Security deposits are regulated by Iowa Code Chapter 562A.12.
Landlords are allowed to take a maximum of two (2) months rent
as a security deposit.
Landlords may have the deposit in an interest-bearing account
and are entitled to keep any interest up to five years of the
tenancy. (After five years the tenant can request the interest)
Deposits can only be used for the following purposes:
To remedy a tenant's default in the payment of rent or of
other funds due to the landlord pursuant to the rental
agreement.
To restore the dwelling unit to its condition at the
commencement of the tenancy, ordinary wear and tear excepted.
To recover expenses incurred in acquiring possession of the
premises from a tenant who does not act in good faith in
failing to surrender and vacate the premises upon
noncompliance with the rental agreement and notification of
such noncompliance pursuant to this chapter.
Read more in Iowa Security Deposits
