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American College of Mortgage Attorneys — Partner with the Best®

Formed in 1974, the American College of Mortgage Attorneys (ACMA) is comprised of over 500 lawyers in North America who are experts in mortgage law.

United States

South Dakota

SECURITY INSTRUMENT USED

A Mortgage (or an assignment of mortgage) must include the name and post office address of the mortgagee (or assignee), the name of the mortgagor, a legal description of the property, the amount of the mortgage, and when the mortgage is due. SDCL &sect;&nbsp;7-9-7. Any document presented for recording with the Register of Deeds shall contain a typed, stamped or printed legend stating the words, “Prepared by,” followed by the preparer's name, address, and telephone number. SDCL &sect;&nbsp;7-9-1. Any instrument presented for recording shall be presented on white paper of not less than 20-pound weight. The instrument shall have a minimum of a 1” margin on all pages except for on the top of the first page, which shall have a minimum of a 3” margin. A title shall be prominently displayed at the top of the first page below the 3” top margin. The “Prepared by” legend and information shall be typed in the upper left-hand corner of the first page within the 3” top margin. No information other than as specified shall be within the required margins. Type can be no less than 10 point and must be in black ink. SDCL &sect; 43-28-23. Neither witnesses nor corporate seal are required. A corporate seal or corporate acknowledgment attached to a document executed by any officer is prima facie evidence that such officer was duly authorized to execute such instrument on behalf of such corporation. SDCL &sect; 43-28-8. A Power of Attorney to execute a mortgage must be in writing, acknowledged, and recorded with the appropriate county Register of Deeds. SDCL 44-8-2. The following individual acknowledgment is required: SDCL &sect;&nbsp;43-28-8; SDCL &sect;&nbsp;18-5-8. State of __________&nbsp;&nbsp; : County of _________ : On this the ______ day of _________, 20__, before me, the undersigned officer, personally appeared _________________, known to me or satisfactorily proven to be the person whose name is subscribed to the within instrument and acknowledged that he/she executed the same for the purposes therein contained. In witness whereof, I hereunto set my hand and official seal. _____________________________________ Notary Public, ________________(State)

RECORDING REQUIREMENTS

My Commission Expires: ________________ The form for certificate of acknowledgment by an entity is as follows: SDCL &sect;&nbsp;43-28-8; SDCL &sect;&nbsp;18-5-9. State of __________&nbsp;&nbsp; : County of _________ : On this the ______ day of _________, 20__, before me, the undersigned officer, personally appeared _________________, who acknowledged Him/Herself to be the ______________ of _______________________, a ____________________, and that he/she, as such ___________ being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the __________________ by Him/Herself as ______________________. In witness whereof, I hereunto set my hand and official seal. _____________________________________ Notary Public, ________________(State)

My Commission Expires

My Commission Expires: ________________

South Dakota has adopted the Uniform Real Property Electronic Recording Act. SDCL 7-9A. The electronic recording commission promulgated rules for the electronic recording with county register of deeds offices. South Dakota Administrative Rules 22:03:01. SDCL 7-9A does not require that a register of deeds adopt the process of recording electronic documents. SDCL &sect; 7-9-2.

UNIFORM REAL PROPERTY ELECTRONIC RECORDING ACT

Homestead exemption. SDCL &sect; 43-31-1.

STATUTES TO BE WAIVED

Borrower has right to require judicial foreclosure if lender has begun foreclosure by advertisement. SDCL &sect; 21-48-9.

UNUSUAL TREATMENT OF STANDARD PROVISIONS

A lien document containing a written provision securing the repayment of future advances, whether or not the lien creditor is obligated to make such future advances, has priority over all subsequent encumbrances to the extent of all sums advanced, with interest thereon, with the same effect as if the entire sum had been advanced at the time of the creation of the lien. SDCL &sect; 44-1-13.

SECURING FUTURE ADVANCES

SECURING ADDITIONAL ADVANCES TO PROTECT THE COLLATERAL: INCLUDING PAYMENT OF TAXES AND INSURANCE: Allowed if expressly provided for in mortgage. SDCL &sect; 44-8-3.

