If there’s a possibility that you could lose your home to a foreclosure in South Dakota, you should learn more about South Dakota’s foreclosure laws. For example, South Dakota foreclosures can be nonjudicial (which means they take place without court supervision), but the homeowner can force the lender to foreclosure though the state court system. Also you might be able to pay the past-due amounts to reinstate the mortgage before the sale (depending on your situation). In addition, you might be on the hook for a deficiency judgment after the foreclosure.
The summary below provides information about many of the key features of South Dakota foreclosure law along with citations to the statutes so you can read the law yourself.
The citations to South Dakota’s foreclosure statutes are:
You can find the South Dakota Codified Laws on the South Dakota legislature’s website at http://legis.sd.gov/Statutes/Codified_Laws. If you need help locating the statutes, see Finding Your State’s Foreclosure Laws.
We’ve summarized the main parts of South Dakota’s foreclosure laws below. You can find more detailed articles on various aspects of South Dakota foreclosure law in Nolo’s South Dakota Foreclosure Law Center.
Foreclosures in South Dakota can be nonjudicial, which means they happen outside of court. However, even if the lender starts a nonjudicial foreclosure, the borrower can require the lender to foreclose judicially through the court system by making an application in the appropriate court. S.D. Codified Laws § 21-48-9. (Learn more about nonjudicial and judicial foreclosures.)
South Dakota also permits “voluntary” foreclosures. In this type of foreclosure, the lender and borrower mutually agree that the lender may take immediate possession of the property. The borrower agrees to forfeit the right to redeem the property and the lender agrees to forfeit the right to go after the borrower for a deficiency judgment. S.D. Codified Laws § 21-48A-1.
In a South Dakota nonjudicial foreclosure, the foreclosing party must serve the borrower a notice of sale at least 21 days before the sale date. S.D. Codified Laws § 21-48-6.1. The foreclosing party must also publish the notice in a newspaper. S.D. Codified Laws § 21-48-6.
South Dakota law gives certain servicemembers extra protections in foreclosure proceedings. It does this by extending the legal protections provided under the federal Servicemembers Civil Relief Act to members of the South Dakota National Guard ordered to active duty service by the Governor of the State of South Dakota or the President of the United States. S.D. Codified Laws § 33A-2-9. (Learn more about the Servicemembers Civil Relief Act.)
“Reinstating” is when you catch up on the defaulted mortgage's missed payments (plus fees and costs) in order to stop a foreclosure. (Learn more about reinstatement to avoid foreclosure.)
Right to reinstate in a nonjudicial foreclosure. South Dakota law does not provide a borrower with the right to cure the default and reinstate the loan before the foreclosure sale in a nonjudicial foreclosure. However, the mortgage contract may provide the borrower with the right to reinstate.
Right to reinstate in a judicial foreclosure. The borrower does get the right to reinstate the mortgage loan before the sale in a judicial foreclosure.
If the borrower pays the amount due before the court enters judgment, the court will dismiss the foreclosure action. If the borrower pays the amount due before the sale, the court will stay (postpone) the foreclosure action until the borrower defaults again. S.D. Codified Laws § § 21-47-8, 21-47-10.
In some states, you can redeem (repurchase) your home within a certain period of time after the foreclosure. Under South Dakota law, you’ll get one year, 180 days, or 60 days to redeem the home after the foreclosure, depending on the circumstances.
In general, the borrower gets one year to redeem the home after the foreclosure sale. S.D. Codified Laws § 21-52-11.
However, if the mortgage is a short-term redemption mortgage, the redemption period is 180 days after the purchaser from the foreclosure sale records a certificate of sale in the land records. S.D. Codified Laws § 21-49-30, § 21-52-11. If the homeowner abandons the home (leaves the property for good), the purchaser can ask the court to reduce the redemption period to 60 days. S.D. Codified Laws § 21-49-13(8), § 21-49-38. (To get details on redemption after a foreclosure in South Dakota, see Nolo’s article If I lose my home to foreclosure in South Dakota, can I get it back?)
When the total mortgage debt exceeds the foreclosure sale price, the difference is called a “deficiency.” Some states allow the lender to seek a personal judgment (called a “deficiency judgment”) against the borrower for this amount, while other states prohibit deficiency judgments with what are called anti-deficiency laws.
South Dakota law allows the lender to get a deficiency judgment after a nonjudicial foreclosure. If the lender purchases the property, the amount of the deficiency is limited to the difference between the total debt and the property’s fair market value. S.D. Codified Laws § 21-48-14.
Deficiency judgments are also allowed in judicial foreclosures. The deficiency judgment amount will generally be the total debt minus the foreclosure sale price, though the court will consider the property’s value when setting the amount of the deficiency. S.D. Codified Laws § 21-47-16. (For a summary of the deficiency law in South Dakota, see South Dakota Laws on Post-Foreclosure Deficiency.)
If the foreclosed homeowner doesn't leave the home after the redemption period, the purchaser must give a three-day notice to quit (leave) before initiating an eviction action. S.D. Codified Laws § § 21-16-1, 21-16-2.