South Dakota Real Estate Practices

Attorney Involvement

Please describe any requirements under applicable state law for attorney, abstractor or other special professional involvement, for example, in the search, examination, opinion of title, signing, closing, disbursement, recording, preparation of documents, and/or policy-issuance.

Title policy must be countersigned by SD licensed abstractor. SDCL 58-25-16.

Cancellation/Commitment Fee

Does your state permit or require a cancellation fee or commitment fee upon cancellation?

 It’s permitted.

Certificate of Release (of Mortgage)

If anyone other than the lender (such as a title agent, settlement agent, underwriter or attorney) has the authority to release the security instrument, please describe.

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.

Deeds

Please describe the kinds of deeds that are customary for commercial and residential transactions.  Please describe the kinds of deeds that are generally not insurable.

Warranty, Limited Warranty and Quit- Claim Deeds. There are no deeds that are generally not insurable.

Joinder of Spouses

If a non-title holding spouse is required to join in the execution of a deed or a security instrument, please describe.  Any analogous rights, such as those in a civil union or equivalent, should also be addressed. 

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 25-2-7: Homestead conveyed by both.

Mortgage Tax

Is there a mortgage tax in your state?  If yes, is it uniform across the state or does it vary?  If it is uniform, please describe.  

No.

Payment Customs

Who customarily pays for:

(a) Owner’s Policy?
(b) Transfer Tax & Recording Fee?
(c) Survey Charges?
(d) Closing/Settlement Fees?

a) Owner’s policy cost split between buyer and seller.
b) Each party pays filing fees for their documents.   Deed Tax ~ SDCL 43-4-21, Seller pays $.0.50/500.
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.
d) Buyer and seller split closing fees.

Policy Countersignatures

Please describe any statutory or regulatory requirements for countersignatures in order to issue the policy (for example, residency requirements).

SDCL 58-25-16 requires countersignature of SD abstractor on policy.

Real Estate Taxes

Please describe the general tax year, due dates, and delinquency dates, including lien dates and payment cycle.

Paid in arrears; 2011 taxes due January 1 but not delinquent if pay half by May 1 and remaining half by October 1.

Search and Examination Fees

Is it permissible and/or customary to charge a separate search and/or examination fee, and under what circumstances?  If your jurisdiction is all-inclusive, please state that.

It is permissible to charge a search and examination fee.  There is usually a search and exam fee if multiple parcels are involved. Some agents charge using an all-inclusive structure but the charges will usually be about the same.

Search Requirements

Is there a minimum period of time for a title search required: (a) by state law, (b) pursuant to marketable record title acts, or (c) by any other applicable title examination standards (e.g., state bar association)?  Please respond to each category.  If a minimum search period exists for any category, please state it.

SDCL 43-30-1: 22 years, Marketable Title Act.

Security Instruments (Deed of Trust vs. Mortgage)

Please describe the customary and permissible form(s) of security instruments used in your state. 

Who can be listed as the trustee on the Deed of Trust (e.g., residency and/or natural person requirements, etc.)? Can an underwriter or title agent be designated as the trustee, and, if so, is it customary?

The customary and permissible form of security instrument is the Mortgage. Deeds of Trust are not used in South Dakota.

Standard Exceptions and Requirements

Please identify the standard exceptions and requirements that are customarily used in your state.

Standard Exceptions:

1. Defects, liens, encumbrances, adverse claims or other matters, if any; created, first appearing in the Public Records, or attaching subsequent to the effective date hereof but prior to the date the proposed insured acquires for value of record the estate or interest or mortgage thereon covered by this Commitment.

2. Rights or claims of parties in possession not recorded in the Public Records.

3. Easements, or claims of easements, which are not recorded in the Public Records.

4. Any encroachment, encumbrance, violation, variation or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and not shown in the Public Records.

5. Any lien or right to a lien for services, labor or material heretofore or hereafter furnished, imposed by law and not recorded in the Public Records.

6. a. Unpatented mining claims; b.  reservations or exceptions in patents or in Acts authorizing the issuance thereof; c.  water rights, claims or title to water, whether or not the matters excepted under (a), (b) or (c) are shown by the Public Records.

7. Taxes or special taxes and special assessments which are not recorded as existing liens by the Public Records.

8. Minerals of whatsoever kind, subsurface and surface substances, including but not limited to coal, lignite, oil, gas, uranium, clay, rock, sand and gravel in, on, under and that may be produced from the Land, together with all rights, privileges, and immunities relating thereto, whether or not appearing in the Public Records or listed in Schedule B. The Company makes no representation as to the present ownership of any such interests. There may be leases, grants, exceptions or reservations of interests that are not listed.

State-specific Policy Variations

If there are state-specific changes to the provisions in the ALTA policies (e.g., Arbitration, Minerals), please describe.

None.

Title Insurance Form and Filing Regulations

Please describe the form and/or rate filing requirements, if any, related to policies and endorsements.  Please describe any applicable rating bureau. 

See SDCL 58-25-1 thru 58-25-27.

Transfer Taxes

Is there a transfer tax in your state? If yes, is it uniform across the state or does it vary?  If it is uniform, please describe.

Yes. SDCL 43-4-21. Yes, it is uniform.

Usury

Is usury coverage available?

Yes. There is 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.

Withholding Taxes

What are your state’s requirements, if any, with regard to withholding proceeds from a sale, similar to but not including FIRPTA? 

None.

Witness Requirements

Are witnesses required on a deed or security instrument?  If so, please describe.

No.