South Dakota Foreclosure Laws
Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: Yes
Security Instruments: Mortgage, Deed of Trust
Right of Redemption Period: 6 Months (2 Months if Vacant)
Deficiency Judgments Allowed: Varies
Time Frame: 90 Days
Public Notice: Complaint
South Dakota is considered to be a title theory state, which means that a property title will remain in trust until the loan is paid in full. In the state, a title can be secured by either a mortgage or a deed of trust. Both documents serve the same purpose and generally have the same terms.
South Dakota allows for two types of foreclosures when a borrower defaults: judicial and non-judicial. Once a property is sold, the borrower has a six (6) month right of redemption period when they may reclaim the property by paying off the debt plus any additional costs. If the property is vacant, the redemption period will only be two (2) months long.
Deficiency judgments may be granted in South Dakota when a property is sold at auction for less than what was owed on it. The borrower will be responsible for the difference in price if the judgment is granted. However, only credit for the property’s fair market value may be given.
Types of Foreclosures Allowed in South Dakota
Judicial foreclosure, also known as foreclosure by judicial sale, involves selling the defaulted property under court supervision. In order for a judicial foreclosure to be possible, no power of sale clause may be present in the loan documents.
The lender must file a lawsuit against the borrower to obtain an order to foreclose with the court that has jurisdiction in the county where the property is located. Once the court declares a foreclosure, the property will be sold at auction to the highest bidder.
Non-judicial foreclosure, which is also known as foreclosure by power of sale, does not require court supervision. In order for non-judicial foreclosures in South Dakota to be possible, the loan documents must contain a power of sale clause, which authorizes the lender to sell the property in the event of default to be able to recover what is owed on it.
There are two ways in which a non-judicial foreclosure in South Dakota can proceed. If the power of sale clause states a specific time, place, and outlines terms of sale, then the lender must follow the procedure that is stated. If there is no specification, then the following must take place:
1. A notice of foreclosure must be published in a newspaper that circulates in the county where the property is located once a week for four (4) consecutive weeks.
2. The lender must serve the borrower and any lien holder at least twenty-one (21) days before the foreclosure sale date.
3. The notice must contain information regarding the property, time and place of the sale, the names of the borrower and lender, the amount of the default and other relevant details.
4. The sale must be conducted by the county sheriff or his deputy between 9 am and 5 pm. The highest bidder will receive a certificate of sale. Anyone, even the lender, may bid at the auction.
5. The sale may be postponed by publishing a notice in the newspaper where the original foreclosure notice was published.
6. Borrowers have six (6) months (in some cases up to one year) after the sale to reclaim their property. If it is abandoned, the period is only two (2) months.
Hiring a South Dakota Foreclosure Attorney
If you have already defaulted on your mortgage or have received a notice of sale, all is not lost. There is still time to fight for your property. Turn to a leading foreclosure lawyer in South Dakota for assistance right away to prevent your home from being repossessed.
Foreclosure attorneys do whatever it takes to make sure your home is not seized. They will devise a plan to present to your lender as an alternative to repossession, such as short sale, mortgage modification, refinancing or even a temporary halt in payments. Since the process of foreclosing a property actually costs lenders money, your lender will most likely agree if an adequate plan is proposed by your foreclosure attorney.
Regardless of your reason for defaulting, be it because you lost your job or because a loved one is ill, you have rights as a homeowner in South Dakota. Contact a top team of South Dakota foreclosure lawyers right away to fight for those rights and ensure that your case ends with the best possible outcome.