SECURING ADDITIONAL ADVANCES TO PROTECT THE COLLATERAL INCLUDING PAYMENT OF TAXES AND INSURANCE

TRUSTEE UNDER DEED OF TRUST

(1)&nbsp; Nonjudicial (advertisement): Available if recorded mortgage contains power of sale. SDCL &sect;&nbsp;21-48-1, SDCL &sect;&nbsp;21-48-2. Notice published at least once each week for 4 consecutive weeks preceding sale. SDCL &sect;&nbsp;21-48-6. At least 21 days prior to the date set for sale, the foreclosing creditor shall serve a written copy of the notice of foreclosure sale on the mortgagor and any lien holder or encumbrancer whose interest in the property being foreclosed would be affected by the foreclosure. SDCL &sect; 21-48-6.1. Deficiency judgment may be taken after sale. SDCL &sect;&nbsp;21-48-14. (2)&nbsp; Nonjudicial (voluntary): Requires mutual written agreement of the mortgagor and mortgagee with an attached “Disclosure and Notice of Cancellation” form. A jointly executed document stating that the mortgagor and mortgagee have elected to follow the alternative voluntary foreclosure procedures shall be filled with the register of deeds. SDCL &sect;&nbsp;21-48A-1. A junior lien holder may commence a judicial foreclosure if commenced before redemption period provided in SDCL &sect; 21-48A-1.. SDCL &sect;&nbsp;21-48A-4. (3)&nbsp;Judicial foreclosure (action): Usual procedure for commercial mortgages. SDCL &sect;&nbsp;21-47, SDCL &sect;&nbsp;21-49. Typical length of procedure: 9 months from service of the Complaint to date of sale if foreclosure is contested. There have been no statutory or procedural changes in South Dakota related to recent national foreclosure litigation. The South Dakota Supreme Court has affirmed a summary judgment on the right to foreclosure where the foreclosing party provided a properly endorsed bearer note, the mortgage, evidence of borrower's signature on the documents, and affidavits indicating default. The court noted that pursuant to SDCL 57A-3-301, the UCC as enacted in South Dakota (SDCL &sect;&nbsp;57A-3-301), ownership is not required in order to enforce an instrument. Ocwen Loan Servicing v. Elliot, 851 N.W.2d 727 (SD 2014)

BRIEF DESCRIPTION OF PROCEDURE

One year from the date of sale (unless it is a 180-day redemption mortgage). SDCL &sect;&nbsp;21-52-11. Upon payment of certain specified amounts the redemption period may be extended for 1 year from the end of the first redemption period. SDCL &sect;&nbsp;21-52-13. The redemption period may be 180 days on property consisting of not more than 40 acres if the mortgage so provides and otherwise meets the requirements of SDCL &sect;&nbsp;21-49. SDCL &sect;&nbsp;21-49-11, SDCL &sect; 21-49-12.. In such case, the redemption period commences on the date the Certificate of Sale is recorded and is not subject to extension. SDCL &sect; 21-49-30. The amount required to redeem is the purchase price plus sums paid by the purchaser to protect its interest in the property for items such as taxes, insurance, maintenance expenses, and payments on a superior lien, together with interest on the total judgment at the rate provided in the mortgage (180-day redemption mortgage) or interest at the legal rate (1-year redemption mortgage), which presently is 10%. SDCL &sect;&nbsp;21-49-34; SDCL &sect;&nbsp;21-52 14; SDCL &sect;&nbsp;54-3-5.1; SDCL &sect;&nbsp;54-3-16.

REDEMPTION PERIOD AND PRICE

A waiver of the right of redemption in the mortgage is unenforceable. SDCL &sect; 44-1-8. The redemption period in a 180-day redemption mortgage may be reduced to 60 days upon proof that the property has been abandoned. SDCL &sect;&nbsp;21-49-38. In a nonjudicial voluntary foreclosure the mortgagor waives his right of redemption and junior lienholders have 60 days to exercise their right of redemption. SDCL &sect;&nbsp;21-48A-1.

