SF460: Raising the Bar for Home Inspections in Iowa

Iowa REALTORS® strives to ensure REALTORS® and their clients experience a clear, transparent real estate transaction. This year, that meant working with our elected officials to introduce and pass legislation that will improve the home inspection process during the home buying process. 

The Home Inspection Accountability Act (SF460) passed both the Iowa House and Senate on a unanimous bipartisan basis and was signed into law by Governor 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.

Under this legislation, only licensed architects, professional engineers, or members of a national home inspectors association are permitted to issue home inspection reports. Additionally, home inspectors licensed or registered in other states are permitted to perform home inspections in Iowa.

The bill contains several consumer protection provisions surrounding conflicts of interest, including prohibiting home inspectors from: 

• performing repairs on properties they have inspected within the past 12 months (excluding radon or pest remediation)
• inspecting properties in which they have a financial interest, unless disclosed in writing to the buyer
• offering or accepting referral fees or kickbacks related to inspections
  
  

SF460 sets forth guidelines for what provisions must be 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.

With the enactment of SF460, home inspectors in Iowa must maintain errors and omissions insurance coverage and retain this insurance for at least one year after issuing a report. Failure to carry E&O insurance or misrepresenting qualifications can result in misdemeanor charges and fines.

We appreciate the advocacy of REALTORS® from across the state in getting this consumer protection bill signed into law!

If you have any questions regarding SF460, the Home Inspection Accountability Act, please reach out to Director of Government Affairs Greta Haas.