Key Takeaways
- Iowa is a "title theory" state where the lender holds legal title until the mortgage is paid
- Iowa recognizes various forms of property ownership including tenancy in common, joint tenancy, and tenancy by the entirety for married couples
- Iowa requires recording of deeds to establish priority against subsequent purchasers
- Iowa uses abstract and opinion or title insurance to establish marketable title
- Property taxes in Iowa are assessed by county assessors and collected by county treasurers
Iowa Property Law
Iowa has specific laws governing property ownership, transfer, and recording that differ from some other states.
Title Theory State
Iowa is a title theory state for mortgages:
| Concept | Description |
|---|---|
| Title theory | Lender holds legal title until paid |
| Borrower holds | Equitable title during loan |
| Upon payoff | Legal title transfers to borrower |
| Default | Lender has title, but must foreclose |
Contrast: In "lien theory" states, the borrower holds title and the lender has only a lien.
Forms of Property Ownership
Tenancy in Common
| Feature | Description |
|---|---|
| Ownership shares | Can be unequal |
| Right of survivorship | None—interest passes to heirs |
| Transfer | Can sell or transfer independently |
| Default form | Assumed when not specified |
Joint Tenancy
| Feature | Description |
|---|---|
| Ownership shares | Equal shares only |
| Right of survivorship | Yes—passes to surviving owner(s) |
| Four unities required | Time, Title, Interest, Possession |
| Transfer | Breaks joint tenancy if transferred |
Tenancy by the Entirety
Iowa recognizes tenancy by the entirety for married couples:
| Feature | Description |
|---|---|
| Who can hold | Married couples only |
| Right of survivorship | Yes |
| Protection | May offer creditor protection |
| Transfer | Both spouses must agree |
Key Point: Tenancy by the entirety provides additional protection for married couples' real property.
Recording System
Iowa Recording Requirements
Iowa uses a race-notice recording system:
| Concept | Description |
|---|---|
| Race-notice | First to record without notice wins |
| Where recorded | County recorder's office |
| What's recorded | Deeds, mortgages, liens, easements |
| Priority | Based on recording date and time |
Purpose of Recording
Recording provides:
- Constructive notice to the world
- Priority against subsequent purchasers
- Protection of property rights
- Public record of ownership
Establishing Marketable Title
Abstract and Opinion
| Component | Description |
|---|---|
| Abstract | Historical summary of all recorded documents |
| Attorney opinion | Lawyer reviews and gives opinion on title |
| Traditional method | Common in Iowa |
Title Insurance
| Type | Protection |
|---|---|
| Owner's policy | Protects buyer against title defects |
| Lender's policy | Protects lender's interest |
| One-time premium | Paid at closing |
Iowa Property Taxes
Assessment Process
| Step | Description |
|---|---|
| Assessment | County assessor values property |
| Classification | Residential, commercial, agricultural |
| Rollback | Percentage of assessed value taxed |
| Tax rate | Set by local taxing authorities |
Tax Collection
| Item | Details |
|---|---|
| Collector | County treasurer |
| Due dates | September 30 and March 31 |
| Delinquent | Penalties and interest apply |
| Tax sale | Property sold for delinquent taxes |
Important: Iowa has agricultural property valuation rules and homestead tax credits that may affect assessments.
Homestead Rights
Iowa recognizes homestead protection:
| Protection | Description |
|---|---|
| Tax credit | Homestead tax credit for primary residence |
| Exemption | Some protection from creditors |
| Both spouses | Must sign to convey homestead |
Iowa is what type of state for mortgage purposes?
Which form of ownership is only available to married couples in Iowa?
When are Iowa property taxes due?