WAIVER OF REDEMPTION; REDUCTION OF REDEMPTION PERIOD

In a nonjudicial foreclosure, if the lender is the purchaser at the foreclosure sale, the lender must first establish to the satisfaction of the Court in which an action for a deficiency judgment is pending that the property sold at the foreclosure sale for at least its true market value. In such case, the court may award a deficiency on the difference between the true market value of the property at the time of such sale and the amount of the indebtedness. SDCL &sect; 21-48-14. In a judicial foreclosure, the court must establish the value of the property prior to the entry of the judgment. If the value so established is less than the indebtedness, the lender may bid the established value. Following the sale the lender is then entitled to an execution for any deficiency. SDCL &sect; 21-47-16.

DEFICIENCIES

If relying on the statute for recovery of attorney fees, attorney fees are permitted when there is a successful foreclosure—not simply when there is a foreclosure action. An intervenor was not entitled to attorney fees under SDCL &sect; 15-17-38, which authorizes attorney fees on foreclosures, in mortgagee's mortgage foreclosure action, because there was not a successful foreclosure, only a foreclosure action. Plains Com. Bank, Inc. v. Beck, 986 N.W.2d 519, 534 (S.D. 2023), reh'g denied (Mar. 29, 2023).&nbsp; If relying on contractual provisions in the mortgage or other loans documents, recovery will depend on the scope of the contractual provision.

RECOVERY OF ATTORNEY FEES

Unless consented to by the lender, junior leases may be terminated by foreclosure. Leases for which the lender had either constructive or actual notice prior to the date of the mortgage survive a foreclosure.

EFFECT OF FORECLOSURE UPON LEASES

There are no restrictions on interest or fees that may be charged, unless a maximum interest rate or fee is specifically established elsewhere in the code. SDCL &sect; 54-3-1.1. See, for example, SDCL &sect; 54-4-44 and SDCL &sect; 54-4-44.1 prohibiting interest in excess of 36% for licensed money lenders. See MONEY LENDING below.

USURY CEILING

USURY EXEMPTIONS

Article 9 - Secured Transactions: Revised Article 9 was adopted. Various amendments have been adopted including 2010 amendments effective July 1, 2013.

FINANCING STATEMENTS

If the local law of this state governs perfection, then the location of filing is in the office of the Secretary of State except when the collateral is as-extracted collateral, timber to be cut, or the financing statement is filed as a fixture filing and the collateral is goods that are or are to become fixtures. In regard to all such exceptions, the proper place to file is in the office of the register of deeds in the county of the related real property. Financing statements covering interests in collateral, including fixtures, for a transmitting utility are filed in the Office of the Secretary of State. SDCL &sect; 57A-9-501.

LOCATIONS FOR FILING

A mortgage is effective, from the date of recording, as a financing statement filed as a fixture filing or as a financing statement covering as extracted collateral or timber to be cut only if: (1) the record indicates the goods or accounts that it covers; (2) the goods are or are to become fixtures related to the real property described in the record or the collateral is related to the real property described in the record and is as-extracted collateral or timber to be cut; (3) the record satisfies the requirements for a financing statement but the record need not indicate that it is to be filed in the real property records and the record sufficiently provides the name of the debtor who is an individual if it provides the individual name of the debtor or the surname and first personal name of the debtor and (4) the record is recorded. SDCL &sect; 57A-9-502(c).

SECURITY INSTRUMENT AS FIXTURE FILING

UNUSUAL PROVISIONS OR REQUIREMENTS

A guarantor is exonerated except so far as he may be indemnified by the principal if by any act of the creditor, without the guarantor's consent, the principal's original obligation is altered in any respect or the creditor's remedies or rights against the principal in respect thereto are in any way impaired or suspended. SDCL &sect;&nbsp;56-1-22. If the mortgage holder bids the full amount of the indebtedness at the foreclosure sale, the debt is satisfied in full, and guarantor obligations relating to that indebtedness are extinguished. The mortgage holder does not have any further claim against guarantors even though, upon obtaining the property at the end of the redemption period, the proceeds from the sale of the property are less than the amount of the original indebtedness. First Dakota National Bank v. Graham, 864 N.W.2d 292 (S.D. 2015).

