South Dakota Deeds and Real Estate Transfers

What Types of Deeds Are Recognized in South Dakota?

South Dakota law recognizes several types of deeds a property owner can use to transfer title during the owner’s life. The most important distinction between South Dakota’s deed types is the warranty of title—or covenants of title—each deed provides.

Warranty of title is a guarantee from the current owner (the grantor) to the new owner (the grantee) that the new owner is receiving clear, undisputed title to the property. Warranty of title protects the new owner from problems with the property’s title like unpaid liens or mortgages, boundary disputes, or a flawed chain of title caused by an error in an earlier deed or estate. Different forms of deeds offer stronger, weaker, or no warranties.

South Dakota Warranty Deed Form

A South Dakota warranty deed—sometimes called a general warranty deed—provides the most thorough warranty of title.¹ The current owner guarantees a clear title—subject to no undisclosed liens or other encumbrances—and agrees to defend the new owner’s title against adverse claims.² There is no date limitation on the warranty. The current owner will take responsibility for any title issues not expressly excluded by the deed—regardless of when an issue arose.

South Dakota Special Warranty Deed Form

A South Dakota special warranty deed—also called a limited warranty deed or grant deed—includes a warranty similar to that of a general warranty deed, but with an important caveat.³ The current owner’s guarantee covers only title problems caused by actions of the current owner or someone claiming through the current owner.⁴ That means in practical terms that the warranty is limited. It extends to issues that arose while the current owner held title but not to issues rooted earlier in the property’s history.

Special warranty deeds divide the financial risk of unknown title problems between the current owner signing the deed and the new owner receiving the property. South Dakota law assumes a deed that says the current owner “grants” the property to the new owner is a special warranty deed—unless the deed expressly modifies the deed’s warranty.⁵

South Dakota Quitclaim Deed with Covenant Form

A South Dakota quitclaim deed with covenants is a statutory deed form that is very similar to a special warranty deed for most practical purposes. Quitclaim deeds without covenants that use South Dakota’s statutory standard form provide two implied covenants of title from the current owner:⁶

1. The owner has not transferred the property to anyone else before signing the quitclaim deed.
2. The property is subject to no liens, mortgages, assessments or other encumbrances caused by anything the current owner did or failed to do.⁷

South Dakota Quitclaim Deed without Covenants Form

South Dakota’s quitclaim deed law allows a property owner to restrict a statutory quitclaim deed’s implied covenants through express language in the deed.⁸ The result is commonly called a South Dakota quitclaim deed without covenants.

A quitclaim deed without covenants is basically a common-law quitclaim deed. It transfers real estate with no covenants or warranty of title. The new owner receives whatever interest the current owner has the power to transfer with no promises regarding the property’s title. Common-law quitclaim deeds place all risk of title problems with the new owner and are typically used for transactions involving no consideration given for the property.

What Types of Estate Planning Deeds Are Used in South Dakota?

South Dakota law allows property owners to retain possession for life and transfer property upon the owner’s death using either a transfer-on-death (TOD) deed or a life estate deed. TOD deeds and life estate deeds are popular tools for estate planning because they allow real estate to pass to the named beneficiary without going through probate.

South Dakota Transfer-on-Death Deed Form

A property owner can sign and record a South Dakota transfer-on-death deed to name a beneficiary to take title when the owner dies.⁹ A TOD deed is recorded in the land records but has no current effect on the owner’s rights in the property.¹⁰ The deed does not limit the owner’s power to sell or transfer the property and may be revoked at any time until the owner’s death.¹¹ The beneficiary receives no enforceable interest in the property until title automatically passes to the beneficiary upon the owner’s death.

South Dakota Life Estate Deed Form

A South Dakota life estate deed form also lets an owner retain possession for life and name a beneficiary to take title when the owner dies. An owner who records a life estate deed typically retains a life estate—or ownership for the rest of the owner’s life.¹² The owner grants the right to own the property when the owner dies (the remainder) to another person called the remainder beneficiary or remainderman.

A life estate deed’s key difference from a TOD deed is that when a life estate deed is signed and recorded, the beneficiary receives a vested right to future possession of the property.¹³ The owner—or life tenant—has most of the same property rights as someone who holds complete title. However, the life tenant cannot do anything to hinder the future interest.¹⁴ That means a life tenant can transfer the life estate but can transfer complete ownership of the property only with the remainder beneficiary’s consent.

What Are the Ways in Which Multiple Owners Can Jointly Own South Dakota Real Estate?

Two or more persons can jointly hold title to real estate using one of the three forms of co-ownership permitted in South Dakota—tenancy in common, joint tenancy, and partnership.¹⁵

Tenancy in Common

Tenancy in common is South Dakota’s default co-ownership form.¹⁶ Two or more persons who jointly own South Dakota real estate are tenants in common unless the deed transferring the property to them states that they are joint tenants or partners.¹⁷

Tenants in common hold separate interests in the same property. A tenant in common’s interest is usually described as a fraction or percentage of the property. It becomes part of a co-owner’s probate estate when the co-owner dies.

