Iowa security deposit rules.
The Iowa rules for residential security deposits in plain English: how much can be charged, how fast it comes back, whether interest is owed, and what catches operators out.
Last reviewed · Statute: Iowa Code § 562A.12 · Not legal advice
How much can be charged
Capped at two months’ rent.
When it has to come back
30 days from termination and receipt of mailing address, with itemised deductions.
Interest
The statute sets no rate and does not require an interest-bearing account. Interest actually earned during the first five years of a tenancy belongs to the landlord; interest earned after that, if the account pays any, belongs to the tenant.
Where the money has to sit
Must be held in a separate account.
What catches operators out
- The five-year rule only matters if the account earns interest, and only for long tenancies.
- Bad-faith retention exposes the landlord to punitive damages of up to twice the monthly rent on top of actual damages; the court may award attorney’s fees to the prevailing party.
What this looks like with Standby in Iowa.
When a resident takes a Standby certificate there is no cash deposit to hold, so the cap, the return deadline and the interest rules above have nothing to attach to. You are covered up to the full deposit and draw on it when you need to.
When a resident pays cash instead, Standby handles that deposit under your lease and Iowa law, so your team is not tracking return deadlines by hand.
This page summarises the most common single-family and multifamily residential rule in Iowa. Furnished units, senior leases, mobile-home tenancies and short-term rentals can differ, and city ordinances may override the state default. Check the statute before relying on a figure for a specific lease.