State Foreclosure Law Library

south-dakota

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South Dakota — Tax & Mortgage Foreclosure

Legal information, not legal advice. Verify against the cited primary sources before acting. Last verified: 2026-06-01.

South Dakota is a tax-certificate (tax-lien) state whose back-end was reformed in 2024 by HB 1090 to comply with tyler-v-hennepin-county. When real-property taxes go delinquent, the county treasurer offers a tax certificate for each parcel at a public sale and the certificate is struck off to the bidder offering the lowest rate of interest (a bid-down-interest auction), with 10% per year the statutory maximum valid bid (SDCL 10-23-8). Critically, since July 1, 2006 most counties no longer sell certificates to private investors at all — unless the board of county commissioners adopts a resolution waiving the prohibition, the county itself is the holder of the tax certificate (SDCL 10-23-28.1). A certificate holder (county or private) may begin proceedings to procure a tax deed only after three years from the date of the tax-certificate sale, and within six years of it (SDCL 10-25-1). Before a deed can issue, the holder must serve a notice of intention to take tax deed on the owner of record, the occupant, the person in whose name the property is taxed, and recorded mortgagees/lienholders (SDCL 10-25-2 through 10-25-7); the right of redemption does not expire until 60 days after the affidavit of completed service is filed (SDCL 10-25-8). Redemption is made by paying the certificate amount plus interest at the bid rate and subsequent taxes with like interest (SDCL 10-24-1).

The historically important change is on the equity / surplus side. Pre-2024, South Dakota was on the national “equity theft” list — the county (or assignee) took a tax deed and kept the entire value of the property, returning no surplus to the former owner. HB 1090 (SL 2024, ch 38, effective Feb. 12, 2024) now requires that whoever acquires a tax deed must sell the property: a county must declare it surplus and sell it (public auction under ch. 6-13, or by broker) within one year (SDCL 10-25-39.1), and any non-county tax-deed holder must likewise sell it at public auction within one year (SDCL 10-25-39.2). After expenses, taxes, penalty, interest, county liens and costs are paid, any surplus must be returned to the prior owner of record; if the owner cannot be found within 180 days, the surplus goes to the Unclaimed Property Division under ch. 43-41B (SDCL 10-25-39, as amended by SL 2025 ch 49). That makes South Dakota reformed_post_Tyler / compliant for tax foreclosures occurring after the 2024 effective date.

Mortgage debt is foreclosed either judicially (Title 21, Ch. 47) or non-judicially by advertisement (Title 21, Ch. 48), with a post-sale redemption period of one year in the ordinary case (180 days for a “short-term redemption mortgage”; reducible to 60 days for abandoned property) (SDCL 21-52-11, 21-49-30, 21-49-13(8)). Deficiency judgments are allowed but subject to a fair-market- value offset when the mortgagee is the purchaser (SDCL 21-48-14 for advertisement; SDCL 21-47-16/-17 for judicial).

0. Identity & Classification

  • Recording unit: county (count: 66 counties). [Source: general knowledge of SD’s 66 counties — official count cite flagged in needs_verification.]
  • Tax sale type: tax-lien / tax certificate, converting to a tax deed after the redemption period. The county is the default certificate holder post- 2006 unless a county waives the bar (SDCL 10-23-28.1). [Source: sdlegislature.gov — SDCL 10-23-8, 10-23-28.1]
  • Tax foreclosure process: administrative — the county treasurer issues the tax deed after the statutory notice-of-intention procedure; no court judgment is required to vest title (SDCL 10-25-1, 10-25-8, 10-25-11). A separate quiet-title action clears the deed (SDCL 10-25-24, Title 21 ch. 42). [Source: sdlegislature.gov — SDCL 10-25-1, 10-25-8, 10-25-11]
  • Mortgage foreclosure process: both — judicial (Title 21, Ch. 47) and non-judicial foreclosure by advertisement (Title 21, Ch. 48). [Source: alllaw.com (Nolo) summary citing SDCL 21-47, 21-48]
  • Selling authority: county treasurer (tax certificate sale, redemption, tax deed); county / county commissioners (post-deed surplus auction under SDCL 10-25-39.1); sheriff (judicial foreclosure sale); the party foreclosing by advertisement (Title 21, Ch. 48 sale).
  • Statutory home:
  • Tyler v. Hennepin compliance: reformed_post_Tyler / compliant. HB 1090 (SL 2024, ch 38) added SDCL 10-25-39.1 and 10-25-39.2 (mandatory sale within one year by both county and non-county tax-deed holders) and amended SDCL 10-25-39 to return surplus to the prior owner of record (180-day window, then Unclaimed Property). Before this, SD retained the full value and was listed among “equity theft” states. [Source: sdlegislature.gov — SDCL 10-25-39, 10-25-39.1, 10-25-39.2; mylrc.sdlegislature.gov HB 1090 (2024); Impact for Equity multi-state analysis]

