The bill amends South Dakota's existing law regarding the procedures for returning and withholding security deposits for residential premises. It stipulates 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 lessor is permitted to withhold amounts only for tenant defaults in rent or other agreed payments and for restoring the premises to their original condition, excluding ordinary wear and tear. Additionally, the bill requires lessors to provide an itemized accounting of any withheld deposit within forty-five days upon the tenant's request.

Furthermore, the bill introduces penalties for lessors who fail to comply with these requirements. If a lessor does not adhere to the outlined procedures, they forfeit the right to withhold any part of the deposit. Additionally, if a lessor retains a deposit in bad faith or fails to provide the necessary written statement or itemized accounting, they may be subject to punitive damages of up to two hundred dollars. This legislation aims to enhance transparency and accountability in the handling of security deposits in residential rental agreements.

Statutes affected:
Introduced, 12/19/2025: 43-32-24
Enrolled, 02/04/2026: 43-32-24