2.2 South Dakota Property Disclosures
Key Takeaways
- South Dakota law (SDCL 43-4-38 through 43-4-44) requires sellers of residential real property to furnish a completed Property Condition Disclosure Statement before the buyer makes a written offer
- The statement is a disclosure, not a warranty; it covers title issues, structural systems, plumbing, electrical, HVAC, water, sewer, and known environmental hazards
- If a material fact changes before closing, the seller must deliver a written amendment, and a late statement or amendment triggers the buyer's right to rescind
- Buyers may rescind within three days if the statement or amendment is delivered in person, or six days if delivered by mail (SDCL 43-4-39)
- Pre-1978 homes also require the separate federal lead-based paint disclosure, and several transfers (foreclosure, gift, court order, government) are statutorily exempt
The Mandatory Seller's Property Condition Disclosure
South Dakota is not a pure caveat emptor ("buyer beware") state for residential sales. Under SDCL 43-4-38 through 43-4-44, the seller of residential real property must furnish the buyer a completed Seller's Property Condition Disclosure Statement on the Commission's form. The exam-critical timing rule is precise:
The seller shall furnish the buyer a completed copy of the disclosure statement before the buyer makes a written offer (SDCL 43-4-38).
Key points the exam rewards:
| Element | Rule |
|---|---|
| Who completes it | The seller, not the licensee |
| When delivered | Before the buyer's written offer |
| Legal nature | A disclosure, not a warranty (SDCL 43-4-44 form language) |
| Form authority | South Dakota Real Estate Commission standard form |
The statement reflects the seller's actual knowledge. A seller is not required to hire an inspector or to discover hidden defects, but must answer honestly about conditions of which the seller is aware, and may not check 'unknown' to dodge a fact actually known. A licensee assisting the seller should make sure the statement is completed and delivered on time, but the licensee does not author it for the seller.
Worked example. A buyer-agent receives a listing where the disclosure is blank and the seller wants offers first. The agent should advise that, under SDCL 43-4-38, the buyer is entitled to the completed statement before writing the offer; proceeding without it can hand the buyer a rescission right later.
What the statement covers
The form walks the seller through every major system and known issue:
| Category | Examples disclosed |
|---|---|
| Title / lot | Easements, encroachments, boundary disputes, shared wells |
| Structural | Foundation, roof, walls, windows, basement water/leaks |
| Plumbing & water | Water source, well, septic vs. public sewer, fixtures |
| Electrical | Wiring, panel capacity, code issues |
| Heating / cooling | Furnace, HVAC, fuel type, age |
| Appliances | Items that convey and their working order |
Environmental hazards
| Hazard | Disclosure |
|---|---|
| Radon | Known testing results / presence disclosed |
| Asbestos | Known presence disclosed |
| Mold / moisture | Known presence disclosed |
| Methamphetamine contamination | Known prior use disclosed |
| Lead-based paint (pre-1978) | Disclosed under separate federal form |
HOA add-on disclosure
Under SDCL 43-4-44.1, residential property within a homeowners' association requires an additional disclosure of HOA existence, dues, assessments, and contact information. Forgetting the HOA add-on is a frequent test trap.
Ongoing Duty to Amend
The disclosure obligation does not end when the buyer first sees the form. If a material fact changes between delivery of the statement and closing, the seller must promptly deliver a written amendment to the buyer. Verbally mentioning a new leak is not enough; the amendment must be in writing.
Worked example. A seller delivers a clean disclosure in March. In April, before closing, a spring storm cracks the foundation. The seller must amend the statement in writing and re-deliver it. That late amendment then opens a fresh rescission window for the buyer.
Buyer's Right to Rescind for Late Delivery
The whole point of "before a written offer" is that the buyer should have the facts up front. When a statement or material amendment is delivered after the buyer makes the written offer, SDCL 43-4-39 gives the buyer a right to rescind:
| Delivery method | Rescission window |
|---|---|
| Delivered in person | 3 days to rescind |
| Delivered by mail | 6 days to rescind |
The buyer rescinds by delivering written notice to the seller or the seller's agent within the window. The extra days for mail account for delivery time. Memorize this 3/6 pairing; it is one of the most heavily tested numeric facts in this chapter.
Statutory Exemptions
Not every transfer triggers the disclosure duty. The following are exempt (the underlying transaction is unusual or involuntary, so a meaningful condition disclosure is impractical):
| Exempt transfer | Example |
|---|---|
| Court-ordered transfers | Probate, divorce decree, bankruptcy order |
| Transfers to/from government | Sale to a public agency |
| Foreclosure / deed in lieu | Lender-owned (REO) property |
| Transfers without consideration | Gifts, inheritance |
| Co-owner to co-owner / spouse-to-spouse | Adding or removing a name on title |
| Newly constructed, never occupied | First-sale new builds |
Trap: An ordinary resale of a single-family home, condo, or duplex is never exempt. Only the unusual transfers above are.
Federal Lead-Based Paint Disclosure
For homes built before 1978, federal law (the Residential Lead-Based Paint Hazard Reduction Act of 1992, "Title X") layers an additional requirement on top of South Dakota's form:
| Federal requirement | Detail |
|---|---|
| Disclose known lead hazards | Plus any available records/reports |
| Provide EPA pamphlet | Protect Your Family From Lead in Your Home |
| Lead Warning Statement | Signed acknowledgment in the contract |
| Inspection opportunity | 10-day period to test (buyer may waive) |
The federal lead disclosure applies even when a state exemption would otherwise apply to a pre-1978 home, so an REO pre-1978 house still needs the lead form. A seller who knowingly files a false disclosure may face buyer claims for damages and rescission; a truthful, complete disclosure is the seller's best legal protection.
When must a South Dakota seller provide the completed Property Condition Disclosure Statement?
A South Dakota buyer receives the disclosure statement BY MAIL after already making a written offer. How long does the buyer have to rescind?
Which transfer is EXEMPT from South Dakota's property condition disclosure requirement?
A seller delivers a clean disclosure, then learns of a new foundation crack before closing. What does South Dakota law require?
For a home built in 1965, which additional disclosure does FEDERAL law require beyond South Dakota's form?