South Dakota HOA fine rules

What this means for homeowners

• South Dakota has no homeowners association act and no statute governing HOA fines. No South Dakota statute requires an association to give notice before levying a fine, sets a cure period, guarantees a hearing, or caps the amount of a fine. Whether a South Dakota homeowners association may fine at all, how much, and what steps it must take first are set by the recorded declaration, covenants, conditions and restrictions, bylaws and rules, together with the South Dakota nonprofit corporation chapters, SDCL chs. 47-22 to 47-28, for an association incorporated under them, which supply corporate mechanics rather than fine procedure. Under those chapters a corporation "shall keep correct and complete books and records of account and shall keep minutes of the proceedings of its members, board of directors, and committees having any of the authority of the board of directors; and shall keep at its registered office or principal office a record of the names and addresses of its members entitled to vote" (SDCL § 47-24-1), and "All books and records of a corporation may be inspected by any member, or his agent or attorney, for any proper purpose at any reasonable time" (§ 47-24-2). That is a corporate members' inspection right, not an association records statute.
• The chapter that comes closest to a South Dakota homeowners association statute is SDCL ch. 11-5, Restrictive Contracts and Declarations, and it contains no fine provision. It lets a landowner "regulate and restrict by declaration or contract" the height, size, placement and use of buildings and land (§ 11-5-1), requires the declaration to be signed, acknowledged and recorded (§ 11-5-2), and supplies the enforcement mechanism: "After the execution, recording, and filing of any declaration or contract executed pursuant to §§ 11-5-1 and 11-5-2, the terms and conditions of the same may be enforced by action at law or by suit in equity brought by any person possessing any interest in the land affected by such declaration or contract or in any part of such land, or such action or suit may be maintained by the first or second class municipality within which such land is situated" (§ 11-5-3). Enforcement is by court action, not by a statutory fine process. The chapter also caps duration — restrictions "continue in force for a period as may be prescribed in a declaration or contract but not exceeding forty years" (§ 11-5-4) — and adds three recent owner-side provisions: a right to display the United States flag and certain other flags "regardless of any private covenants, restrictions, bylaws, rules, or requirements" (§ 11-5-7) and to erect a freestanding flagpole no more than twenty feet high (§ 11-5-8); a rule that "A homeowner's association may not include or enforce a provision in a governing document that prohibits, restricts, or has the effect of prohibiting or restricting the lawful: (1) Possession, transportation, or storing of a firearm, any part of a firearm, or firearm ammunition; or (2) Discharge of a firearm" (§ 11-5-9); and a default amendment rule that "If a declaration or contract in writing, as provided in § 11-5-2, fails to provide a provision permitting a modification to the declaration or contract, a vote of two-thirds of the owners of real property governed by the declaration or contract is required to modify the declaration or contract" (§ 11-5-11). Note the geographic limit built into § 11-5-1: the power it confers runs to property "situated in any first or second class municipality within this state."
• Where South Dakota statutes mention homeowners associations elsewhere, they do so for disclosure and lien-adjacent purposes and attach no fine procedure. A seller of "a residential real property governed by a homeowners' association" must furnish the buyer, before the buyer makes a written offer, a disclosure that the property is so governed, a copy of the governing documents, a statement of any assessment and its amount, frequency and purpose, and "A list of any special onetime assessments from the most recent three years" (SDCL § 43-4-44.1, applicable "to all transfers of residential real property occurring after July 1, 2024"). That section and § 11-5-9 both define "homeowners' association" as "any incorporated or unincorporated association in which membership is based upon owning or possessing an interest in real property and that has the authority, pursuant to recorded covenants, bylaws, or other governing documents, to assess and record liens against the real property of its members." The private transfer fee chapter separately excludes from its definition of a private transfer fee "Any fee, charge, assessment, fine, or other amount payable to a homeowners', condominium, cooperative, mobile home, or property owners' association pursuant to a declaration or covenant or law applicable to such association" (§ 43-4-47(7)) — an exclusion that assumes such fines may exist under the recorded documents without creating, limiting or conditioning them.
• South Dakota's condominium chapter contains no fine provision either, so the absence runs to both sides. SDCL ch. 43-15A, §§ 43-15A-1 to 43-15A-30, is a 1975 developer-registration and disclosure statute administered by the South Dakota Real Estate Commission. It defines "Council of co-owners" as "all co-owners of the condominium" (§ 43-15A-1(3)) but never gives that body powers, and the four particulars a master deed must express are a description of the land and buildings, the description and number of each condominium, the description of the common areas, and "The provisions requiring the council of co-owners to maintain insurance on the condominium" (§ 43-15A-4). The chapter does not require bylaws, list association powers, or mention fines, notice of a violation, a cure period, a hearing, or any right of an owner to inspect association records. Its substance is the notice of intent to sell, inspection, public report, escrow and advertising provisions of §§ 43-15A-10 to 43-15A-26, a validation section declaring valid the regimes and condominiums recorded before January 1, 1992 (§ 43-15A-28, SL 1980, ch 294, § 21; SL 1992, ch 307, § 52), a mechanic's lien apportionment rule (§ 43-15A-29), and rulemaking authority for the Real Estate Commission (§ 43-15A-30). Section 43-15A-27 is repealed, and the predecessor chapter, SDCL ch. 43-15 (Vertical and Horizontal Property Regimes), was repealed by SL 1980, ch 294. South Dakota therefore has no fine statute on either the homeowners association side or the condominium side.