insurance.

To ensure thorough and transparent home inspection reports, this legislation stipulates what minimum provisions must be included in a home inspection report including a detailed scope of the inspection, descriptions of material defects and recommendations for further evaluation and disclaimers clarifying the limitations of the inspection and advising when to seek expert opinions.

Click here for a more in depth analysis of the Home Inspection Accountability Act.

SF 592: Accessory Dwelling Units
To address housing inventory and affordability issues across the state, Iowa REALTORS® joined a broad coalition led by AARP, to pass bipartisan legislation (SF592) to promote the construction of accessory dwelling units (ADUs) throughout our state. SF592 has been signed by Gov. Reynolds and takes effect on July 1, 2025. 

ADUs are additional residential dwelling units located on the same lot as a single-family residence that are either attached to or detached from the single-family residence. SF592 requires that cities and counties in Iowa must allow at least one ADU on the same lot as a single-family home. The ADU cannot exceed 1,000 square feet or 50% of the size of the primary residence, whichever is larger, and must adhere to applicable building regulations.

The legislation stipulates that local governments cannot impose restrictions on ADUs that are more restrictive than requirements for single family homes and that an ADU can be used as a rental property. Only state historic building code and deed restrictions, or HOA rules can limit or prohibit the construction or use of an ADU in Iowa following the passage of this legislation.

Click here for a more in depth analysis of SF592.

SF314: Real Estate Licensing and Brokerage Agreements
SF314 exempts commercial properties (more than four dwelling units), land, and auctions from the buyer agreement requirements in 543B and takes effect July 1, 2025. With the enactment of this legislation, real estate professionals engaging in these types of transactions are no longer required to use buyer agreements, however, they are still able to utilize buyer agreements in their business practices should they choose to do so.

The bill also allows individuals holding a real estate broker or salesperson license to specify when their new license should become effective, either immediately upon approval or upon the expiration of their current license providing additional choice for real estate practitioners in Iowa.

HF876: Lead Service Line Disclosure
Iowa REALTORS® worked closely with Des Moines Water Works to pass legislation that provides guidance for the implementation of a new EPA rule requiring disclosure and replacement of lead service lines over the next decade. Under HF876, the presence of lead service lines will need to be disclosed on the seller disclosure beginning on January 1, 2026.

Iowa REALTORS® will be updating the seller disclosure form in Form Simplicity to reflect this change and the Iowa Real Estate Commission is tasked with adopting specific rules to implement these disclosure requirements effectively.

2026 Legislative Outlook
The topic of property taxes continued to be at the forefront of conversations as the 2025 session went into overtime to pass a budget. Several iterations of policy changes surrounding property tax were brought forth this session, including changes to the rollback and increases to the homestead exemption. While none of these iterations made it across the finish line in 2025, it is clear this topic will be a priority for many lawmakers in 2026. 

Iowa REALTORS® will continue to work with legislators on property tax reform to ensure the proposals brought forward provide relief with no unintended consequences and have many more discussions on this topic leading into 2026.

If you have any questions on the legislation outlined above, please contact Greta Haas, director of government affairs.