If you live in a house, condo, or townhome that is part of a common interest community in South Dakota, you are most likely responsible for paying dues and assessments to a homeowners’ association (HOA) or condominium association (COA). If you don’t pay, in most cases the HOA or COA can get a lien on your property that could lead to a foreclosure.
Read on to learn more about HOA and COA foreclosures in South Dakota.
HOA Lien Laws in South Dakota
South Dakota's statutes do not specifically address HOAs. However, HOAs in South Dakota are usually set up as non-profit corporations, which are governed by Title 47 (Corporations), Chapter 22 (Nonprofit Corporations- Formation and General Powers) of the South Dakota Codified Laws.
Also, the rules and restrictions about how the HOA operates, including those pertaining to assessments liens, can be found in the association’s governing documents such as the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) and bylaws.
For this reason, you should take the time to carefully review the HOA governing documents before purchasing a home in a covenanted community in South Dakota. (To find out more about taking a closer look at what's in your HOA's governing and other relevant documents, see Before Buying: How to Read the CC&Rs or Homeowners' Association (HOA) Documents.)
COA Lien Laws in South Dakota
Title 43 (Property), Chapter 15A (Condominiums) of the South Dakota statutes (S.D. Codified Laws §§ 43-15A-1 through 43-15A-30) governs COA activities in the state, though this set of laws does not address COA liens. For this reason, you should review the COA’s declaration of condominium and bylaws if you are purchasing (or have already purchased) a condominium in South Dakota.
How HOA and COA Liens Work
HOAs and COAs usually have the ability to get a lien on your home if you become delinquent in paying the monthly dues and/or any special assessments (collectively referred to as assessments). Once you fall behind in the assessments, a lien will often automatically attach to your property.
Charges the HOA or COA May Include in the Lien
Generally, an HOA or COA’s declaration or bylaws will describe any charges that may be included in the lien. For example, the association is often allowed to include the following in its lien:
- late charges
- interest, and
- reasonable attorney’s fees and costs.
HOA and COA Foreclosures in South Dakota
If you default on the HOA or COA assessments in South Dakota, the association can foreclose on your home. Some people mistakenly believe that the HOA or COA cannot foreclose if you are current with your mortgage payments. However, the association’s right to foreclose has nothing to do with whether you are current on your mortgage payments. (Learn more about HOA liens and foreclosure.)
To find out about the specific notice and foreclosure procedures that the association must follow if you fall behind in payments, read the association’s governing documents. (Learn more about general foreclosure laws and procedures in the state of South Dakota.)
What to Do if You Are Facing Foreclosure by an HOA or COA in South Dakota
If you are facing an HOA or COA foreclosure, you should consult with an attorney licensed in South Dakota to discuss all legal options available in your particular circumstances. (See our HOA Foreclosure topic page for articles on HOAs, possible options to catch up if you are delinquent in payments, how bankruptcy can help discharge dues, HOA super liens, and more.)