1. Tax Sale Mechanics

  • What is sold: a tax certificate (lien) on the parcel; not the fee. Title passes only later by tax deed if unredeemed (SDCL 10-23-8, 10-25-11). [Source: sdlegislature.gov — SDCL 10-23-8]
  • Bidding method: bid-down interest. The treasurer offers each parcel and the best bid is the lowest rate of interest per year the bidder will accept; “no rate of interest higher than ten percent per year is a valid bid” (SDCL 10-23-8). Post-2006, in non-waiver counties the certificate is simply issued to the county rather than auctioned to investors (SDCL 10-23-28.1). [Source: sdlegislature.gov — SDCL 10-23-8, 10-23-28.1]
  • Interest / penalty: statutory maximum 10% per year on the certificate (the bid rate); the redemption amount carries that bid rate from the date of purchase, and subsequent taxes carry like interest from the date paid (SDCL 10-23-8, 10-24-1). Delinquent-tax interest/penalty is set under Title 10, Ch. 21 (SDCL 10-21-23, 10-21-25 referenced by county treasurers). [Source: sdlegislature.gov — SDCL 10-23-8, 10-24-1; Hutchinson County FAQ for Ch. 21 references]
  • Minimum bid composition: delinquent taxes + penalty + interest + costs (the certificate is offered for the full amount owed; bidders compete on interest rate, not price) (SDCL 10-23-8). [Source: sdlegislature.gov — SDCL 10-23-8]
  • Sale frequency / typical month: annual; tax-certificate sales are held by the county treasurer in connection with the annual delinquency cycle. Exact statutory sale date flagged for verification (county treasurers schedule the public sale).
  • Venue / platforms: county treasurer’s office (in person). South Dakota does not operate a centralized statewide online lien-auction platform; no vendor identified (most counties now simply take the certificate themselves under SDCL 10-23-28.1). [Source: sdlegislature.gov — SDCL 10-23-28.1]
  • Registration & deposit: set by the county treasurer; specific deposit rules flagged for verification (largely moot where the county is the certificate holder).
  • Subsequent taxes (“subs”): a tax-certificate holder may pay later years’ delinquent taxes; those amounts are added to the redemption amount with interest at the same bid rate from the date of payment (SDCL 10-24-1; cf. 10-23-21/-22 on certificate-holder tax payments). [Source: sdlegislature.gov — SDCL 10-24-1]

