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How to Hold and Return a Security Deposit in Iowa

Managing a Security Deposit in Iowa

In Iowa, you may not charge your subtenant a security deposit that exceeds more than two months' rent.

Storing the Deposit

You must store the deposit in a bank that is insured by an agency of the federal government. The deposit can’t be in the same account as any of your personal money and you can’t use the money as if it’s your own.

Returning the Deposit

You have 30 days after the end of the sublease term to return your subtenant's security deposit. If the deposit earned any interest while it was stored in the bank, you may keep the interest. The security deposit can be used to cover expenses associated with unpaid rent, repair of damages that exceed normal wear and tear, or to pay for the cost of removing a subtenant who overstays the sublease agreement. If you keep any amount, you must provide a written statement that shows the specific reasoning for withholding. If you're withholding for damages, the statement must describe the damages in detail. If you fail to follow these instructions, you forfeit your right to keep any or all of the security deposit, so be sure to follow them closely.

The information provided on this website does not, and is not intended to, constitute legal advice.