South Dakota Security Deposit Law 2026: Limits, Deadlines & Deductions
- Can I charge more than one month's rent if the tenant has a large dog? Yes, if the lease says so. § 43-32-6.1 allows a larger deposit by agreement "where special conditions pose a danger to maintenance of the premises." Put the condition and the amount in the written lease; a verbal…
- What if the tenant never gives me a forwarding address? The 21-day return clock runs from termination and your receipt of the tenant's mailing address or delivery instructions. Ask for it in writing at the move-out inspection so you can prove the date.
- Does the tenant have to request the itemized statement, or should I send it automatically? Two different duties: the written statement of the specific reason for withholding is automatic — due inside the 21 days if you keep any portion, whether or not the tenant asks. The full itemized accounting is the…
South Dakota keeps it simple and landlord-tilted on paper: you can charge one month's rent as a security deposit (S.D. Codified Laws § 43-32-6.1), must return the deposit — or explain in writing why you're keeping part of it — within 21 days, and face a bad-faith penalty of only $200 (S.D. Codified Laws § 43-32-24). The catch is the paper trail — a full itemized accounting is due within 45 days when the tenant asks for one. Every section below is from the South Dakota Codified Laws.
The short version: Charge no more than one month's rent unless the lease documents special conditions that justify a bigger deposit. Within 21 days after the tenancy ends and you have the tenant's forwarding address, return the deposit or send a written statement showing the specific reason for withholding any of it; a full itemized accounting follows within 45 days if the tenant requests one. Blow the deadlines in bad faith and you forfeit any right to withhold the deposit, plus up to $200 in punitive damages.
South Dakota's 21-day return clock starts fast — miss the § 43-32-24 deadlines and you forfeit any right to withhold the deposit. Track every deadline with the Security Deposit Disposition & Deadline Tracker ($14.95).
The statute table
| Citation | What it says (one line) |
|---|---|
| S.D. Codified Laws § 43-32-6.1 | Security deposits are capped at one month's rent, but a larger deposit may be agreed to in the lease where "special conditions pose a danger to maintenance of the premises." |
| S.D. Codified Laws § 43-32-24 | Within 21 days after the tenancy ends and the landlord receives the tenant's mailing address or delivery instructions, the landlord must return the deposit or furnish a written statement showing the specific reason for withholding any portion (deadline extended from two weeks by 2026 Senate Bill 4). |
| S.D. Codified Laws § 43-32-24 | An itemized accounting of any deposit withheld must be furnished within 45 days of termination, upon the tenant's request. |
| S.D. Codified Laws § 43-32-24 | Deductions are limited to unpaid rent or other funds due under the lease, and the cost of restoring the premises to move-in condition, minus ordinary wear and tear. |
| S.D. Codified Laws § 43-32-24 | A landlord who fails to comply forfeits the right to withhold any portion of the deposit. |
| S.D. Codified Laws § 43-32-24 | Bad-faith retention of any portion — including failure to provide the written statement — subjects the landlord to punitive damages of up to $200. |
| S.D. Codified Laws §§ 43-32-6.1–43-32-24 (as a whole) | No statute requires interest on deposits or a separate bank account; no receipt is required. |
Limits: how much can you charge?
One month's rent, full stop — that's the default ceiling under § 43-32-6.1. The only exception is a written lease clause where both parties agree to a larger amount because "special conditions pose a danger to maintenance of the premises." Don't rely on this casually: if the deposit is ever challenged, you want the special condition described in the lease itself (large pets, waterbeds, workshop equipment, etc.). Check your figure against the Security Deposit Max Checker before you sign.
The 21-day/45-day deadlines, precisely
South Dakota actually gives you two different clocks under § 43-32-24:
- 21 days — return the deposit, or furnish a written statement showing the specific reason for withholding any portion of it, within 21 days after the tenancy's termination and your receipt of the tenant's mailing address or delivery instructions. Both triggers must happen before the clock runs. Get that forwarding address in writing at move-out; the clock runs better when there's no dispute about when you received it. (Before 2026 Senate Bill 4 amended § 43-32-24, this deadline was two weeks — many summaries, and even the Attorney General's fast-facts page, still show the old figure.)
- 45 days — the itemized accounting of any deposit withheld is due within 45 days after termination, but only upon the tenant's request. In practice, send a fully itemized statement inside the 21 days unprompted — it satisfies the statement duty, answers the accounting request before it is made, and undercuts any bad-faith claim.
Calendar both dates with the Security Deposit Deadline Finder on the day the tenant gives notice.
Deductions and the itemized list
You may withhold only for (1) unpaid rent or other money owed under the lease, and (2) restoring the unit to its condition at the start of the tenancy, less ordinary wear and tear. The written statement must identify the damages and the cost of repairing each. Build it with the Security Deposit Deduction Letter Generator so nothing required gets left out.
Interest and where the money sits
South Dakota law requires no interest on security deposits and no separate or escrow account. You can hold the deposit in your operating funds. That said, commingling creates accounting risk for you — a dedicated ledger per unit is cheap protection against a bad-faith claim.
The penalty, spelled out
Miss the requirements and § 43-32-24 hits you twice:
1. Forfeiture — a landlord who fails to comply with § 43-32-24 forfeits the right to withhold any portion of the deposit. No deductions, period.
2. Up to $200 in punitive damages — if the retention was in bad faith, including failing to provide the written statement and itemized list, the tenant can recover punitive damages up to $200 on top of the deposit.
Two hundred dollars is modest compared to the 2x and 3x multipliers in other states — but the forfeiture of all deductions is the real teeth. A $3,000 damage claim dies entirely if you skipped the paperwork.
FAQ
Can I charge more than one month's rent if the tenant has a large dog?
Yes, if the lease says so. § 43-32-6.1 allows a larger deposit by agreement "where special conditions pose a danger to maintenance of the premises." Put the condition and the amount in the written lease; a verbal understanding won't survive a dispute.
What if the tenant never gives me a forwarding address?
The 21-day return clock runs from termination and your receipt of the tenant's mailing address or delivery instructions. Ask for it in writing at the move-out inspection so you can prove the date.
Does the tenant have to request the itemized statement, or should I send it automatically?
Two different duties: the written statement of the specific reason for withholding is automatic — due inside the 21 days if you keep any portion, whether or not the tenant asks. The full itemized accounting is the one tied to the tenant's request, due within 45 days after termination. The safe move is to send a fully itemized statement inside the 21 days unprompted; it answers both duties at once.
Can I deduct for normal wear and tear?
No. Deductions are only for damage beyond ordinary wear and tear, plus unpaid rent and other lease obligations. Scuffed paint from two years of living is not a deduction.
Is there a separate pet deposit limit in South Dakota?
No statute addresses pet deposits separately. A pet deposit counts toward the one-month cap unless you've used the "special conditions" exception in the lease.
What happens if I just forget to return the deposit?
Forgetting looks like bad faith. The tenant gets the full deposit back, you lose every deduction, and you can be hit with up to $200 in punitive damages.
More security deposit guides
- Security deposit laws by state
- South Carolina security deposit law
- Tennessee security deposit law
- Rhode Island security deposit law
- Texas security deposit law
Last verified: October 18, 2026, against § 43-32-24 as amended by 2026 Senate Bill 4 (signed February 11, 2026). This is general information, not legal advice. Verify with a licensed South Dakota attorney before acting.