2. Right of Redemption → see right-of-redemption

  • Pre-sale right: the owner may pay delinquent taxes at any time before the certificate sale; redemption is the operative post-sale right.
  • Post-sale period: three years from the date of the tax-certificate sale during which a deed cannot be sought (SDCL 10-25-1), plus the statutory back-end: even after three years, redemption does not expire until 60 days after the affidavit of completed service of the notice of intention to take tax deed is filed with the treasurer (SDCL 10-25-8). [Source: sdlegislature.gov — SDCL 10-25-1, 10-25-8]
  • Who may redeem: the owner of record, any person in possession, the person in whose name the property is taxed, and mortgagees / lienholders entitled to notice (SDCL 10-24-1, 10-25-3, 10-25-4). Heirs/personal representatives of a deceased owner may redeem (notice runs to them under SDCL 10-25-6). [Source: sdlegislature.gov — SDCL 10-24-1, 10-25-3, 10-25-6]
  • Amount formula: the sum stated in the tax certificate + interest at the bid rate from the date of purchase + subsequent taxes paid by the holder + like interest on those taxes from the date paid, plus statutory costs added before deed (SDCL 10-24-1, 10-25-9). [Source: sdlegislature.gov — SDCL 10-24-1, 10-25-9]
  • Premium to certificate holder: none beyond the bid interest rate (max 10%/yr); South Dakota bids down interest, so the holder earns only the rate it bid.
  • Procedure: the redemptioner pays the county treasurer, who records the redemption on the sales list, issues a receipt, files it with the county auditor, and holds the funds for the certificate holder (SDCL 10-24-1). [Source: sdlegislature.gov — SDCL 10-24-1]
  • Extinguishment: the right ends 60 days after the affidavit of completed service is filed if no redemption is made (SDCL 10-25-8); the treasurer then prepares and delivers the tax deed (SDCL 10-25-11), which is prima facie evidence of the regularity of all proceedings (SDCL 10-25-13). A defective/insufficient notice prevents valid issuance (see Module 6).
  • Special tolling: federal overlays apply — bankruptcy automatic stay and the SCRA can toll/postpone. See bankruptcy-automatic-stay, scra-protections. State-law tolling for minors/incompetents flagged for verification.

3. Surplus / Excess Proceeds → see surplus-funds, third-party-recovery-rules

  • Belongs to: the prior owner of record (post-HB 1090). After the mandatory sale, surplus over the tax debt and costs is returned to the prior owner of record (SDCL 10-25-39). [Source: sdlegislature.gov — SDCL 10-25-39]
  • Claim waterfall (SDCL 10-25-39):
    1. County’s expenses of the tax-deed and sale proceedings;
    2. Taxes, penalty, interest, county liens and other costs, prorated on the most recent year’s tax levies until tax and interest are paid;
    3. Surplus to the prior owner of record;
    4. If the prior owner of record cannot be found within 180 days, surplus is transferred to the Unclaimed Property Division (ch. 43-41B). [Source: sdlegislature.gov — SDCL 10-25-39]
  • Filing venue: the county that conducted the tax-deed sale distributes the surplus (the statute is a return-to-owner mechanism, not an adversarial claim petition); thereafter, South Dakota Unclaimed Property (State Treasurer, cash.sd.gov) under ch. 43-41B. [Source: sdlegislature.gov — SDCL 10-25-39; cash.sd.gov]
  • Claim deadline: the county must locate/return to the prior owner within 180 days of the sale before escheating to Unclaimed Property; after transfer, the owner may reclaim through the Unclaimed Property program (generally no time bar to reclaim once held by the State) (SDCL 10-25-39; ch. 43-41B). [Source: sdlegislature.gov — SDCL 10-25-39]
  • Escheat: surplus unclaimed for 180 days → Unclaimed Property Division under the Revised Uniform Unclaimed Property Act (ch. 43-41B); reclaimable by the owner thereafter through the State program. [Source: sdlegislature.gov — SDCL 10-25-39, ch. 43-41B; cash.sd.gov]
  • Documentation required: proof of identity / prior-owner-of-record status to the county; for Unclaimed Property reclamation, a claim through cash.sd.gov. County- level documentation specifics flagged for verification.
  • Third-party recovery (governs whether a surplus-recovery agent may operate):
    • fee_cap_pct: null — no tax-deed-surplus-specific percentage cap located in Title 10. Once funds are with the State, agreements to recover unclaimed property are regulated under ch. 43-41B (the RUUPA “agreement to locate” / finder provisions). Exact SDCL 43-41B finder-fee cap and timing flagged for verification (RUUPA typically voids agreements made within 24 months of delivery and caps post-window fees, but the SD-enacted text was not directly pulled).
    • licensing_required: no surplus-recovery-specific license identified in Title 10; private-investigator/finder licensing not confirmed (flagged).
    • assignment_of_claim_allowed: the surplus runs to the “prior owner of record”; assignment of an unclaimed-property claim is governed by ch. 43-41B. [Flagged — statute text not directly pulled.]
    • cooling_off_period / contract_disclosure_rules / prohibited_practices: governed by ch. 43-41B’s agreement-to-locate provisions; specific SD text flagged for verification.
    • citation: SDCL 10-25-39 (surplus to owner); ch. 43-41B (unclaimed property).
  • Notice to former owner required? Yes — pre-deed notice of intention to take tax deed must be personally served on the owner/occupant/taxpayer and mailed to recorded mortgagees (SDCL 10-25-2 to 10-25-7); and post-sale the surplus is returned to the prior owner of record (SDCL 10-25-39). [Source: sdlegislature.gov — SDCL 10-25-5, 10-25-39]

