South Dakota HOA Assessment Limits
Section 1: Overview
South Dakota puts no percentage cap on HOA assessments. The state leaves assessment authority almost entirely in the recorded declaration and bylaws, treats the association lien as subordinate to a prior first mortgage, and sends any appeal from the Circuit Court directly to the Supreme Court of South Dakota — the state maintains no intermediate appellate court.1
South Dakota is a declaration-driven, light-touch state — not a dual-statute UCIOA state. The Legislature addressed condominiums through SDCL Chapter 43-15A, a developer-disclosure and Real Estate Commission registration statute that creates no association assessment lien, no budget-ratification step, and no percentage cap.2 SDCL Chapter 43-15B carries the title "Time-Share Estates," not planned communities, and South Dakota has enacted no planned-community act analogous to UCIOA Article 3.3
Most non-condominium associations operate under their recorded covenants plus the South Dakota Nonprofit Corporation Act (Title 47). Regular increases come from the board through the annual budget under the declaration and bylaws, with no statutory cap and no statutory deemed-ratification or owner-rejection step. Special assessments and the assessment lien are likewise creatures of the declaration; the lien is contractual, generally subordinate to a prior first mortgage, and enforced as the documents and general lien-foreclosure law allow.
On the national spectrum, South Dakota sits opposite statutory-cap states such as California and apart from super-priority UCIOA states. The sections below lay out the framework, the practice steps, and the recent legislative and judicial activity.
Section 2: The assessment framework
2A. Authority to levy and allocate assessments
Assessment authority in South Dakota is contractual first and statutory only at the margins.
For condominiums, SDCL Chapter 43-15A establishes how a project is created — through a recorded master deed or lease that identifies the land, units, common areas, and an insurance obligation — and it requires developer disclosure to the South Dakota Real Estate Commission before any sale.2 The chapter does not give the board a statutory power to assess, does not prescribe an allocation formula for common expenses, and creates no association assessment lien. Those terms live in the master deed, declaration, and bylaws. SDCL Chapter 43-15B is "Time-Share Estates," a separate and short chapter administered through the Real Estate Commission; it does not govern ordinary residential homeowners associations.3,4
South Dakota has not adopted a planned-community act, so a typical lot-based HOA draws its power to set and allocate assessments from its recorded declaration of covenants, conditions, and restrictions, its bylaws, and — where the association is incorporated — the South Dakota Nonprofit Corporation Act. The Legislature confirmed this structure in 2024 when it defined a "homeowners' association," for the firearms-preemption section, as an association with authority "pursuant to recorded covenants, bylaws, or other governing documents, to assess and record liens against the real property of its members."5 That definition settles the operative point for boards and managers: assessment and lien authority comes from the recorded documents, not from a UCIOA-style code.
The board ordinarily holds the power to set the annual assessment through adoption of the budget, and the declaration controls whether assessments are allocated equally, by lot, by unit, or by some fractional interest. Because the controlling text is the declaration, the allocation formula and any voting or approval conditions vary community by community and require direct reading of the recorded instrument.
2B. Limits on regular assessment increases
South Dakota provides no statutory percentage ceiling on regular assessment increases. There is no analogue to California's 20 percent regular-increase limit, and neither Chapter 43-15A nor any other South Dakota chapter prescribes one.2 The board adopts the operating budget under the declaration and bylaws, and the assessment follows from that budget.
South Dakota has also not enacted a UCIOA-derived budget-ratification or owner-rejection mechanism. No statutory step declares the budget ratified unless a stated percentage of owners reject it; that procedure exists only where a particular declaration writes it in. Any cap, ratification vote, or member-approval threshold that applies to a given community is defined by that community's recorded documents, not by statute.
The practical consequences are twofold. First, a board that follows its declaration and bylaws on notice, quorum, and adoption can generally raise regular assessments without running into a statutory limit. Second, because the only limits are contractual, a defective increase is one that departs from the declaration or bylaws — for example, an increase adopted without a required member vote, without proper meeting notice, or beyond a cap the documents impose. Such a defect opens the increase to challenge by owners and can serve as a defense to collection, which is why the recorded text and the corporate formalities under Title 47 carry the compliance weight that a statute would carry in a capped state.
2C. Special assessments, the assessment lien, and foreclosure
Special assessments in South Dakota face authorization and limits set by the declaration and bylaws — not by a statutory formula. There is no statutory percentage cap on a special assessment and no statutory member-approval threshold; whether owner approval is required, and at what percentage, depends on the recorded documents.
The association's lien for unpaid assessments is contractual. SDCL 43-15A-29, despite its placement in the condominium chapter, is a construction-lien apportionment rule — it requires a lienholder who improves "a single development of condominiums" to apportion the demand among the units — and it creates no association assessment lien.6 The lien an association actually uses arises from its recorded declaration, which typically makes unpaid assessments a continuing lien on the owner's lot or unit. Foreclosure of that lien proceeds as the declaration and general South Dakota law permit: by judicial action in the manner of a mortgage foreclosure, and in some communities by a non-judicial process where the documents and law allow.
