South Dakota HOA Liens: No Assessment Lien Statute, and a Homestead Is Absolutely Exempt from Judgment Liens

Start with what does not exist, because that is the answer. South Dakota has no Uniform Common Interest Ownership Act, no Planned Community Act, and no general homeowners association act. The chapter that authorizes private covenants is SDCL 11-5, Restrictive Contracts and Declarations, and it contains eleven sections. They authorize the restrictions (11-5-1), require the declaration to be written, signed, acknowledged and recorded (11-5-2), give a remedy in court (11-5-3), cap the duration (11-5-4), preserve municipal zoning power (11-5-5), govern revocation (11-5-6), void covenants against flags, flagpoles and firearms (11-5-7 to 11-5-9), permit online voting (11-5-10) and set a modification vote (11-5-11). Not one of them creates a lien, ranks it against a mortgage, caps what it may include, or tells an association how to foreclose.

The condominium side is no different. SDCL chapter 43-15A, enacted in 1975, is a disclosure and registration act policed by the South Dakota Real Estate Commission: notice of intent to sell, a questionnaire, an inspection, a public report. Its single lien provision, SDCL 43-15A-29, is a construction lien rule requiring a lien holder who improved a whole development to apportion the demand among the units. There is no common expense lien in it. The Vertical and Horizontal Property Regimes chapter, SDCL 43-15, is repealed, and SDCL chapter 43-15B on time-share estates is nine sections of Real Estate Commission registration and fees.

So an association lien in South Dakota is a lien created by contract under SDCL 44-1-4, which recognizes only two sources for a lien: contract, or operation of law. Nothing gives an association's charge super-priority. SDCL 44-2-1 states the ordinary rule, that other things being equal, different liens upon the same property have priority according to the time of their creation. A declaration recorded before a purchase money mortgage is earlier in time; one recorded after is later. There is no statutory six-month or twelve-month carve-out ahead of the first mortgage of the kind common in UCIOA states.

Three statutory limits actually bind, and they are the ones to know.

First, the homestead. SDCL 43-31-1 exempts the homestead of every family resident in the state, including a homestead listed for sale, from judicial sale, from judgment lien, and from all mesne or final process from any court, so long as it keeps the character of a homestead. SDCL 43-45-3(1) makes that exemption absolute with no dollar ceiling, and adds a one hundred thousand dollar exemption for sale proceeds for one year. The exceptions are narrow and named: SDCL 43-45-8 disallows the exemption against process issued for purchase money or for the agreed or reasonable cost of material or labor in the original erection and construction of buildings, SDCL 43-45-9 covers debts for property obtained under false pretenses, and SDCL 43-45-10 and 43-45-11 cover criminal fines and forfeited bonds. Unpaid association assessments are on none of those lists.

Second, duration. SDCL 11-5-4 says the restrictions authorized by 11-5-1 and 11-5-2 continue in force for the period prescribed in the declaration but not exceeding forty years from its date. SL 2021, ch 56 raised that ceiling from thirty years. An obligation to pay assessments that rests entirely on the declaration cannot outlive it.

Third, spousal joinder. SDCL 11-5-2 requires that any declaration or contract covering a homestead be executed and acknowledged by both the owner and the owner's spouse, which matters when a developer or a later amendment attempts to burden an occupied home.

One more limit is easy to overlook: SDCL 11-5-1 confers the covenant power only over real property situated in a first or second class municipality. Under SDCL 9-2-1 those are municipalities of five thousand or more and of five hundred to four thousand nine hundred ninety-nine, so the chapter does not by its terms reach a third class town of under five hundred people or unincorporated county land.

At the point of sale, SDCL 43-4-44.1, effective for transfers after July 1, 2024, forces the association's assessment picture into the open. Before a buyer makes a written offer the seller must hand over a disclosure that the property is governed by an association, a copy of the governing documents, a statement of whether there is an assessment and its amount, frequency and purpose, and a list of any special onetime assessments from the most recent three years. If a material fact changes before closing or possession, whichever comes first, the seller must furnish a written amendment.

An association pursuing unpaid assessments is pursuing a contract, so the route is a circuit court action under SDCL 11-5-3, which lets the terms of a recorded declaration be enforced by action at law or by suit in equity brought by any person possessing an interest in the affected land. A money judgment then runs into SDCL 43-31-1 and SDCL 43-45-3(1) if the member's home is the family homestead. Where the declaration itself creates a lien on the parcel, the association is enforcing a contractual lien, and the procedural machinery it borrows is judicial: SDCL chapter 21-47 governs foreclosure actions on real property security, requires the complaint to disclose any prior action to collect the debt (SDCL 21-47-4), forbids a foreclosure after a money judgment unless execution has been returned unsatisfied (SDCL 21-47-5), bars parallel proceedings at law while the foreclosure is pending (SDCL 21-47-6), and defers delivery of possession to the purchaser until the redemption period has run (SDCL 21-47-13), with redemption governed by SDCL 21-47-23 and chapter 21-52.

Because no South Dakota statute authorizes an association to foreclose by advertisement, nothing here supports the nonjudicial route that associations use in other states. 1 disclosure package has a separate grievance against the seller, not against the association.