South Dakota Security Deposit Laws in 2024

Renting an apartment or house in South Dakota requires paying a security deposit, typically equal to one month's rent. Landlords can use this deposit to cover any unpaid rent or damages when a tenant moves out. However, disputes often arise when tenants feel landlords wrongfully withhold the security deposit. 

To avoid deposit issues, South Dakota renters need to understand their rights under state laws. This article provides an overview of key South Dakota security deposit regulations and procedures that both tenants and landlords should know. We'll cover the maximum allowable deposit amount, timelines for returning deposits, allowable deductions, dispute resolutions, and more. Understanding these rental security deposit laws can help renters in South Dakota prevent unfair deposit losses.

The goal is to educate both tenants and landlords on proper security deposit handling per South Dakota statutes. Renters will learn how to avoid deposit deductions and dispute improper withholdings. And landlords will learn the legal limits on charging and deducting from deposits. With clear knowledge of South Dakota security deposit laws, both parties can avoid misunderstandings and potential legal issues.

South Dakota Security Deposit Laws 

South Dakota has codified laws that govern security deposits and outline the rights and responsibilities of landlords and tenants. These laws can be found in the South Dakota Codified Laws Chapter 43-32. 

The laws in Chapter 43-32 set limits on the maximum allowable security deposit a landlord can charge. They also establish timelines for when a landlord must return a security deposit after a lease ends, what deductions a landlord can legally withhold, and the process for disputing improper deductions. 

These security deposit laws apply broadly to residential rental properties in South Dakota. However, there are some exceptions for long-term leases and commercial properties.

The purpose of the codified laws is to protect renters by preventing landlords from taking advantage of security deposits. They aim to create a fair balance between allowing landlords to cover damages and losses, while also ensuring tenants get their deposits returned in a timely manner.

Maximum Allowable Security Deposit

South Dakota law limits how much a landlord can charge for a security deposit. For most rental units, the maximum security deposit a landlord can require is equal to 1 month's rent. 

For example, if the monthly rent is $1,000, the maximum security deposit would be $1,000. 

There is an exception for furnished rental units. For furnished units, landlords can charge up to 1.5 times the monthly rent amount.

So if a furnished unit rents for $1,000 per month, the landlord could require a security deposit of up to $1,500.

The limits on security deposit amounts apply to unfurnished and furnished residential rental units. South Dakota law does not restrict security deposit amounts for commercial leases.

While the law sets maximum amounts a landlord can charge, a tenant is free to voluntarily agree to pay a higher deposit amount. However, the landlord cannot require more than the legal limit.

Returning the Security Deposit

When a lease ends, South Dakota law requires landlords to return the full security deposit to the tenant within 14 days. If the landlord intends to withhold any portion of the deposit, they must provide the tenant with a written list of itemized deductions explaining the reasons for withholding. 

The itemized deduction list should clearly state what amounts are being deducted and the justification, such as unpaid rent, damages beyond normal wear and tear, cleaning fees if the unit was left unclean, or other expenses outlined in the lease. Photos or invoices related to the deductions can be included with the list.

If the landlord fails to return the full deposit or provide an itemized deduction list within 14 days after the lease ends and the tenant vacates, the tenant can take legal action. South Dakota law allows tenants to sue for up to two times the security deposit amount if the landlord does not comply with deposit return requirements.

Tenants should review the deduction list carefully and determine if they agree with the landlord's claims. If the tenant disputes any of the deductions as improper or unreasonable, it's important to act quickly. The tenant typically has a limited timeframe to contest wrongful withholdings, as outlined in the next section.

Allowable Deductions

Landlords in South Dakota can legally withhold portions of the security deposit for unpaid rent, property damage beyond normal wear and tear, and reasonable cleaning fees if the unit is left unclean.

Unpaid Rent

If the tenant fails to pay rent or moves out owing rent, the landlord can use the security deposit to cover the unpaid rent. This also includes late fees outlined in the lease agreement. The landlord must provide notice of the amount withheld and the dates the rent was unpaid.

Damages

Landlords can deduct from the deposit to repair or replace any damages to the property beyond normal wear and tear. This includes things like:

• Holes in the walls
• Stained or damaged carpeting 
• Missing or damaged appliances
• Broken windows and doors
• Damage to fixtures like sinks, showers, and toilets

The landlord must provide a detailed list of the damages and estimated repair costs. Tenants should thoroughly inspect the property upon moving in and document any pre-existing damages.