The controlling priority point: South Dakota is not a super-lien state. The association's assessment lien is generally subordinate to a prior first mortgage, and a first-mortgage foreclosure can extinguish the association lien. Boards and managers should therefore confirm the lien language and recording against the declaration, expect to stand behind the first mortgagee, and treat collection as governed by both the documents and federal overlays — in particular the Fair Debt Collection Practices Act.
Section 3: Assessment limits and procedures in practice
A. Regular assessment increase procedure
The board adopts the annual budget and the resulting regular assessment under the authority and procedure set out in the recorded declaration and bylaws — declaration-defined, with no statutory rule fixing the increase or the meeting steps. This applies to condominiums (SDCL Chapter 43-15A communities, where the master deed and bylaws control) and non-condominium HOAs alike (covenants plus the Nonprofit Corporation Act, Title 47).2 There is no statutory deemed-ratification step, so notice, quorum, and the effective date come from the documents and — for incorporated associations — the corporate-meeting provisions of Title 47.
B. Special assessment procedure
A special assessment requires authorization and must stay within the bounds set by the declaration and bylaws, including any owner-vote requirement — declaration-defined, with no statutory percentage cap or statutory approval threshold. This applies to both condominiums and non-condominium HOAs. Notice and any member-approval percentage come from the recorded documents; boards of incorporated associations should also follow the member-meeting and notice rules in Title 47.
C. Caps, ceilings, and override mechanisms
South Dakota provides no statutory percentage cap or ceiling on regular or special assessments; any cap or override is declaration-defined. This applies to both condominiums and non-condominium HOAs. Because the limit is contractual, the override path — for example, a member vote to exceed a documented cap — is whatever the declaration specifies. The firearms-preemption definition added in 2024 (SDCL 11-5-9) confirms that the lien-and-assessment power itself rests on the recorded documents.5
D. Notice, documentation, and disclosure tied to assessments
Assessment notice and the lien instrument are declaration-defined; no condominium-chapter rule prescribes them. One statutory disclosure does apply on resale: SDCL 43-4-44.1 requires a seller of residential real property governed by a homeowners' association to furnish, before the buyer's written offer, a disclosure that the property is in an HOA, a copy of the governing documents, a statement of any assessment and its amount, frequency, and purpose, and a list of any one-time special assessments from the most recent three years.7 This resale-disclosure duty applies to non-condominium HOA property; condominium developers must separately deliver Real Estate Commission public reports before a binding sale under Chapter 43-15A.2
Section 4: Recent legislative and judicial activity
South Dakota sees low HOA-specific legislative activity, and no 2025 or 2026 enactment changed the assessment or lien provisions. Because the condominium chapter contains no assessment or lien sections to amend, the most recent enacted measures bearing on HOA governing-document and lien authority sit in Title 11, Chapter 5 — Restrictive Contracts and Declarations.
A. Recent bills
SB 39 · 2024 Regular Session
The Governor signed Senate Bill 39 on February 6, 2024, and it now sits in the code at SDCL 11-5-9 (SL 2024, ch 42). The bill does not touch any assessment limit, but it carries an important definitional move: the statute defines "homeowners' association" as an entity with authority "to assess and record liens against the real property of its members," anchoring both assessment and lien power in the recorded documents rather than in a state assessment code.[8],[5]
| Property managers | Drive collections from the declaration and bylaws, not from a state assessment code — that is where the authority actually sits. |
| HOA board members | Boards retain wide latitude on assessments, but any firearms restrictions in governing documents are now unenforceable. |
| Community association attorneys | The statutory HOA definition is a useful anchor when arguing that assessment and lien rights flow from recorded covenants. |
| Homeowners | A board's assessment power is real and document-based; firearms restrictions in the documents are no longer enforceable. |
HB 1240 · 2024 Regular Session
The Governor signed House Bill 1240 on March 26, 2024, and it is codified at SDCL 11-5-11 (SL 2024, ch 44). Where a declaration is silent on modification, the law now permits an amendment by a two-thirds vote of the owners governed by that declaration — which matters directly to assessments, because assessment authority and any documented cap live in the declaration itself.[9],[10]
| Property managers | This provides a default path to amend assessment-related covenant terms when the declaration gives no procedure for doing so. |
| HOA board members | Boards can pursue a two-thirds owner vote to modify a silent declaration, including its assessment provisions. |
| Community association attorneys | The statute supplies a statutory amendment threshold to rely on where the recorded instrument omits one. |
| Homeowners | Changes to assessment-related covenants require a two-thirds owner vote when the documents provide no amendment procedure. |
B. Recent rulings
South Dakota's Supreme Court is not rewriting HOA law from the bench. What it is doing is more targeted: holding that widely ignored covenants lose their enforceability, which carries direct weight in a state where assessment authority depends entirely on those same recorded covenants.
