A bill letting clinics override covenants passed the House, then died 5-0
A bill letting clinics override covenants passed the House, then died 5-0
2026-09-19 · South Dakota · Legislation · Did not pass
Only two bills in two South Dakota sessions attacked the enforceability of a recorded declaration. One became law. The other passed a chamber and died.
House Bill 1105 of the 2026 session, sponsored by Representative Overweg and Senator Pischke with ten sponsors in total, would have voided covenants standing between a property and a medical clinic in an underserved area.1
Its path: House State Affairs reported it 7-4 on February 9, 2026. The House passed it 45-20 on February 11. Senate Health and Human Services tabled it 5-0 on February 25. Fourteen days from floor passage to unanimous death in committee.
What it said
Section 2 of the engrossed bill:
“Notwithstanding the provisions of § 11-5-1, an owner of real property zoned for commercial or residential use may not impose, by contract or declaration as set forth in § 11-5-2, any regulation or restriction that prohibits use of the real property for a healthcare service, if the real property is located in a medically underserved area, a medically underserved community, or a county with a medically underserved population, as designated by the Department of Health in accordance with the Public Health Service Act, 42 U.S.C. ch. 6A (January 1, 2026).”
And section 1 would have added to SDCL 11-5-3: “A contract or declaration in violation of section 2 of this Act is not enforceable.”
The design is unusual, and worth understanding
Most covenant-override statutes are subject-matter overrides: they name a thing — a solar panel, a flag, a satellite dish — and say a covenant may not forbid it, everywhere in the state. South Dakota's one enacted example, SDCL 43-12-7 on firearms, works that way.
HB 1105 was geographic. The same covenant would have been void in one county and enforceable in the next, and the line would have been drawn by a federal designation under the Public Health Service Act that the state Department of Health applies. A designation can change. A recorded covenant cannot.
That is a genuinely novel structure for covenant law, and it is also the most likely explanation for a unanimous committee table after a comfortable floor vote: the policy is sympathetic and the mechanism is hard.
The reach was residential, not just commercial
Read the operative clause again: “real property zoned for commercial or residential use.” Both. A restriction in a residential subdivision's declaration limiting lots to single-family residential use would have been unenforceable against a healthcare use in a qualifying area.
South Dakota has a lot of qualifying area. Medically underserved designations reach much of the rural part of the state, which is much of the state.
The bill also left “healthcare service” undefined in the quoted text, which in a state where the Supreme Court resolves undefined covenant terms with a dictionary would have been the first thing litigated.
What its failure preserves
SDCL chapter 11-5, Restrictive Contracts and Declarations, stands unamended — all eleven sections, verified against their source notes, with no 2025 or 2026 change. A South Dakota declaration's residential-use restriction is enforceable against a clinic, a dental practice, a counselling office or a dialysis centre exactly as it is against any other non-residential use.
Our short-term rentals page covers the same clause doing its most litigated work, and architectural review covers who decides what a use is.
Why this one is likely to return
Three reasons, and they are not sentimental. It passed a chamber, which most bills of this kind never do. It had ten sponsors across both houses. And the underlying pressure — rural healthcare access in a state with a large medically underserved footprint — is not going away because a committee tabled a bill.
A second version would face the same structural objection unless it changes shape: a statewide subject-matter override, or a route through zoning rather than through covenants, would each avoid the geographic-variability problem that this draft created.
What to watch next
The 2027 session convenes in January, with pre-filed bills generally visible from about December 1. The question is whether HB 1105 returns as written, which failed unanimously in committee, or redrafted — and a redraft that dropped the geographic trigger would be a materially broader bill, reaching every declaration in the state rather than those in designated areas.
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