SPECIAL PROBLEMS IN ENFORCEMENT OF GUARANTY

Foreclosure of the mortgage results in satisfaction of the secured indebtedness except to the extent a deficiency is established. See section on Deficiencies above. Suit on the indebtedness may be commenced without foreclosing the mortgage. SDCL &sect;&nbsp;21-47-4; SDCL &sect;&nbsp;21- 49-18. In such case, the mortgage may be later foreclosed if any part of the judgment remains unsatisfied. SDCL &sect;&nbsp;21-47-5; SDCL &sect;&nbsp;21-49-19.

ISSUES AND GUIDELINES RELATED TO SEEKING/OBTAINING DEFICIENCY JUDGMENTS

Foreclosure can be commenced only within 15 years after the cause of action has accrued or within 15 years after the last payment under the contract or bond shall have become due and payable. SDCL &sect;&nbsp;21-51-1; SDCL &sect;&nbsp;15-2-7. The cause of action shall be deemed to have accrued on the date of maturity stated in the mortgage or if no maturity date can be determined from the mortgage, from the date of the mortgage.. SDCL &sect;&nbsp;15-2-5.

STATUTE OF LIMITATION PERIOD

File a certificate signed by the mortgagee acknowledged as prescribed by the statutes relating to recording fully stating the name of the mortgagor and the mortgagee, the date of the mortgage, the date, county, state, book and page of record of the mortgage, description of the mortgaged premises released and that the same are fully and completely released from all lien of the mortgage. SDCL. &sect;&nbsp;44-8-14.

REQUIREMENT FOR RELEASE OF LIEN

The homestead is absolutely exempt from judicial sale except that the homestead exemption may be waived in a mortgage. SDCL &sect;&nbsp;43-31-1; SDCL &sect;&nbsp;43-45-3. If mortgagor is married, the spouse must join in the mortgage. SDCL &sect; 43-31-17.

HOMESTEAD ISSUES

South Dakota is not a community property state.

COMMUNITY PROPERTY

MORTGAGE TAX

DOCUMENTARY STAMP TAX

No transfer tax applies on the assignment of a mortgage. A real estate transfer fee of 50&cent; for each $500 of value is imposed upon the transfer of title to real property, which shall be paid by the grantor. SDCL &sect;&nbsp;43-4-21.

TRANSFER TAX

ENFORCEABILITY OF AGREEMENTS AS TO CHOICE OF LAW

An agreement in the mortgage by which the mortgagor consents to the appointment of a receiver during foreclosure or during the period of redemption is unenforceable. In a foreclosure by action the court may appoint a receiver if authorized by law. SDCL &sect;&nbsp;44-8-7. A receiver may be appointed by the court in which the action is pending for foreclosure of a mortgage where it appears that the mortgaged property is in danger of being lost, removed, or materially injured or that the conditions of the mortgage have not been performed and that the property probably is insufficient to discharge the mortgage debt. SDCL &sect;&nbsp;21-21-2. For a 180-day redemption mortgage, the mortgage may provide that in the case of foreclosure, that the holder of the mortgage is authorized to appoint a receiver to take possession of the mortgaged premises, if the premises are abandoned, or to have a receiver appointed by the circuit court upon sufficient proof being established therefor. SDCL &sect;&nbsp;21-49-13(3).