Hood v. Straatmeyer, 2025 S.D. 12
On appeal from the Circuit Court of the Fourth Judicial Circuit, Meade County (the Honorable Kevin Krull), the Supreme Court affirmed a judgment declaring a 1976 Shadowland Ranch subdivision covenant void. In a unanimous opinion by Justice Scott P. Myren, the Court held that "it is within the equitable power of a circuit court to declare a covenant void upon a showing that enforcement of the covenant would be inequitable in light of widespread, unchallenged violations which undermine the purpose of the covenant," finding that bringing every home into compliance would be "impractical and harmful." The holding bears directly on assessment authority: in South Dakota, that authority rests on the same recorded covenants, and a covenant rendered unenforceable through waiver or acquiescence may no longer serve as the basis for an assessment or charge.[11]
| Property managers | Enforce covenant and assessment terms consistently — selective or dormant enforcement can void the underlying covenant. |
| HOA board members | Uniform, documented enforcement protects the covenants that authorize assessments. |
| Community association attorneys | Waiver and acquiescence are live defenses to covenant-based assessment and enforcement claims. |
| Homeowners | A long-ignored covenant may be unenforceable, which can affect related charges tied to it. |
C. Active legislative debates
No bill in the 2025 or 2026 South Dakota legislative session proposed an assessment cap, a budget-ratification mechanism, or a super-priority assessment lien. The recent direction of change has been covenant administration in Title 11, Chapter 5 — not assessment limits.
Section 5: National positioning and related coverage
South Dakota sits at the deregulated end of the assessment-limit spectrum. In statutory-cap states led by California, Cal. Civ. Code Section 5605(b) bars a board from imposing "a regular assessment that is more than 20 percent greater than the regular assessment for the association's preceding fiscal year or impose special assessments which in the aggregate exceed 5 percent of the budgeted gross expenses of the association for that fiscal year without the approval of a majority of a quorum of members." Ratification-mechanism UCIOA states pair a deemed-ratified budget step with, in many cases, a super-priority assessment lien; under UCIOA Section 3-116(c) that lien stands prior to a first mortgage to the extent of common-expense assessments that would have become due during "the six months immediately preceding institution of an action to enforce the lien." Per the Community Associations Institute, Alaska, Colorado, Minnesota, Nevada, and West Virginia enacted the 1982 UCIOA, and Connecticut, Delaware, Vermont, and Washington enacted the 2008 version.
South Dakota does neither. The state has a condominium disclosure chapter and a separate time-share chapter, has not adopted a planned-community act or the super-priority lien, and leaves the association lien subordinate to the first mortgage. For a multi-state operator entering South Dakota, the recorded declaration and bylaws — not a state cap or ratification statute — are the controlling compliance document, and underwriting should not assume any super-lien recovery. Because South Dakota has no intermediate appellate court, an assessment dispute runs from the Circuit Court directly to the Supreme Court of South Dakota, as in Hood v. Straatmeyer.1
Editor's note on source corrections
This page draws from the official South Dakota Codified Laws, the South Dakota Legislature bill records, and the published opinion of the Supreme Court of South Dakota. Three points commonly stated in secondary sources do not hold up against the primary text and have been corrected here: SDCL Chapter 43-15B is "Time-Share Estates," not a planned-community act (South Dakota has none); SDCL 43-15A-29 is a construction-lien apportionment provision, not an HOA assessment lien; and the 25-to-40-year covenant-duration change was made in 2021 (HB 1084, codified at SDCL 11-5-4), not in a 2024 bill, so it does not appear as recent activity in Section 4. South Dakota's condominium chapter contains no assessment cap, no budget-ratification step, and no super-priority lien, and those features have not been imported into this page.
- South Dakota Unified Judicial System, Court Structure (no intermediate appellate court) ↩
- S.D. Codified Laws ch. 43-15A, Condominiums ↩
- S.D. Codified Laws tit. 43 chapter index (listing ch. 15B as Time-Share Estates) ↩
- South Dakota Real Estate Commission ↩
- S.D. Codified Laws § 11-5-9, Firearms Regulation — Homeowner Association Restriction Unenforceable (SL 2024, ch 42) ↩
- S.D. Codified Laws § 43-15A-29, Lien for Erection, Repair, or Improvement of a Single Development — Apportionment of Liens ↩
- S.D. Codified Laws § 43-4-44.1, Additional Disclosure — Residential Real Property Under a Homeowners' Association ↩
- South Dakota Legislature, Senate Bill 39 (2024), official bill page ↩
- South Dakota Legislature, House Bill 1240 (2024), official bill page ↩
- S.D. Codified Laws § 11-5-11, Modification of a Restrictive Covenant — Two-Thirds Vote (SL 2024, ch 44) ↩
- Hood v. Straatmeyer, 2025 S.D. 12, Supreme Court of South Dakota, Opinion No. 30180 ↩