Seller disclosure requirements in South Dakota

Is a disclosure form required by law?

Yes. SDCL § 43-4-38 says the seller of residential real property “shall furnish to a buyer a completed copy of the disclosure statement before the buyer makes a written offer.” The law covers “residential real property consisting of not more than four family dwelling units, all of which are contained in one structure” (§ 43-4-37). It applies to a sale, an exchange, an installment sale contract, a lease with an option to purchase, any other option to purchase, and a ground lease with improvements.

The form is not optional. Section 43-4-44 sets out the exact text that “must be used,” with space on each page for the property address and for the seller and buyer to initial.

What the form covers

The statutory form is long. It asks the seller to answer yes, no, “do not know” or not applicable on:

• Lot and title: liens other than a first mortgage, easements, boundary problems, encroachments, covenants, pending litigation or special assessments, and whether the home gets the owner-occupied tax reduction.
• Structure: cracks in walls, ceilings and floors, past damage from fire, wind, floods, hail or snow, and sewer backups.
• Systems and utilities: the radon system, sewer systems and drains, and the well and pump.
• Hazardous conditions: methane gas, lead paint, radon (house and well), mold, asbestos insulation, and the production or use of methamphetamines. For each one the seller says whether the condition exists and whether tests were done.
• Miscellaneous: for example, whether the home is in a flood plain and whether the sewer is public or private.

The form says it “is NOT A WARRANTY of ANY KIND” and “NOT A SUBSTITUTE FOR ANY INSPECTIONS.” It records what the seller knows. A buyer still needs an inspection (see home inspection cost).

Homeowners’ association homes

Since July 1, 2024, a seller of a home governed by a homeowners’ association must also give the buyer, before the buyer makes a written offer (§ 43-4-44.1):

1. A statement that an association governs the property.
2. A copy of its governing documents.
3. Whether there is an assessment, and its amount, frequency and purpose.
4. A list of special one-time assessments from the last three years.

Timing, changes and late delivery

The seller must make every disclosure “in good faith” (§ 43-4-41).

Exemptions

Sections 43-4-37 to 43-4-44 do not apply to these transfers (§ 43-4-43):

• Court-ordered transfers, including probate, divorce judgments, bankruptcy trustees, eminent domain, government agencies and specific-performance decrees.
• Transfers to a lender by a borrower in default, foreclosure sales, and resales by a lender that took the home through foreclosure or a deed in lieu.
• Transfers by a fiduciary administering an estate, guardianship, conservatorship or trust.
• Transfers between co-owners.
• Transfers to a spouse, child, parent, sibling, grandchild or grandparent.
• Newly built homes that have never been occupied.

What happens if a seller does not disclose

A sale is not undone only because someone skipped the disclosure rules. But under § 43-4-42, a person who “intentionally or who negligently violates” them is liable to the buyer for “actual damages and repairs suffered by the buyer as a result.” The court may award costs and attorney fees to the winner. A seller who truthfully completes the form is not liable for a defect or condition it discloses (§ 43-4-40), unless § 43-4-42 applies. For advice on a specific dispute, ask a South Dakota attorney (see do you need a real estate attorney).

Federal lead-based paint rule (homes built before 1978)

South Dakota’s form asks about lead paint, but a separate federal rule applies to most homes built before 1978. Before the buyer is bound by a contract, the seller must (40 CFR § 745.107):

• give the buyer the EPA-approved pamphlet on lead hazards;
• disclose any known lead-based paint or hazards and give the buyer any available records or reports;
• disclose the same to each agent.

The seller must also let the buyer have 10 days to inspect for lead-based paint, unless both sides agree in writing to another period, and the buyer may waive that in writing (§ 745.110). EPA lists foreclosure sales among the transactions the rule does not cover.