Selling a South Dakota Home: What Are My Disclosure Obligations?

What a home seller must, and should, tell buyers in South Dakota about property defects.

For most South Dakotans, a home is their single most valued asset. If you are selling your home, you know that the process can be arduous. Legislators in Pierre have made the paperwork aspects of your task a bit more difficult through the requirement of mandatory disclosure of property defects. In South Dakota, like in many states, sellers are required to reveal various problems that could affect your home and property’s value. For example, a seller cannot fraudulently conceal major physical defects, such as a busted plumbing system or an unsteady foundation. If you’re selling your South Dakota home, what must you disclose, and when?

Disclosure Laws in South Dakota for Home Sellers

The legal basis for South Dakota's disclosure requirement is South Dakota Stat. § 43-4-37 et seq., which broadly covers disclosure statements. The law states: “The seller of residential real property shall furnish to a buyer a completed copy of the disclosure statement before the buyer makes a written offer.” Moreover, if you (the seller) become aware of any other conditions requiring disclosure between when you give the buyer the statement and when you close on the transaction, you must make an amendment to the statement.

In some states, real estate agents and attorneys are left to their own devices to draft disclosure forms that fit the requirements of the legislation. In South Dakota, the legislature has done this work already, codifying the entire disclosure form in South Dakota Stat. § 43-4-44. (To state the obvious, this means that your disclosures to potential buyers cannot be oral; you must actually give the written disclosure form, as provided in this statute).

Keep in mind, the buyer can terminate the sale within three days of receipt of the disclosure statement or amendment, under South Dakota Stat. § 43-4-39.

What Issues or Defects Does the South Dakota Disclosure Form Cover?

The South Dakota Department of Labor and Regulation has created a standard disclosure form—four pages long and mostly mirroring the language of the statute—that you, as a home seller, must fill out. You’ll see that you must certify that the information presented is accurate as of the date of the form, and that the buyer must also sign the form (as proof that he or she actually received it).

The form has about 100 questions divided into different sections. First, you will answer questions about the property itself—the address, how long you’ve owned it, whether there have been boundary surveys, and whether you are aware of anyeasements or liens on it. Next, you’ll answer a long series of questions about the condition of various aspects of the home: the roof, the attic, the plumbing, the basement, and the sewers, just to name a handful. For each, you must state whether you are aware—“Yes”, “No”, or “Not Sure”—whether there are any material defects with respect to that element of the home.

Importantly, the form also contains an "Other" clause; a general catchall, asking "Are you aware of any other material facts or problems that have not been disclosed on this form?". This is a clear signal that your task is to make full disclosure to the buyer, not to hide behind any missing question on the form.

The form also encourages you to attach additional information or pages, should you need to explain any responses in more detail. This can be especially useful if you want to alert potential buyers to a known defect (and thus comply with the statute), but then note that the defect is relatively minor (and thus reassure the buyer).

Why Should You Be Thorough and Honest In Making Disclosures?

No one disputes that every seller wants to make his or her house seem as beautiful and perfect as possible. It is only natural to want to fetch the highest price. But South Dakota draws a line between painting your walls with a fresh coat of white paint before an open house, and deliberately lying on your disclosure statement.

According to South Dakota Stat. § 43-4-42, a seller who makes misrepresentations or omissions on a disclosure statement “is liable to the buyer for the amount of the actual damages and repairs suffered by the buyer as a result of the violation or failure.” Not only that, but “In any court action pursuant to this section, the court may award costs and attorney fees to the prevailing party.” In plain English, this means that not only would you need to reimburse the buyer for the costs of remediation, but you could also end up paying your buyer’s attorney if your buyer successfully sues you! Legal fees can be significant, and serve as a warning and punishment to sellers who attempt to act in bad faith.

By the same token, the legislature has protected you from liability for any defect that you disclose. South Dakota Stat. § 43-4-40 states that: “a seller is not liable for a defect or other condition in the residential real property being transferred if the seller truthfully completes the disclosure statement.” The legislators are serious about your truthfulness, though, and require sellers to “make each disclosure in good faith.”

In short, you are better off making the necessary disclosures in a full and forthright manner, rather than letting your buyer discover problems down the road and begin pointing fingers in your direction.

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