4. Mortgage Foreclosure

  • Process: both — judicial foreclosure (Title 21, Ch. 47) and non-judicial foreclosure by advertisement (Title 21, Ch. 48); a foreclosure-by- advertisement may be converted to judicial on demand. [Source: alllaw.com (Nolo) — citing SDCL 21-47, 21-48]
  • Timeline (foreclosure by advertisement):
    • Notice of sale served on the mortgagor at least 21 days before the sale (SDCL 21-48-6.1);
    • Publication of the notice once each week for four successive weeks (SDCL 21-48-6);
    • Sale at public auction. [Source: alllaw.com (Nolo) — citing SDCL 21-48-6, 21-48-6.1]
  • Reinstatement right:
    • Judicial: the borrower may reinstate before judgment (dismisses the action) or after judgment but before sale (postpones it) (SDCL 21-47-8, 21-47-10);
    • Non-judicial (advertisement): no statutory reinstatement right; depends on the mortgage’s contractual terms. [Source: alllaw.com (Nolo) — citing SDCL 21-47-8, 21-47-10]
  • Redemption after sale:
    • Standard: one year after the foreclosure sale (SDCL 21-52-11);
    • Short-term redemption mortgage: 180 days after the certificate of sale is recorded (SDCL 21-49-30, 21-52-11);
    • Abandoned property: court may reduce to 60 days (SDCL 21-49-13(8), 21-49-38). [Source: alllaw.com (Nolo) — citing SDCL 21-52-11, 21-49-30, 21-49-13]
  • Deficiency judgment: allowed, but with a fair-market-value offset.
    • Advertisement: if the mortgagee is the purchaser, it must show the property sold at true market value or more, and any deficiency is reduced by the difference between the sale price and true market value (SDCL 21-48-14);
    • Judicial: the court considers the property’s value and other factors (SDCL 21-47-16, 21-47-17). [Source: sdlegislature.gov — SDCL 21-48-14; alllaw.com (Nolo) — SDCL 21-47-16/-17]
  • Surplus distribution (foreclosure): sale proceeds pay the foreclosing debt, then junior lienors by priority, then the mortgagor (general rule under Title 21, Ch. 48). Exact surplus-distribution section flagged for verification.
  • Sale officer: sheriff (judicial); the foreclosing party / officer conducting the advertisement sale (Title 21, Ch. 48).

5. Sale Procedure Playbooks

Treasurer / tax-certificate & tax-deed procedure → see treasurer-sale

  1. Taxes go delinquent; the county treasurer offers a tax certificate per parcel at public sale, struck off at the lowest interest bid (max 10%/yr) (SDCL 10-23-8). In non-waiver counties (post-2006) the county takes the certificate (SDCL 10-23-28.1).
  2. A certificate holder may pay subsequent taxes, added to the redemption amount with like interest (SDCL 10-24-1).
  3. Owner (or other interested party) may redeem by paying the county treasurer the certificate amount + bid interest + subs + interest (SDCL 10-24-1).
  4. No deed sooner than 3 years and no later than 6 years from the certificate sale (SDCL 10-25-1).
  5. Holder serves the notice of intention to take tax deed — personal service on owner of record, person in possession, and the person taxed; publication (two successive weeks) for others; registered/certified mail to recorded mortgagees/lienholders (SDCL 10-25-2 to 10-25-7).
  6. Holder files an affidavit of completed service with the treasurer; redemption expires 60 days later (SDCL 10-25-8).
  7. Holder pays any prior outstanding tax certificates (SDCL 10-25-10); the treasurer prepares and delivers the tax deed (SDCL 10-25-11), which is prima facie evidence of regularity (SDCL 10-25-13).
  8. Mandatory resale (post-HB 1090): a county declares the property surplus and sells it within one year (auction under ch. 6-13 with 2-publication notice, or by broker) (SDCL 10-25-39.1); a non-county holder must sell at public auction within one year (SDCL 10-25-39.2). Surplus is returned to the prior owner of record (SDCL 10-25-39).
  9. Quiet title to clear the tax-deed title (SDCL 10-25-24; Title 21, Ch. 42).

