A municipal special assessment is presumed valid, and current use does not limit it
A municipal special assessment is presumed valid, and current use does not limit it
2026-09-19 · South Dakota · Courts
South Dakota's only special-assessment decision of this cycle tells a property owner how hard it is to beat one. KJD, LLC v. City of Tea, 2025 S.D. 22, filed April 9, 2025, affirmed.1
The burden, stated plainly:
“It was KJD's burden to show by clear and convincing evidence that the City's findings and determinations were not correct as to its property.”
Not a preponderance. Clear and convincing — the standard usually reserved for fraud and for terminating rights.
And the argument that does not work
“[T]he benefits to the land may not be limited by the present use of the property.”
An owner who says the improvement does nothing for the land as it stands today is making the wrong argument. The question is benefit to the land, and land has future uses.
The court identified what counts as a special benefit — street lighting, sidewalks, access control, water main, fire hydrants and drainage — and the test they satisfy: benefits that are “actual, physical and material and not merely speculative or conjectural.”
Why this reaches an association
Because a municipal special assessment is the one charge a community can receive that its board has no say over and no ability to refuse.
An association holding common area with street frontage — a private road parcel meeting a public street, a clubhouse lot, an open-space strip along a boulevard, a stormwater tract — is an abutting landowner like any other. When the city runs an improvement project, the assessment lands on those parcels, and the association pays it out of the same budget that funds everything else.
The list of improvements above describes precisely the work that gets done at the edge of a subdivision: lighting, sidewalks, water main, hydrants, drainage.
And unlike an association assessment, this one is not up for a vote. Our budget approval page covers the side a board does control.
What the case tells a board about contesting one
Arguing from current market value is arguing the wrong thing. KJD's approach was to say the assessment exceeded the benefit measured against the property's value and use as it stood. The court's answer is that present use does not bound the benefit.
The evidence has to be put on. An owner who does not present contrary testimony at a trial has not met a clear-and-convincing burden, whatever the pleadings say.
And the fee exposure runs one way. A South Dakota owner who appeals a property assessment and loses may be ordered to pay costs; one who wins has no statutory right to recover fees. SB 208 would have fixed that, passed the Senate 34-0, and was tabled 12-0 in House Taxation.
Taken together: a presumption of validity, a clear-and-convincing burden, a benefit test that ignores current use, and asymmetric fee exposure. That is a steep hill, and the decision to climb it is a budget decision before it is a legal one.
The related change in 2025
HB 1173 of the 2025 session eliminated the cap on special assessment amounts for road improvements. So the ceiling on what can be assessed for road work came off in the same period the courts confirmed how hard the charge is to contest.
And SB 90 of the same session confirmed that past-due installments of municipal special assessments under SDCL chapter 9-43 survive a tax deed — while association assessments are not on the list of surviving claims. Our piece on that change covers the distinction, which is the one most often collapsed: the municipal special assessment and the association special assessment share a name and behave nothing alike.
What a growing city does with this
Sioux Falls approved special assessment rolls in August 2026 covering tree trimming, snow removal and sidewalk repairs — work the city performed and then billed to abutting owners. Boulevard trees between sidewalk and street are the adjacent owner's maintenance responsibility under city ordinance, and under the emerald ash borer program the city removes public ash while owners are responsible for treating any they wish to keep.
For an association maintaining common frontage, the consequential question is administrative rather than legal: whether the city has the association or an individual member recorded as the adjacent owner. That determines who receives the letter.
What to watch next
Whether the removal of the road-improvement assessment cap produces larger assessments in the growth corridors around Sioux Falls, Harrisburg, Tea and Box Elder — and whether any of them are contested, now that the standard for contesting them is on the books in a published decision.
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