Overview
South Dakota law regulates security deposits to ensure fair treatment for both landlords and tenants. The rules specify how deposits must be handled, what deductions are allowed, and how quickly funds must be returned.
Under South Dakota Codified Laws § 43-32-6.1 to § 43-32-24, landlords are required to follow clear procedures when managing security deposits. Violations may lead to penalties and the forfeiture of the right to retain any portion of the deposit.
This guide covers:
How much landlords can charge
Where deposits must be stored
Rules for returning security deposits
Penalties for non-compliance
Related Statute: SDCL § 43-32-6.1 to § 43-32-24
1. Security Deposit Limits & Storage Requirements
Maximum deposit: Landlords may charge no more than one month’s rent as a security deposit, unless special conditions pose a danger to the premises, in which case a larger deposit may be permitted.
Storage requirements: While the law requires landlords to safeguard deposits, there is no requirement to store them in a separate or interest-bearing account.
Tenant notification: There is no statutory requirement for landlords to notify tenants of where the deposit is held.
Law Reference: SDCL § 43-32-6.1
2. Security Deposit Returns & Allowable Deductions
Return deadline: Landlords must return the deposit within two weeks of the tenant vacating the property. If requested by the tenant, the landlord has an additional 45 days to provide a written, itemized accounting.
Permissible deductions: Landlords may deduct for unpaid rent, damage beyond normal wear and tear, and other lease violations.
What landlords cannot deduct: Landlords cannot deduct for ordinary wear and tear such as worn carpet or faded paint.
Itemized statement required: If deductions are made, a written itemized statement must be provided within 45 days of the tenant’s request.
Law Reference: SDCL § 43-32-24
3. Interest Payments & Documentation Requirements
Interest payments: South Dakota does not require landlords to pay interest on security deposits.
Move-in condition report: While not required, documenting the unit’s condition at move-in is strongly recommended for both parties.
Tenant review period: Tenants are encouraged to inspect the property upon moving in and keep records of any pre-existing conditions.
Failure to provide documentation: If the landlord fails to return the deposit or provide an itemized statement within the required timeframe, they may forfeit the right to retain any portion.
Law Reference: SDCL § 43-32-24
4. Penalties for Mishandling Security Deposits
South Dakota law outlines consequences for landlords who mishandle security deposits.
Failure to return the deposit within the designated period may result in forfeiture of the right to withhold any portion.
Failure to provide an itemized list of deductions upon request can also lead to the same penalty.
Law Reference: SDCL § 43-32-24
Key Takeaways
Landlords may not charge more than one month’s rent unless special conditions apply.
Deposits must be returned within two weeks, with up to 45 days allowed for itemized statements upon tenant request.
No interest is required to be paid on deposits.
Only specific deductions are allowed, and normal wear and tear may not be charged.
Non-compliance may result in full forfeiture of the deposit and legal consequences.
By understanding and following South Dakota security deposit laws, landlords can ensure compliance, and tenants can protect their financial interests.
Disclaimer: This blog post is intended for informational purposes only and does not constitute legal advice. Readers should not act or refrain from acting based on any information included in this post without seeking legal counsel or other professional guidance specific to their situation. The information is provided “as is” without any representations or warranties of any kind, express or implied, including but not limited to the accuracy, completeness, or reliability of the content. Laws and regulations may change and vary by jurisdiction.
