A South Dakota roofing contract can be cancelled in 72 hours
A South Dakota roofing contract can be cancelled in 72 hours
2026-09-19 · South Dakota · Compliance
The most useful consumer-protection statute for a South Dakota association after a hailstorm is in the deceptive practices title, and it reaches entities as well as individuals.
Two sections, both enacted in 2012 as chapter 198 of that year's session laws.
A deductible rebate voids the contract
SDCL 37-24-50:
“No contractor providing residential roofing goods and services to any person or entity may advertise or promise to pay or rebate all or part of any applicable insurance deductible. If a contractor violates this section, any contract entered into between the contractor and that person or entity is null and void.”1
Note the reach: “any person or entity.” A homeowners or condominium association signing for work on common elements is inside the section. And note the remedy — not a penalty on the contractor, but the contract itself being null and void.
“We'll cover your deductible” is the standard pitch of the crews that follow a storm front across the plains. In South Dakota it is not a discount. It is the sentence that unmakes the agreement.
And a cancellation window that runs twice
SDCL 37-24-51:
“Any person or entity that has entered into a written storm damage repair contract to obtain or provide residential roofing goods and services may cancel the contract within seventy-two hours after: (1) Entering into the contract; or (2) Being notified that the owner's property insurance carrier has denied coverage, in whole or in part, for that person's or entity's claim under a property insurance policy for goods and services to be provided pursuant to the residential roofing goods and services contract.”2
The second trigger is the one that matters. The window does not merely run from signing; it opens again when the carrier denies the claim in whole or in part. A board that signs in the week after a storm and learns a month later that the carrier is paying a fraction has a fresh seventy-two hours.
The mechanics, which are unusually specific
Cancellation is by written notice to the contractor at the contract address. “Notice of cancellation, if given by mail, is effective upon deposit in a mailbox if properly addressed to the contractor and the postage is prepaid.” Deposit, not receipt — which removes the argument about when the contractor opened it.
The notice is informal in form: it “is sufficient if the notice indicates, by any form of written expression, the intention of the customer that the customer does not wish to be bound by the contract” — subject to payment of a reasonable documented restocking fee charged by the third-party supplier of the materials, and the agreed or reasonable cost of any emergency repairs already performed.
So cancellation is not free where materials were ordered or a tarp went on the roof. It is not conditioned on those payments either; the section makes the right subject to them rather than dependent on them.
The contractor has to hand you the form
Before entering the contract, the contractor must furnish a statement in boldface type of at least ten points, in substantially this form:
“You may cancel this contract within seventy-two hours after you: (a) Have entered into the contract; or (b) Have been notified that your property insurance carrier has denied coverage for your claim, in whole or in part, to pay for the goods and services to be provided under this contract. See attached notice of cancellation form for an explanation of this right.”
And a completed, captioned, easily detachable NOTICE OF CANCELLATION form in duplicate, also in ten-point boldface, which must state where to send it and that “[i]f you cancel, any payments made by you under the contract for any goods and services not actually performed will be returned within ten business days following receipt by the contractor of your cancellation notice.”
The contractor then has ten days after cancellation to tender back any payments and any note or other evidence of indebtedness for work not actually performed.
The absence of that form is itself informative. A storm-chasing crew that does not produce a detachable cancellation notice at signing is not following the statute.
Why this belongs in a South Dakota association's storm file
The sequence after a hailstorm is always the same and always compressed. Crews arrive within days. A board wants the roof covered before the next system. Contracts get signed before the adjuster has scoped the loss, and certainly before anyone knows what the carrier will pay.
These two sections are built for exactly that sequence. The second cancellation trigger exists because the legislature understood that the decision to commit is made before the information arrives.
And the stakes are association-sized. Where a master policy carries a percentage per-unit deductible, the difference between a covered replacement and a partial payment lands as a loss assessment on every member — the mechanism our insurance requirements page sets out, and the one that South Dakota's insurance regulator has never addressed in a bulletin.
One 2025 change that did not touch roofing
SB 93 of the 2025 session, signed March 6, 2025, created SDCL 37-24-50.1, extending the deductible-rebate ban to vehicle work: “No contractor in this state providing motor vehicle repair, auto body repair, or collision repair services to any person may: (1) Advertise, promise to provide, or offer any coupon, credit, or rebate to pay all or part of an applicable insurance deductible”.
It copied the 2012 roofing rule across to auto body. It added nothing on the roofing side, and it does not extend the cancellation right to vehicle repairs.
A second protection, new this year
HB 1066 of the 2026 session amended SDCL 44-9-13, in the mechanics' liens chapter, effective July 1, 2026:
“Any contractor, subcontractor, or supplier on any improvement of real estate within the purview of this chapter who, having received or been entrusted with the property of another for the purpose of improvement of real estate, and with the intent to defraud, appropriates that property for any purpose other than the payment for labor, skill, or materials for the improvement of the real estate for which it was received, is guilty of theft.”
That addresses the other failure mode: an association pays a general contractor, the subcontractors are never paid, and the subs lien the property. It is the only 2025 or 2026 amendment anywhere in chapter 44-9 — lien deadlines, notice rules and priority are unchanged. Our collections and liens page covers that chapter.
What to watch next
Nothing is pending on either section. The practical question is whether the seventy-two-hour form actually appears in the contracts circulating after the next major hail event, because the right is easy to state and easy to lose track of when the notice never arrives.
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