Overview
South Dakota security deposit laws are governed by South Dakota Codified Laws Chapter 43-32. South Dakota has a one-month deposit cap, a unique two-part return timeline, and provides for double damages for wrongful withholding. Using security deposit management software helps landlords track these multi-step deadlines.
Maximum Security Deposit
Under SDCL § 43-32-6.1, the maximum security deposit is one month's rent.
- Maximum: One month's rent
- This cap applies to all residential rentals
- Prepaid rent (such as first and last month) is separate and not subject to this limit
Pet Deposits
South Dakota does not have specific statutes governing pet deposits. Landlords may charge additional amounts for pets, but should document these separately in the lease. Service animals and emotional support animals cannot be charged pet deposits under fair housing laws.
Return Timeline
South Dakota has a unique two-part return timeline under SDCL § 43-32-24:
- Within 2 weeks after the tenant vacates: The landlord must provide a written itemized statement of any damage claims
- Within 45 days after the statement: The landlord must return any balance remaining after legitimate deductions
This effectively means landlords have up to approximately 59 days total to return the deposit, but must provide the damage statement within 2 weeks. (North Dakota has comparable provisions—see North Dakota security deposit laws.)
Interest Requirements
South Dakota does not require landlords to pay interest on security deposits. Any interest earned on the deposit belongs to the landlord.
Storage Requirements
South Dakota law does not specify how security deposits must be stored. Landlords are not required to place deposits in separate accounts or disclose account information to tenants.
Allowable Deductions
Landlords may deduct from the security deposit for:
- Unpaid rent
- Damage to the premises beyond normal wear and tear
- Cleaning costs to restore the unit to its original condition
- Other charges allowed by the rental agreement
Important: Normal wear and tear cannot be deducted. This includes minor scratches, small nail holes, and gradual fading or wearing from ordinary use.
Penalties for Non-Compliance
South Dakota provides strong penalties for landlords who wrongfully withhold security deposits:
- If the landlord fails to provide the itemized statement within 2 weeks, they forfeit all rights to withhold any portion of the deposit
- If the landlord wrongfully withholds the deposit, the tenant may recover up to twice the amount wrongfully withheld
- The court may also award actual damages and court costs
Common Compliance Questions
What counts as "normal wear and tear"?
Normal wear and tear includes minor scuffs on walls, slightly worn carpet in high-traffic areas, small nail holes from hanging pictures, and faded paint from sunlight. It does not include large holes in walls, stained or burned carpet, broken fixtures, or damage from pets. When in doubt, document the condition at move-in with dated photos.
How should I document the unit's condition?
Complete a detailed move-in checklist with the tenant, noting existing damage, appliance conditions, and overall cleanliness. Take timestamped photos or video of every room. At move-out, repeat the process. This documentation protects both parties and makes deduction decisions defensible if disputed. See how Passive works to streamline move-in and move-out processes.
Can I deduct for unpaid utility bills?
Only if your lease specifically allows it and the utilities are in your name. If utilities are in the tenant's name, contact the utility company directly—they have their own collection processes. Never make unauthorized deductions, even for amounts you believe the tenant owes.