Iowa Requires a Groundwater Hazard Statement at Closing

Iowa requires a mandatory disclosure form that exists in no other state, and candidates who have never encountered it fail an entire category of questions they did not know to prepare for.

The IARC governs real estate licensing in Iowa. The PSI exam tests 40 state specific questions alongside 80 national questions, with a minimum passing score of 70%. Iowa's Groundwater Hazard Statement is a filing requirement with no equivalent anywhere else in the country. Its agency disclosure trigger departs from the "first contact" standard most candidates expect. And its continuing education audit system creates a violation risk even for licensees who actually completed their coursework. These three topics are where Iowa candidates consistently leave points on the table. When I taught pre-licensing courses, the Groundwater Hazard Statement was the example I always used for "the thing that's on the exam but literally nowhere else in real estate."

Groundwater Hazard Statements

The Groundwater Hazard Statement is filed with the county recorder at closing, not handed to the buyer. When no hazards exist, the deed itself must include specific statutory exemption language. Neither detail appears in any national prep course, because this form is unique to Iowa. Here's the thing most people miss: the filing destination and the "no hazards" deed language are both tested separately, and missing either one costs you the question.

Iowa's groundwater hazard statement requirement has no direct parallel in Minnesota or Mississippi. The Minnesota exam tests well disclosure requirements and subsurface sewage rules, while Mississippi focuses on agency disclosure timing. Neither state has a groundwater hazard form equivalent to Iowa's.

Iowa uniquely requires a Groundwater Hazard Statement filed with the county recorder for most transfers, disclosing wells, burial sites, underground storage tanks, and hazardous waste, if no hazards exist, the deed itself must include specific statutory exemption language.

Know what the statement must disclose: wells, underground storage tanks, hazardous waste sites, and burial sites. Know what happens when none of those hazards exist. The PSI exam will test the exemption language requirement specifically, because candidates who know the form exists but don't know the deed-language alternative fail the "no hazards" scenario every time.

Agency Disclosure Timing

Iowa's agency disclosure trigger isn't "first contact." It's the moment the licensee provides "specific assistance," a standard that kicks in later than what candidates trained on national materials expect and earlier than candidates who interpret it too narrowly.

Unlike states requiring disclosure at "first substantial contact," Iowa ties it to the moment the licensee provides "specific assistance", candidates from other states instinctively choose the wrong trigger point.

Understanding what counts as "specific assistance" is the core of every Iowa agency disclosure exam question. Answering a general inquiry about listing prices isn't specific assistance. Advising a buyer about whether a particular property fits their criteria is. The IARC tests scenarios where the triggering moment is ambiguous, and the right answer depends on whether the licensee crossed from general information into transaction-specific advice. Know where that line falls under Iowa law, not where you would draw it based on another state's standard.

Continuing Education Audits

Iowa doesn't require CE certificates at renewal, but it conducts random post-renewal audits. The failure to produce documentation of completed courses is itself a violation, regardless of whether the education actually happened.

Iowa doesn't require CE certificates at renewal, but the Commission conducts random audits requiring proof, failure to produce certificates during an audit can constitute a violation even if the courses were actually completed.

The PSI exam tests this rule because it is counterintuitive: a licensee who completed every required CE hour but discarded their certificates can face disciplinary action, while a licensee who submitted a false CE affirmation at renewal faces a more serious charge. Know that Iowa's audit system creates a documentation obligation that survives the renewal date, and know what records licensees must be prepared to produce when selected for audit. The IARC tests compliance mechanics, not just whether CE is required. Why did the Iowa licensee keep all their CE certificates in a fireproof box? Because passing the audit matters more than passing the courses. (The fireproof box part is actually good advice.)