SD Underwriting Summary

SD Uniform Title Standards

Search/Exam

• Minimum Search Requirements SDCL 43-30-1: 22 years, Marketable Title Act.
• Plant or other search restrictions -- Plant Required in each county. SDCL 36-13-10
• Special Searches Required (Code, HOA, Utilities)? *Survey Requirements c) Surveys are typically only used in commercial transactions and paid for by whoever wants it, or if the lender requires, then by the borrower.
  • Purchase – not on platted residential
  • Refinance – not required
• Title policy must be countersigned by SD licensed abstractor. SDCL 58-25-16

Vesting

• SDCL 25-2-3 A husband and wife may hold real or personal property together as joint tenants or tenants in common.

• Types of deeds include Warranty, Limited Warranty and Quit- Claim Deeds. There are no deeds that are generally not insurable.
• Joint Tenancy Recognized
• Tenants by Entirety & Community Property not recognized in SD.

Property Tax

Paid in arrears; Taxes due January 1 but not delinquent if pay half by May 1 and remaining half by October 1.

Mortgage/Transfer Tax

• Mortgage tax in South Dakota: None
• Deed tax in South Dakota is $.50 per $500.00. SDCL 43-4-21, Seller pays
• No Withholding requirements similar to FIRPTA

Spousal Joinder Requirements/Homestead

• SDCL 25-2-4: Neither spouse has any interest in the property of the other except can’t be kept out of the dwelling.
• SDCL 25-2-6: The separate property of a spouse is not liable for the debts of the other spouse contracted before or after the marriage.
• SDCL 25-2-7: Homestead conveyed by both.
• All other respects property titled to only one spouse is treated as solely owned. No spousal consent required SDCL 23-2-8
• When a conveyance has been recorded and no spouse has joined therein, evidence should be required that the grantor was unmarried at the time of the execution of the conveyance or if married, that the premises conveyed did not constitute the grantor's homestead and that neither the grantor nor any member of the grantor's family reside thereon should be considered sufficient evidence. Title Standard 5-01.
• If the description of the marital status of the grantor has been omitted from either the body of the instrument or the certificate of acknowledgment and if the instrument has existed of record for more than twenty years with no action commenced, then it is not necessary to correct the record in order to make the title marketable. Title Standard 5-04

• Homestead in SD may be conveyed by separate instruments signed by respective spouses. Title Standard 5-07

Power Of Attorney

• Real estate aspects of the use of a Power of Attorney are set forth in SDCL 43-30S-5.18 to 5.22. Recording required prior to use.

• Title Standard calls into question use of Power of Attorney by spouse to convey homestead property – unless the POA expressly authorizes use with Homestead. Title Standard 5-06

Foreclosure Review

South Dakota allows a non-judicial foreclosure. The lender serves the borrower a notice of sale at least 21 days before the sale date and publishes the notice in a newspaper once a week for four weeks. (S.D. Codified Laws § 21-48-6.1, § 21-48-6). Then the lender can sell the property at a foreclosure sale.

There is a right to convert a non-judicial foreclosure to a judicial or to seek a judicial foreclosure from the outset.

South Dakota law also contemplates a "nonjudicial voluntary foreclosure," which is similar to a deed in lieu of foreclosure. In a nonjudicial voluntary foreclosure, the borrower deeds the property to the lender and, in exchange, the lender agrees to forfeit the right to seek a deficiency judgment. Also, the borrower agrees to give up the right to redeem the home. (S.D. Codified Laws § 21-48A-1).

Redemption Period

• Generally, foreclosed homeowners in South Dakota get one year to redeem the property after a foreclosure sale. (S.D. Codified Laws § 21-52-11).
• If the mortgage is a short-term redemption mortgage, the redemption period is 180 days after the person or entity who bought the property at the foreclosure sale records a certificate of sale in the land records. (S.D. Codified Laws § 21-49-30, § 21-52-11). (Short-term redemption should be spelled out in the loan paperwork.)
• If the borrower abandons the property, the new owner can ask the court to reduce the redemption period to 60 days. (S.D. Codified Laws § 21-49-13(8), § 21-49-38).

Limitation on Deficiency Judgments

The lender can get a deficiency judgment after a nonjudicial foreclosure, if the lender buys the home at the foreclosure sale, the amount of the deficiency is limited to the difference between the borrower’s total debt and the home’s fair market value. (S.D. Codified Laws § 21-48-14). In a judicial foreclosure, the court will consider the property’s value when deciding whether a deficiency exists. (S.D. Codified Laws § 21-47-16).

Who May Serve As Trustee On Deed Of Trust

South Dakota is a mortgage state.

Time Limitations

• US Judgment Liens 20 years, renewable for 20 years

• State Court Judgment Liens

• Federal Tax Liens 10 years (+30 days); can be refiled

• State Tax Liens

• Estate Tax Lien Federal 10 years

• State Inheritance Tax Liens

• Mechanics Liens

• Financing Statements 5 years

• Mortgages

• HOA Liens

• Condominium assessments

Odd Stuff

• DANGER AREA - Non-US citizen/Alien ownership of Agricultural Lands in excess of 160 acres is restricted SDCL 43-2A. Agricultural Property acquired by devise or descent must be sold within three years.

• Cancellation/Commitment fee is permitted in South Dakota

• Title Company can release mortgages, but note that the limit is for mortgages of $500,000 or less. SDCL 44-8-30 to 44-8-35.

• Usury Coverage is available. There are no restriction on interest rates, SDCL 54-3-1.1. Regulated lenders are exempt from all rate limitations, SDCL 54-3-13. Regulated lenders are defined as any institutional lender, SDCL 54-3-14.

• South Dakota recognizes Purchase Money Mortgage priority over existing liens against the BUYER. South Dakota (Priority of mortgage recognized: Hoffman v. Kleinjan, 224 N.W. 187 (S.D. 1929))