RECEIVERSHIP

ANY PROHIBITION OR SPECIAL RULES REGARDING LOAN APPLICATION, LOAN FEES OR COMMITMENT FEES

<ol start="13">
 <li> MORTGAGE LENDER/MORTGAGE BROKERAGE/MORTGAGE BROKER AND MORTGAGE LOAN ORIGINATOR: No person may act as a mortgage lender, mortgage brokerage, mortgage broker, or mortgage loan originator in this state or use the title, mortgage lender, mortgage brokerage, mortgage broker or mortgage loan originator with respect to any property located in South Dakota without ﬁrst obtaining and maintaining a license. Each person shall be licensed or registered and maintain a unique identifier through the nationwide mortgage licensing system and registry. SDCL &sect;&nbsp;54-14-13. Any license expires December 31 following its issuance. SDCL &sect; 54-14-18. Fees are set by rules of the Banking Commission. The fee for the license shall be renewed annually and the fee is set by the rules of the State Banking Commission, not to exceed $500 for a mortgage brokerage or mortgage broker, $1,000 for a mortgage lender and $250 for a mortgage loan originator. SDCL &sect;54-14-16. Exempt from the requirements of SDCL &sect;&nbsp;54-14 are nonproﬁt corporations formed pursuant to SDCL &sect;&nbsp;47-22, nonproﬁt U.S. Treasury Community Development Financial Institutions, Small Business Administration Certiﬁed Development Companies, Regional Revolving Loan Funds, or any commercial club, chamber of commerce, or industrial development corporations formed pursuant to South Dakota statute, state banks and their subsidiaries, national banks and their subsidiaries, bank holding companies and their subsidiaries, any other federally insured financial institution, its holding company and subsidiaries, any South Dakota chartered trust company, and any registered mortgage loan originator, if acting for a depository institution. SDCL &sect;&nbsp;54-14-20 and SDCL &sect;&nbsp;54-14-21. The requirements of SDCL &sect;&nbsp;54-14 also do not apply to any person who originates, sells, or services 5 or fewer nonresidential mortgage loans in a 12-month period if the total amount of the loans does not exceed $4 million. SDCL &sect;&nbsp;54-14-13, SDCL &sect;&nbsp;54-14-20.1. Persons exempt from SDCL &sect;&nbsp;54-14 shall file a report with the Division of Banking no later than December 31 for any year in which business was conducted in the state containing information required by statute. SDCL &sect;&nbsp;54-14-13.</li>
 <li> MONEY LENDING: Any person who engages in the business of lending money shall obtain a license. SDCL &sect;&nbsp;54-4-52. The license shall be renewed annually and the fee is set by the rules of the State Banking Commission, not to exceed $1,000. SDCL &sect;&nbsp;54-4-45. Exempt from the licensing requirement are state and national banks and their subsidiaries, bank holding companies and their subsidiaries, other federally insured financial institutions and their holding companies and subsidiaries, and South Dakota chartered trust companies. SDCL &sect;&nbsp;54-4-37. Also exempt from the requirements of SDCL 54-4 is any person who originates, sells, services, or acquires 5 or fewer loans in a 12-month period as long as the total amount of the loans outstanding does not exceed $4 million. Any person exempted shall report to the Division of Banking with information required by statute. SDCL &sect;&nbsp;54-4-37.1 Also exempt are seller-financed transactions for the sale of assets to a purchaser or any seller-financed transaction for the sale of real estate through a contract for deed. SDCL &sect; 54-4-36(2).</li>
 <li> TAX ON INCOME OF BANKS AND FINANCIAL INSTITUTIONS: South Dakota levies an annual tax on ﬁnancial institutions doing business in the state. SDCL &sect; 10-43-2. Entities exempt from, and those licensed under, SDCL &sect;&nbsp;54-4 and 54-14 discussed above are subject to the tax levied under SDCL &sect;&nbsp;10-43. The tax is based on the net income assignable to South Dakota at the rate of 6% on net income of $400 million or less, with lesser rates on income in excess of that amount. SDCL &sect; 10-43-4. The definition of net income, items of taxable income and subtractions from taxable income are set out in the statutes. Such tax is in lieu of all other taxes and licenses, except taxes on real property and retail sales and use taxes. SDCL &sect; 10-43-5.</li>
</ol>

LENDER QUALIFICATION AND LICENSURE

South Dakota does not have specific provisions or regulations for modification of existing mortgage loans.

