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Iowa · TitleIowa transfer fee covenants: they don't bind later owners, and any lien for the fee is void

Iowa defines a transfer fee as a fee or charge payable on the transfer of an interest in real property, or for the right to make or accept a transfer, whether fixed or based on value or price (Iowa Code §558.48(1)(b)(1)). The term excludes the price paid to the seller, a licensed broker's commission, lender charges such as assumption and estoppel fees, lease charges, payments for waiving an option or right of first refusal, and government fees and taxes (§558.48(1)(b)(2)). A transfer fee covenant is a declaration or covenant that requires paying a transfer fee to the declarant or another named person on a later transfer (§558.48(1)(c)). Such a covenant doesn't run with the title to real property and isn't binding on or enforceable against any later owner, purchaser or mortgagee, and any lien purporting to secure a transfer fee under it is void and unenforceable (§558.48(2)).

What the statutes set

  1. Transfer fee (§558.48(1)(b))

    A charge on transfer, fixed or based on value or price.

  2. Exclusions (§558.48(1)(b)(2))

    Price, broker commission, lender and lease charges, option waivers, government fees.

  3. Not binding (§558.48(2))

    Doesn't run with the title or bind later owners or mortgagees.

  4. Liens void (§558.48(2))

    Any lien securing a transfer fee is void and unenforceable.

What the TC checks on an Iowa property for transfer fees

  • Search the title commitment for any covenant or declaration requiring a fee on resale.
  • Send any such covenant to the title company and the parties' attorneys before the objection deadline.
  • Don't add a private transfer fee to the settlement statement without the title company's sign-off.

Questions about Iowa transfer fee covenants

Can an Iowa covenant require a fee every time the house sells?

It can't bind later owners, purchasers or mortgagees; a transfer fee covenant doesn't run with the title (Iowa Code §558.48(2)).

Is a lien for an Iowa transfer fee valid?

No. Any lien purporting to secure a transfer fee under such a covenant is void (Iowa Code §558.48(2)).

Related guides

Track the title review and any covenant objection as tasks on the deal in ClosingCode.

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Source: Iowa Code §558.48 (legis.iowa.gov), read October 31, 2026.

General information, not legal advice. ClosingCode is software; it is not a law firm or brokerage. This guide is not a substitute for the advice or services of an attorney.