1.A service agreement shall be considered unfair under this section if a service that is
covered by the service agreement is not required to be completely performed within one year
after the date on which the service agreement is executed, and the service agreement has any
of the following characteristics:
a.The service agreement purports to run with the land or to be binding on future owners
of interests in the residential real estate that is the subject of the service agreement.
b.The service agreement permits assignment of the right to provide service under the
serviceagreementwithoutrequiringnoticeto, andtheconsentof, theowneroftheresidential
real estate that is the subject of the service agreement.
c.The service agreement purports to create a lien, encumbrance, or other real prope
Free access — add to your briefcase to read the full text and ask questions with AI
1. A service agreement shall be considered unfair under this section if a service that is
covered by the service agreement is not required to be completely performed within one year
after the date on which the service agreement is executed, and the service agreement has any
of the following characteristics:
a. The service agreement purports to run with the land or to be binding on future owners
of interests in the residential real estate that is the subject of the service agreement.
b. The service agreement permits assignment of the right to provide service under the
serviceagreementwithoutrequiringnoticeto, andtheconsentof, theowneroftheresidential
real estate that is the subject of the service agreement.
c. The service agreement purports to create a lien, encumbrance, or other real property
security interest on the residential real estate that is the subject of the service agreement.
2. If a service agreement is unfair under this section, the service agreement shall be
unenforceable.
3. Ifapersonentersintoanunfairserviceagreementwithaconsumer,thepersoncommits
an unlawful practice under section 714.16.
4. a. A person shall not cause an unfair service agreement, or a notice or memorandum
of an unfair service agreement, to be recorded.
b. A person who causes an unfair service agreement, or a notice or memorandum of an
unfair service agreement, to be recorded commits an aggravated misdemeanor.
c. A county recorder may refuse to record an unfair service agreement.
d. If an unfair service agreement is recorded, the recorded service agreement shall not
provide actual or constructive notice against an otherwise bona fide purchaser or creditor, or
actual or constructive notice against heirs or other successors-in-interest to the residential
real estate that is the subject of the recorded service agreement.
§558B.2, UNFAIR REAL ESTATE SERVICE AGREEMENTS 2
e. If an unfair service agreement or a notice or memorandum of an unfair service
agreement is recorded, any person with an interest in the residential real estate that is
the subject of the service agreement may apply to a district court in the county in which
the service agreement is recorded for a court order declaring the service agreement
unenforceable.
f. If an unfair service agreement or a notice or memorandum of an unfair service
agreement is recorded, any person with an interest in the residential real estate that is the
subject of the recorded service agreement may recover actual damages, costs, and attorney
fees as may be proven against the person who caused the unfair service agreement or the
notice or memorandum of the unfair service agreement to be recorded.
5. This section does not apply to any of the following:
a. A home warranty or similar agreement that covers the cost of maintenance for a fixed
period of time of a major home system including but not limited to plumbing, electrical,
heating, ventilation, or air conditioning.
b. An insurance contract.
c. An option or a right of refusal to purchase residential real estate.
d. A maintenance or repair agreement entered into by the homeowners’ association of a
common interest community.
e. A mortgage loan, or a commitment to make or to receive a mortgage loan.
f. A security agreement under the uniform commercial code related to the sale or rental
of personal property or fixtures.
g. Water,sewer,electrical,telephone,cable,internet,oranyotherutilityserviceproviders.
6. This section shall not be construed to impair a person’s rights established by a
mechanics’ lien under chapter 572.