Cleaning

If the tenant fails to clean the property upon move out, the landlord can hire professional cleaners and deduct reasonable fees from the deposit. Typically this includes carpet cleaning, appliance cleaning, and general cleaning if the unit is left unclean.

Tenants should thoroughly clean the unit and have it ready to turn over upon move out. The lease agreement may specify required cleaning tasks. Tenants can ask for a pre-move out inspection to identify any cleaning issues.

Disputing Improper Deductions

If a tenant believes the landlord has made improper deductions from the security deposit, they have the right to dispute it in South Dakota. Here is the process tenants can follow:

• Review the itemized deduction list provided by the landlord within 14 days after moving out. Make sure each deduction is valid according to the lease terms and state laws.
• Notify the landlord in writing if disputing any deductions. Explain which deductions are being disputed and why. Request the disputed amount be returned.
• The landlord has 14 days after receiving the dispute notice to either return the disputed amount or provide an explanation as to why they believe the deductions are valid.
• If the dispute is unresolved, the tenant can file a lawsuit in small claims court against the landlord. This must be done within 6 months after the termination of the lease. 
• At the small claims court hearing, the tenant and landlord will present evidence to support their case regarding the security deposit deductions. This may include the lease, move-in and move-out inspection reports, receipts, repair estimates, photos, and any other relevant documentation.
• If the judge determines the landlord improperly withheld any portion of the deposit, the landlord may be ordered to return up to 2 times the amount improperly withheld, plus court costs and reasonable attorney fees.
• It is advisable for tenants to take thorough move-in and move-out videos/photos to document the condition of the unit. This evidence can help prove whether deductions were valid or not if a dispute arises. Tenants should also keep copies of all correspondence and documentation related to the security deposit.

Abandoned Property   

If a tenant abandons the rental property, the landlord still has responsibilities related to the tenant's possessions left behind. According to South Dakota law, the landlord may take possession of the tenant's abandoned personal property, but must store and care for any valuable property for a minimum of 30 days. After 30 days, the landlord can dispose of or sell the abandoned property, but must apply any proceeds from selling property to any money owed by the tenant, such as back rent or damages.

If the landlord chooses to sell the abandoned property, they must mail a notice of the sale to the tenant at their forwarding address if provided, or to the rental address if no forwarding address was given. This gives the tenant a chance to claim the property. Landlords may charge reasonable costs for storing, selling or disposing of abandoned property. But they cannot hold a tenant's possessions for ransom in exchange for unpaid rent or other sums owed.

Overall, landlords in South Dakota must take care when dealing with a tenant's abandoned belongings. Valuable items should be stored for at least 30 days, and proper notice must be given before disposing of or selling the property. Any money received from selling abandoned items must go towards money owed by the tenant.

Commercial Lease Deposits

South Dakota's security deposit laws set limits on the maximum allowable deposit for residential leases. However, there are no limits on security deposit amounts for commercial leases in the state. Landlords renting commercial property can charge any deposit amount they deem necessary. 

While commercial leases are not subject to deposit limits, other aspects of South Dakota's security deposit laws still apply. For example, the landlord must return the deposit within 14 days after the tenant moves out or provide an itemized list of any deductions. The tenant also has the right to dispute any improper deductions from their commercial lease deposit. 

If the landlord fails to comply with the security deposit laws for commercial leases, they may be liable to the tenant for up to two times the amount of the deposit. It's important for both landlords and tenants to understand their rights and responsibilities when it comes to commercial lease deposits in South Dakota.

Retaliation Prohibited

South Dakota law prohibits landlords from retaliating against tenants who dispute improper security deposit withholdings. Retaliation can include actions like serving an eviction notice without proper grounds, shutting off utilities, or interfering with a tenant's rights in any way.  

Specifically, a landlord cannot retaliate if a tenant has:

• Complained in good faith about a lease violation to the landlord
• Filed a lawsuit against the landlord
• Participated in a tenant's union or similar organization
• Successfully sued the landlord for violations of the law

If a landlord does attempt to retaliate within 6 months of a tenant engaging in any protected actions, the tenant can sue the landlord to recover up to 3 month's rent or treble damages, whichever is greater. The tenant can also recover court costs and reasonable attorney fees related to the retaliation claim.

