South Dakota Security Deposit Law

South Dakota Security Deposit Law

Author: Kasee Godwin
Date: 12.27.2022

South Dakota Security Deposit Law: A Guide for Landlords and Tenants

South Dakota’s security deposit law is a crucial aspect of rental agreements. This guide provides a clear understanding of these laws, tailored for landlords and tenants.

Maximum Security Deposit Allowed

In South Dakota, the law limits landlords to collecting a maximum security deposit of one month’s rent. However, a larger deposit may be mutually agreed upon if special conditions pose a property risk. This flexibility accommodates various rental situations while ensuring tenant protection.

Acceptable Deductions from Security Deposits

Landlords can deduct from security deposits for:

  • Unpaid rent, utilities, and late fees.
  • Costs of damage beyond normal wear and tear.
  • Other charges clearly outlined in the lease agreement.

It’s important to differentiate between “normal wear and tear” (like gently worn carpets and faded walls) and damage (such as heavily stained carpets or broken windows).

Security Deposit Return Deadline

Landlords must return the security deposit, with a written notice, within 14 days after the lease term ends, and the tenant must provide a forwarding address. This prompt return helps maintain a good relationship between landlords and tenants.

Itemized Deductions

If the tenant requests, landlords must provide a detailed, itemized accounting of deductions within 45 days after the lease term ends. This requirement fosters transparency in the process.

Penalty for Late Return of Security Deposit

If a landlord fails to return the security deposit within 14 days, the tenant can file for the return of the total deposit plus damages up to $200 and court costs. This penalty serves as an incentive for landlords to comply with the return deadline.

Security Deposit Holdings

South Dakota law does not mandate landlords to hold security deposits separate from other funds or to provide interest on held security deposits. This gives landlords flexibility in managing these funds.

Using the Security Deposit for Last Month’s Rent

The law in South Dakota does not forbid using the security deposit for any outstanding rent. However, lease agreements can include provisions regarding this.

Additional Considerations

  • Landlords in South Dakota can charge an additional pet deposit, except for service dogs and emotional support animals.
  • There is no limit on the amount of rent that can be collected upfront in South Dakota.

Filing a Dispute

Tenants can file in Small Claims Court if the amount is less than $12,000. The claim must be filed within six years; while an attorney is not required, it’s permitted.

Best Practices for Tenants and Landlords in South Dakota

Understanding and complying with South Dakota’s security deposit laws is essential for a successful, legal tenancy relationship. Here are the best practices for both tenants and landlords:

For Landlords:

  • Collect Appropriate Deposits: Only collect up to one month’s rent as a security deposit unless special conditions warrant a higher amount. Consider additional deposits for pets, but remember, service animals are exempt.
  • Document Property Condition: Though not required by law, it’s wise to document the rental property’s condition at move-in and move-out. Documents can include photographs and written records.
  • Provide Clear Lease Agreements: Ensure your lease agreements clearly outline terms regarding the security deposit, including conditions for deductions.
  • Promptly Return Deposits: Always return security deposits within 14 days of lease termination and tenant’s forwarding address provision. Include an itemized list of deductions if necessary.
  • Understand Deductions: Deduct only for unpaid rent, damages beyond normal wear and tear, and other lease-specified charges. Be fair and reasonable in your assessments.

For Tenants:

  • Understand Your Lease: Carefully review your lease agreement, especially the security deposit and property maintenance clauses.
  • Keep Records: Document the property’s condition when you move in and out. Records can be vital if disputes arise about the security deposit.
  • Report Changes or Damages: Inform your landlord about any significant damages or necessary repairs during your tenancy.
  • Follow Lease Terms: Adhere to the terms of your lease to avoid unnecessary deductions from your security deposit.
  • Provide Forwarding Address: Ensure you provide your address to your landlord to receive your deposit return promptly.

Both parties should communicate clearly and maintain records to avoid misunderstandings. Landlords should act reasonably and within legal bounds, while tenants should respect the property and fulfill lease obligations. Understanding these best practices can lead to a more harmonious landlord-tenant relationship and a smoother experience in South Dakota.

Disclaimer

Qira aims to keep this information as up-to-date as possible. The content provided here is informational and should be different from legal counsel. Please refer to the relevant government sources to check for any changes or updates to the law.

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Kasee Godwin

Position: Director of Marketing
Social Networks

Kasee is the Director of Marketing for Qira. She has nearly 15 years of experience in the real estate marketing industry, including 10 years on the client side. In her spare time, she enjoys reading science fiction, exploring new wineries, and fostering Golden Retrievers.

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