Security deposits in South Dakota are regulated by South Dakota Codified Laws § 43-32-1 to § 43-32-37. Certain municipalities may have local laws that supplement state regulations. To ensure full compliance, verify the regulations applicable in your area.

Maximum Security Deposit

South Dakota state law generally limits security deposits to one month’s rent. A larger deposit may be mutually agreed upon, however, where special conditions pose a danger to the maintenance of the premises.

Holding & Interest Requirements

Holding Requirements: South Dakota state law does not currently require security deposits to be held in a bank account within the state, in a separate account, or in an interest-bearing account.

Interest on Deposits: South Dakota state law does not currently require landlords to pay interest to tenants on security deposits.

Information Provided to Tenant: South Dakota state law does not currently require landlords/property managers to disclose where the security deposit is held.

Deposit Refunds

Timeline: Within 14 days of vacancy and receipt of the tenant’s mailing address or delivery instructions, the landlord/property manager must either (1) return the full security deposit to the tenant, or (2) provide the tenant with a written statement of any deductions to the security deposit, together with the portion of the security deposit being returned. Upon the tenant’s request, the landlord/property manager must provide an itemized accounting of any security deposit withheld within 45 days of the termination of the tenancy. 

Permissible Deductions: Landlords/property managers may deduct the following from security deposit funds:

• Unpaid rent
• Costs to clean or restore the unit to its condition at the start of the tenancy
• Other lawful charges due under the lease

Documentation of Deductions: The written statement of deductions must specify the landlord/property manager’s reasons for withholding the security deposit or any portion thereof.

‍Penalties for Violations: Failure to return the security deposit or provide the written statement of deductions as required by South Dakota state law may result in the landlord/property manager being liable for the full amount of the security deposit, punitive damages up to $200, and attorney’s fees and court costs if the tenant wins in a lawsuit. In addition, if the landlord/property manager unlawfully removes or excludes the tenant from the premises or willfully diminishes services to the tenant by interrupting electric, gas, water, or other essential services, the tenant may recover the full security deposit.