Mean for Landlords & Tenants?
Probably the most important ruling in DeStefano was that landlords may not automatically deduct from tenants' security deposits for carpet cleaning. Instead landlords should, at the end of the tenancy, inspect the unit and only deduct from the security deposit for carpet cleaning if the carpet is dirty beyond ordinary wear and tear. The Court did hold that a separate fee for professional carpet cleaning charged at the beginning of the lease might be legal, but declined to rule on the issue.
Another significant issue had to do with shifting the responsibility for repair and maintenance from landlords to tenants. Generally, the Iowa Landlord Tenant Act requires that landlords provide maintenance and repair, but provides limited exceptions permitting a lease to provide that a tenant is responsible for specified repairs.. In DeStefano, the landlord required tenants to pay for the cost of repairs done by the landlord for vandalism to a single family house by a burglar. The Court ruled that landlords could not charge tenants for repairs done by the landlord and that to use the exception, the lease had to provide that the tenant was responsible for maintenance and repair. While it did not issue a ruling, the Court also indicated that it was skeptical that landlords could transfer to tenants the landlord's responsibility to make repairs and maintenance required for health and safety.
The Court also ruled that if a lease permitted subleasing, that a landlord could not unreasonably refuse to sublease and that attorney fees were not included in the $5000 jurisdictional limit of small claims cases.
In Caruso the Court ruled that in order for punitive damages for knowingly and willfully using prohibited lease provisions to be imposed that the landlord must actually know that the provision was prohibited. The Court noted that this was a "very high standard" but now that the Supreme Court had ruled on automatic carpet cleaning and other issues, that the existence of the rulings should be taken into consideration in future cases. In Caruso the Court also ruled that in order to show bad faith withholding of a security deposit, the tenant needed to show dishonesty on the part of the landlord. The Court noted that making security deposit deductions for cleaning when a unit was clean could qualify as dishonesty.