Sheriff / mortgage foreclosure sale → see sheriff-sale

  1. Lender forecloses judicially (Title 21, Ch. 47) or by advertisement (Title 21, Ch. 48); advertisement requires 21-day mailed notice + 4-week publication (SDCL 21-48-6, 21-48-6.1).
  2. Public sale to the highest bidder; certificate of sale recorded.
  3. Redemption: one year (180 days short-term; 60 days if abandoned) (SDCL 21-52-11, 21-49-30, 21-49-13(8)).
  4. Deficiency with fair-value offset where the mortgagee buys (SDCL 21-48-14).
  • Notice requirements: tax deed — personal service on owner/occupant/taxpayer
    • publication 2 successive weeks + certified mail to mortgagees (SDCL 10-25-5), affidavit of service filed, 60-day redemption tail (SDCL 10-25-8); mortgage advertisement — 21-day mailed + 4-week published notice (SDCL 21-48-6/-6.1). [Source: sdlegislature.gov — SDCL 10-25-5, 10-25-8; alllaw.com — SDCL 21-48-6/-6.1]
  • Upset bid / confirmation: no North-Carolina-style upset bid for tax deeds; the post-deed surplus auction is a one-shot public sale (SDCL 10-25-39.1/.2). Judicial mortgage sales are subject to court confirmation.
  • Payment terms: auction deposit/balance per county notice; advertisement sale is cash to highest bidder.
  • Deed issued: tax deed — conveys title and possessory right (SDCL 10-25-12), prima facie evidence of regularity (SDCL 10-25-13), but no warranty; sheriff’s/officer’s deed on mortgage foreclosure. [Source: sdlegislature.gov — SDCL 10-25-12, 10-25-13]

6. Due Process & Notice → see due-process-notice

  • Standard: South Dakota requires the statutory notice of intention to take tax deed to be given as prescribed before a treasurer may issue a deed; the notice/redemption procedure is the constitutional safeguard, aligning with mullane-v-central-hanover (“reasonably calculated”) and the actual-notice-to-record-mortgagees rule of mennonite-v-adams (SD requires certified/registered mail to recorded mortgagees, SDCL 10-25-5). A tax title taken without a valid proceeding is void and the owner may recover in equity on reimbursing the purchaser’s actual outlay plus interest (Coughlin v. City of Pierre). [Source: sdlegislature.gov — SDCL 10-25-5; vlex — Coughlin, 66 S.D. 523]
  • Required attempts: personal service on the owner of record, person in possession, and person taxed; publication (two successive weeks) for those not personally served; registered/certified mail, return receipt requested, to recorded mortgagees/lienholders (SDCL 10-25-5, 10-25-7); affidavit of completed service filed (SDCL 10-25-8). [Source: sdlegislature.gov — SDCL 10-25-5, 10-25-8]
  • Consequence of defective notice: a tax deed/title resting on an invalid proceeding is treated as void (Coughlin v. City of Pierre; statutory deed is only prima facie, not conclusive, evidence of regularity, SDCL 10-25-13). [Source: vlex — Coughlin, 66 S.D. 523; sdlegislature.gov — SDCL 10-25-13]
  • Leading cases: coughlin-v-city-of-pierre, perry-v-state-department-of-social-security, tyler-v-hennepin-county, mennonite-v-adams, mullane-v-central-hanover, jones-v-flowers. (A modern (post-2000) SD Supreme Court decision squarely on tax-deed notice sufficiency was not located/verified — flagged in needs_verification.)

