The bill amends South Dakota's law regarding the procedures for returning and withholding security deposits for residential premises. It establishes that lessors must return the security deposit or provide a written statement detailing the reasons for withholding any portion of the deposit within twenty-one days after the tenancy ends and after receiving the tenant's mailing address or delivery instructions. The bill specifies that lessors may only withhold amounts that are reasonably necessary to remedy tenant defaults in rent and other funds due, as well as to restore the premises to their original condition, excluding ordinary wear and tear.

Additionally, the bill mandates that lessors must provide an itemized accounting of any withheld deposit within forty-five days upon the lessee's request. If a lessor fails to comply with these requirements, they forfeit the right to withhold any portion of the deposit. Furthermore, the bill introduces punitive damages for the bad faith retention of a deposit or failure to provide the required written statement or itemized accounting, with damages capped at two hundred dollars.

Statutes affected:
Introduced, 12/19/2025: 43-32-24