Security Deposit Alternative in Iowa
Iowa caps a rental deposit at two months' rent and gives you 30 days after the tenancy ends and the resident gives you a mailing address to return it or send a written statement of the specific reason you are keeping any of it. Miss the statement and you forfeit the right to keep anything. In any dispute the burden of proving the deduction was justified is on you, by a preponderance of the evidence.
What Iowa law says about security deposits
Read from the Iowa statute on 2026-09-10. Deposit rules change, and this is general information rather than legal advice. Confirm the current text with your own counsel before you change a lease.
Can you require it of every Iowa resident?
Iowa has no statute written for a monthly fee charged instead of a deposit, so the arrangement rests on your lease and the general deposit rules. A rental deposit is held for the resident in a federally insured bank, savings and loan or credit union, never commingled with your own funds, though a common trust account is allowed, and the interest belongs to you for the first five years of the tenancy. Within 30 days of the tenancy ending and the resident giving you a mailing address, you return the deposit or send a written statement of the specific reason for keeping any of it. What you may keep is limited to unpaid rent or other sums due under the lease, restoring the unit less ordinary wear, and the cost of recovering possession from a resident who would not leave in good faith. In any dispute the burden of proving the deduction is on you. Miss the 30-day statement and you forfeit the right to withhold anything.
Rules differ by state and by city, and subsidized housing is its own question. This is general information for property managers, not legal advice. Get a written opinion before you make the fee a condition of tenancy anywhere.
How the program works in Iowa
The mechanics are the same in every state Beagle operates in. The program is designed to comply with applicable state and local regulations, and the rate is set by the deposit amount rather than by geography, so a Iowa property and one two states over are quoted the same way.
The resident chooses at signing
Instead of producing the full deposit, the resident pays a smaller non-refundable monthly fee that is billed with rent. Nothing is held, so nothing has to be returned.
The property keeps its protection
Damage beyond normal wear is reimbursed up to the deposit amount the unit would otherwise have required, so what you can recover does not shrink.
Move-out stops being a negotiation
A claim is filed against the program rather than deducted from money you are holding, which takes the itemised-deduction letter and the dispute that follows it off your team's desk.
You earn on every resident who takes it
You set an administrative fee on top of the premium, up to $5 per unit per month, and keep it.
Iowa security deposit alternative FAQs
Iowa has no statute answering that, so a mandatory version is a question for your own attorney. Section 562A.12 governs money held as a rental deposit, from the separate account to the 30-day statement, so whether anything is being held at all is where that review should begin.
Security deposit rules in other states
See it on your Iowa units
Run the program against your own unit count, or walk through it with our team. No upfront fees, no onboarding charges, no long-term contracts.