7. Title & Marketability

  • Deed warranty level: tax deed conveys no warranty; it vests title and a possessory right (SDCL 10-25-12) and is prima facie (not conclusive) evidence of regularity of all proceedings (SDCL 10-25-13). [Source: sdlegislature.gov — SDCL 10-25-12, 10-25-13]
  • Marketable immediately? No in practice — title is clouded until a quiet-title action (SDCL 10-25-24; Title 21, Ch. 42 “Actions to Quiet Tax Title”).
  • Quiet title required? Effectively yes for marketable/insurable title; the county may quiet title via the state’s attorney (SDCL 10-25-24, 10-25-25), and Title 21, Ch. 42 supplies the procedure for private holders. [Source: sdlegislature.gov — SDCL 10-25-24]
  • SOL to challenge deed: 180 days after the tax deed is recorded — no action to recover possession or to avoid the deed (and no defense in a quiet-title action) may be brought after that window (SDCL 10-25-44). [Source: sdlegislature.gov — SDCL 10-25-44]
  • Title insurance availability: generally only after quiet title; insurers typically will not insure a raw tax-deed title. [Industry practice — flagged.]
  • Common defects: insufficient/defective notice of intention or affidavit of service (SDCL 10-25-5, 10-25-8); failure to purchase prior outstanding certificates (SDCL 10-25-10); chain-of-title gaps; surplus not returned (post-HB 1090).

8. Case Law (real, verified)

CaseYearTopicHolding (plain English)Source
coughlin-v-city-of-pierre1939redemption, due_process, sale_procedureA void tax title gives the holder no more than a lien; a former owner seeking equity to set it aside need only reimburse the purchaser’s actual purchase price plus statutory interest, not the full delinquent tax (66 S.D. 523, 286 N.W. 877).https://case-law.vlex.com/vid/coughlin-v-city-of-929880883
perry-v-state-department-of-social-security1946sale_procedure, titleA tax deed vests an estate in fee simple subject to claims the State holds for taxes, liens, or encumbrances (here, old-age-assistance/social-security liens survived the tax deed) (71 S.D. 247, 23 N.W.2d 279).https://www.courtlistener.com/opinion/4126332/perry-v-state-department-of-social-security/
tyler-v-hennepin-county2023surplus, due_processGovernment may not keep surplus equity beyond the tax debt; retention is an unconstitutional taking (598 U.S. 631). South Dakota’s HB 1090 (2024) surplus-return reform (SDCL 10-25-39/.1/.2) was enacted to comply.https://www.supremecourt.gov/opinions/22pdf/22-166_8n59.pdf

Note: Heikkila v. Carver (1985) and Spitzer v. Spitzer (1969) surfaced in searches but are a contract-for-deed decision and an intestacy/deed-delivery decision (tax-sale redemption only tangential), respectively; they are excluded from the authority table to avoid mischaracterization (see needs_verification).

9. Edge Cases (state-specific notes)

  • bankruptcy-automatic-stay — A Chapter 13 filing stays the tax-deed proceeding and can cure delinquent taxes through a plan; the SDCL 10-25-1/-8 periods are tolled by the federal automatic stay (state statute is silent).
  • federal-tax-lien-redemption — The IRS holds a 120-day redemption right after a sale that discharges a federal tax lien (26 U.S.C. § 7425) — federal overlay in SD.
  • state-lien-survival — Per Perry, a South Dakota tax deed takes subject to claims of the State for taxes/liens; not all senior governmental claims are wiped.
  • heirs-property — Heirs and a decedent’s personal representative are entitled to notice and may redeem (SDCL 10-25-6); notice runs to all record interests.
  • scra-protections — The Servicemembers Civil Relief Act may toll redemption / postpone sale for active-duty members (federal overlay).
  • surplus-funds — Post-HB 1090, tax-deed surplus belongs to the prior owner of record; mortgage-foreclosure surplus follows lien priority then the mortgagor.
  • Manufactured homes — taxed as real or personal property depending on affixation; flagged for verification of the certificate mechanism for unaffixed homes.
  • Void vs. voidable — a tax title from an invalid proceeding is treated as void (Coughlin); the statutory deed is only prima facie evidence (SDCL 10-25-13). See void-vs-voidable.

10. Operations

11. Meta

Legal information, not legal advice. This page summarizes South Dakota statutes and case law for research purposes. Statutes and local procedures change; verify against the cited primary sources and consult a licensed South Dakota attorney before acting. Last verified: 2026-06-01.

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