MODIFICATIONS OF EXISTING MORTGAGE LOANS

A perfected security interest in fixtures has priority over a conflicting interest of an encumbrancer or owner of the real property if the security is created in a manufactured home in a manufactured-home transaction, and is perfected pursuant to a certificate of title statute under which indication of a security interest on the certificate of title is required as a condition of perfection. SDCL &sect;&sect;&nbsp;57A-9-334(e)(4); SDCL &sect;&nbsp;57A-9-311(a)(2). Except as otherwise provided in SDCL &sect;&nbsp;57A-9-515(e)-(g), an initial financing statement filed in connection with a manufactured-home transaction is effective for 30 years after the filing date if it indicates that it is filed in connection with a manufactured-home transaction. SDCL &sect;&nbsp;57A-9-515(b).

PERFECTING A SECURITY INTEREST IN A MANUFACTURED HOME

Pursuant to SDCL &sect;&nbsp;34A-12-13, corrective action costs expended under certain environmental statutes constitute a lien on all property owned by the responsible person when a notice of lien is filed with the register of deeds in the county in which such property is located. The notice of lien shall contain a description of the property of the responsible person upon which the lien is made, a description of the property upon which corrective action or remedial efforts were made, and a statement of the corrective action costs expended from the response fund. Upon entry, the lien shall attach to all real property of the responsible person. The lien has priority over all other claims or liens on the property except those that had been perfected prior to the filing of the notice of lien. South Dakota provides a procedure to obtain a lien for corrective action costs of livestock discharge cleanup in SDCL &sect; 34A-2B.. All corrective action costs expended pursuant to SDCL &sect;&nbsp;34A-2B-10 constitute a lien on the property where the discharge occurs when a notice of lien is filed with the register of deeds in the county in which the property is located. The notice of lien shall contain a description of the property of the responsible person upon which the lien is made, a description of the property from which the discharge requiring corrective action or emergency remedial efforts occurred, and a statement of the corrective action costs expended from the environmental livestock cleanup fund. Upon entry, the lien shall attach to all real property of the responsible person. The lien has priority over all other claims or liens on the property except those that had been perfected before the filing of the notice of lien by the Department of Environmental and Natural Resources. No lien may be filed if a responsible person cannot be identified or if negligence was not a factor in the discharge.

ENVIRONMENTAL LIEN LAWS

<ol>
 <li> INCEPTION OF LIEN: Anyone who with proper authority furnishes labor and materials for the improvement of property shall have a lien thereon subject to existing encumbrances. SDCL &sect;&nbsp;44-9-1. No lien shall attach prior to the actual and visible beginning of the improvement (unless the contractor files with the proper office a brief statement of the nature of such contract, which statement shall be notice of his lien for the contract price or value of all contributions to such improvement thereafter made by him or at his instance). SDCL &sect;&nbsp;44-9-8. The lien takes effect from the time the first item of material or labor is furnished upon the premises by the lien claimant. SDCL &sect;&nbsp;44-9-7. All mechanics liens for a specific project have a priority from the date of the first lien for that project. The lien ceases at the end of 120 days after completion of the last of such work unless within such period a statement of claim therefor is filed with the register of deeds of the county in which the improved premises are located. SDCL &sect;&nbsp;44-9-15. The same statutes apply to labor and materials for environmental remediation. Duffield Const., Inc. v. Baldwin, 679 N.W.2d 477 (S.D. 2004).</li>
 <li> PRIORITY AS TO REMOVABLE FIXTURES: The lien attaches to appurtenances to the real estate the same as the real estate.</li>
</ol>

LABOR AND MATERIAL LIENS

<ol>
 <li> FORM USUALLY REQUIRED BY LENDER: ALTA Loan Policy (6-17-06)</li>
 <li> ENDORSEMENTS: Most endorsements available. Endorsements typically required by lenders:</li>
</ol> Comprehensive Zoning Survey Access Location Environmental &nbsp;

South Dakota

Mortgage Law Summary

Continue reading the
Mortgage Law Summary for South Dakota

South Dakota

Mortgage Law Summary

Continue reading theMortgage Law Summary for South Dakota

Continue reading the
Mortgage Law Summary for South Dakota