Some examples of improper retaliation include:

• Serving an eviction notice without proper cause
• Increasing rent more than normal 
• Shutting off utilities like water or electricity
• Changing locks or removing doors/windows
• Harassing the tenant through excessive inspections or other means

Tenants who feel their landlord is retaliating should carefully document the retaliation and consult an attorney. The law prohibits landlords from interfering with a tenant's rights, so retaliation over a security deposit dispute can have serious consequences.

Tenant and Landlord Responsibilities

Both tenants and landlords have certain responsibilities when it comes to security deposits in South Dakota.

Tenant Responsibilities

As a renter, you have several responsibilities related to your security deposit:

Comply with all terms of the lease agreement

Make sure to follow all rules and obligations outlined in your lease. Pay rent on time, avoid illegal activities, don't sublet without permission, etc. Violating lease terms is one of the main reasons landlords make deductions from security deposits.   

Avoid damaging the rental property

You are responsible for any damage to the unit beyond normal wear and tear. This includes damage caused by you, other occupants, guests, or pets. Take care of the property as if it were your own.

Conduct a move-out inspection

Do a walkthrough inspection with your landlord to identify any damage or cleaning issues that may lead to deposit deductions. This gives you a chance to repair or clean items before moving out.

Thoroughly clean the property

Make sure to clean the entire rental unit before moving out. This includes all rooms, appliances, floors, windows, bathrooms, closets, garages, etc.

Return all keys and access items

Don't forget to return all keys, garage door openers, gate cards, etc. to your landlord when you move out. You may be charged for missing items.

Landlord Responsibilities  

Landlords also have important security deposit obligations:

Hold the deposit in a separate account

Landlords must keep deposits in a separate escrow account and cannot mix it with their own funds.

Provide notice of deductions

If making any deductions from the deposit, the landlord must send the tenant an itemized list explaining the reasons within 14 days.

Conduct timely repairs

Landlords are required to make repairs and maintain the property in a timely manner. Neglecting maintenance issues can be grounds for getting your full deposit back.

Avoid illegal deductions

Landlords cannot make deductions for normal wear and tear, pre-existing damages, or using the deposit as unpaid rent.

Return deposit balance

Any deposit balance left after any agreed deductions must be promptly returned to the tenant within 14 days after lease termination.

Following these responsibilities as a tenant and choosing a landlord who respects their obligations will help avoid deposit disputes. Make sure you understand your rights under South Dakota law.

Frequently Asked Questions

Can you withhold rent in South Dakota?

In South Dakota, tenants may withhold rent if a landlord fails to make necessary repairs that affect the habitability of the rental unit. However, this should be done cautiously and usually after providing notice to the landlord and allowing a reasonable amount of time for the repairs to be made. It's advisable to consult with a legal professional before withholding rent to ensure compliance with local laws.

What are the fair housing laws in South Dakota?

Fair housing laws in South Dakota prohibit discrimination based on race, color, religion, sex, disability, familial status, or national origin in the rental, sale, or financing of housing. These laws mirror the federal Fair Housing Act and are enforced to ensure all individuals have equal housing opportunities.

How often can a landlord raise rent in South Dakota?

In South Dakota, there are no specific restrictions on how frequently a landlord can raise rent. Landlords must provide at least one month’s notice before increasing rent for month-to-month leases. For fixed-term leases, rent cannot be increased until the lease term ends unless otherwise stipulated in the lease agreement.

What happens if you break a lease in South Dakota?

If you break a lease in South Dakota, you may be responsible for the rent due for the remainder of the lease term, unless the landlord is able to re-rent the unit. Landlords are generally required to make a reasonable effort to find a new tenant. If a new tenant is found, the original tenant's obligation to pay future rent ends.

Is South Dakota a tenant-friendly state?

South Dakota tends to be more neutral but leans towards being landlord-friendly due to less stringent regulations on rent control and eviction procedures compared to more tenant-friendly states.

Is South Dakota a landlord-friendly state?

Yes, South Dakota is considered somewhat landlord-friendly. The state’s laws generally support landlords in terms of ease of eviction and minimal state-level regulation on issues like rent increases and security deposit limits.