Iowa Security Deposit Returns and Deductions

Last Updated: January 23, 2024 by Phil Ahn

For laws on security deposit collections and holdings in Iowa, click here.

Security Deposit Deductions in Iowa

In Iowa, the following can be deducted [1] from security deposits:

• Unpaid rent
• Costs of damage excluding normal wear and tear
• Eviction expenses and other costs to acquire possession
• Unpaid funds or fees outlined in the lease (e.g. utilities, late fees)

Most states, such as Iowa, do not have a legal limit on how much a landlord can charge for damages except that the charges must be reasonable. [2]

If the cost of the damages exceeds the amount of the security deposit, landlords are entitled to seek additional damages from the former tenant.

What is Considered Normal Wear & Tear vs Damage in Iowa?

“Normal wear and tear” is deterioration that occurs naturally as a result of the tenant using the property as it was designed to be used.

Examples include:

• Gently worn carpets
• Lightly scratched glass
• Faded paint and flooring
• Lightly dirtied grout
• Loose door handles
• Stained bath fixtures

“Damage” means destruction to the rental unit that occurs because of abuse or negligence by a tenant during the course of the tenancy.

Examples include:

• Heavily stained, burned, or torn carpets
• Broken tiles or windows
• Holes in the wall
• Missing fixtures

Can the Landlord Charge for Replacing the Carpet in Iowa?

Landlords can charge for replacing the carpet if it is damaged beyond normal wear and tear.

Can the Landlord Charge for Nail Holes in Iowa?

Landlords can charge a tenant for nail holes if they damage the walls in a way that is not a result of ordinary enjoyment of the rental unit.

Tenants have the right to use the walls within their unit in a reasonable way. This includes inserting small nails or thumbtacks to hang posters or pictures.

However, large holes from drilling, multiple nail holes, large nail holes, and holes made for hanging heavier things may be considered damage and thus, chargeable to the tenant.

Can the Landlord Charge a Cleaning Fee in Iowa?

Landlords in Iowa can chargea cleaning fee if tenants cause damage that requires cleaning  such as wine stains. Landlords cannot charge routine cleaning fees, like steam cleaning the carpet after every tenancy.

Can the Landlord Charge for Painting in Iowa?

In Iowa, landlords can charge for painting, except for normal wear and tear. For example, if the tenant:

• Causes damage beyond normal wear and tear
• Repaints the wall but is not permitted to do so under the lease agreement
• Repaints the wall in an unprofessional way

Normal wear includes:

• Minor scrapes from daily use
• Fading due to sunlight
• Minor cracks in the original paint

Landlords can charge for repainting if the damage is not the result of normal use. This includes stains, large or deep scratches, and water damage.

Can a Security Deposit Be Used for Last Month’s Rent in Iowa?

Iowa law does not forbid the security deposit from being used for any outstanding rent.

Landlords can include a provision in the lease agreement that the security deposit cannot be used for the last month’s rent until the tenant vacates the rental unit.

Security Deposit Returns in Iowa

Landlords must return a security deposit with a written statement of deductions, if any, by mail to the tenant’s forwarding address no later than 30 days after the lease term ends and the tenant provides their forwarding address or delivery instructions.

How Long Do Landlords Have to Return Security Deposits in Iowa?

Iowa landlords have 30 days [3] after the lease term ends and the tenant provides their forwarding address or delivery instructions to return any remaining portion of a security deposit.

If a tenant fails to provide a forwarding address or delivery instructions within one year after the lease term ends, they forfeit their right to the deposit. [4]

Do Landlords Owe Interest on Security Deposits in Iowa?

Landlords in Iowa are not required to hold security deposits in interest-bearing accounts. If they choose to do so, the interest that accrues during the first five years of the tenancy belongs to the landlord. [5]

If a security deposit is held in an interest-bearing account for more than five years, any interest that accrues during the sixth and later years belongs to the tenant.

How Do Landlords Give Notice in Iowa?

If deductions are to be made from the security deposit, a written statement of deductions must be sent by mail to the tenant’s forwarding address. [6]

Security Deposit Disputes in Iowa

If landlords in bad faith fail to return the security deposit or provide a written statement of deductions, if any, within the required time period, tenants can file for the return of the security deposit [7] plus damages in court up totwice the monthly rental payment plus actual damages [8]and reasonable attorneys’ fees. [9]

Tenants can also take legal action against a landlord for:

• Deductions that are not mentioned in the lease agreement
• Failure to hold the security deposit in a financial account
• Unreasonable deductions

How Can Tenants File a Dispute for a Security Deposit in Iowa?

If a landlord fails to perform their obligations regarding a security deposit, the tenant can file a dispute in Small Claims Court if the amount of damages is less than $6,500. [10] If the amount is greater, the tenant must file a civil case in the District Court.

A small claims case regarding the return of a security deposit must be filed within 5 or 10 years depending on whether the lease agreement was oral or written.

Cases are filed in the Small Claims Court in the county where the property is located. An attorney is not required but permitted. The filing fee is $95 plus the cost of service.