Joint Tenancy

Joint tenants mutually own equal shares in real estate with a right of survivorship. When a joint tenant dies, his or her interest automatically vests in the surviving joint tenant. For example, if married spouses co-own real estate as joint tenants, the surviving spouse takes complete title to the property upon the other spouse’s death.

A joint tenancy interest does not become part of a co-owner’s probate estate due to the right of survivorship. A deed creating a joint tenancy—sometimes called a survivorship deed—can be a useful estate-planning tool because it allows real estate to bypass probate.¹⁸ A surviving joint tenant need only record an affidavit of confirmation—sometimes called a survivorship affidavit—to update the land records to reflect the survivor’s sole ownership of the property.¹⁹

To create a joint tenancy, a South Dakota deed must expressly state that the new owners take title as joint tenants.²⁰ An exception is that South Dakota law assumes two or more trustees who receive real estate under the same deed are joint tenants.

Partnership

Two or more persons own South Dakota real estate in partnership when they take title as partners for partnership purposes.²² Co-owners take title to South Dakota real estate as partners if the deed transfers real estate (1) to the partnership itself or (2) to one or more partners in their capacity as partners if the deed mentions the partnership’s name.²³

Co-owners who hold real estate as partners are typically acquiring the property for a commercial or investment purpose rather than as a residence.

Real Estate Ownership through Trusts

Two or more persons can jointly control and benefit from South Dakota real estate as co-beneficiaries and co-trustees of a living trust. A trust that owns South Dakota real estate must be evidenced by a written document describing the trust’s terms.²⁴

South Dakota is often rated as one of the best jurisdictions for trusts and allows considerable overlap between a trust’s three essential parties:

1. The trustor (or settlor in some states). The person who creates the trust by transferring property to a trustee.
2. The trustee. The person who holds legal title and manages trust property.
3. The beneficiary. The person for whose benefit the trustee holds trust property.²⁵

The trustor can also be the trust’s trustee and beneficiary—as long as the trust has a successor who becomes beneficiary after the individual’s death.²⁶ Thus, South Dakota property owners can use a revocable living trust to control and benefit from real estate during life and to transfer the property outside probate at death.

What Are the Rules for Spousal Ownership of South Dakota Real Estate?

South Dakota law gives a married person substantial rights in the other spouse’s property—including inheritance rights and the right to have a say in transfers affecting the family homestead. When creating a deed or estate plan, married property owners should consider the consequences of spousal rights.

South Dakota Homestead Rights

A homestead is a dwelling home used as the property owner’s principal residence—plus the land on which the home sits.²⁷ The land area included within a South Dakota homestead cannot exceed 1 acre in a town or 160 acres outside of a town.²⁸

Both spouses must agree to a transfer of a South Dakota homestead owned by a married person—even if only one spouse holds title.²⁹ Spouses agree to a transfer by signing the same deed or by signing two separate deeds with the same transfer terms.³⁰ The requirement for both spouses’ signatures on a homestead transfer applies only if both spouses are South Dakota residents.

South Dakota also gives surviving spouses a priority right to inherit the family homestead upon the other spouse’s death.³¹

Spousal Intestate Share

If a South Dakota resident dies intestate—that is, without a will—the surviving spouse usually receives all of the deceased spouse’s real estate and personal property. A surviving spouse’s intestate share is reduced to $100,000.00, plus half of the remainder of the estate, if the deceased spouse leaves children not descended from the surviving spouse.³²

Spousal Elective Share

South Dakota’s elective share law gives a surviving spouse the right to claim a statutory share of a deceased spouse’s estate rather than the share provided under a will.³³ The elective share protects spouses from disinheritance but can be waived in advance through an agreement signed by the spouse—such as a prenuptial agreement.³⁴

A surviving spouse’s elective share amount is 3 to 50 percent of the deceased spouse’s augmented estate, which includes net probate assets, the value of certain assets transferred outside probate, and the value of the surviving spouse’s assets.³⁵ The exact percentage is based on how long the spouses were married—with higher percentages awarded for longer marriages.³⁶

Where Are Deeds Filed in South Dakota?

South Dakota law makes each county’s register of deeds responsible for keeping the county’s land records.³⁷ A deed must be recorded with the register of deeds of the county where the real estate is located.³⁸

A recorded deed serves as constructive notice of the deed to all later purchasers and creditors.³⁹ Unrecorded deeds are valid only between the parties to the deed and other persons with actual notice of the deed.⁴⁰

Does South Dakota Allow Electronic Recording?

The South Dakota Legislature has adopted the Uniform Real Property Electronic Recording Act (URPERA)—which authorizes electronic recording (or e-recording) in participating counties.⁴¹ Counties that have adopted e-recording programs accept deeds filed electronically or in paper format.⁴²

An electronic signature that complies with URPERA and the standards adopted by South Dakota’s electronic recording commission qualifies as the owner’s original signature.⁴³

What Is the Cost to File a South Dakota Deed?

South Dakota law requires a recording fee—payable to the register of deeds—for recording deeds and other instruments. The fee amount for deeds is $30.00 for up to 50 pages and an additional $2.00 per page for each page over 50.⁴⁴ The register of deeds must endorse the recording fee amount on the deed at the time of recording.⁴⁵

Does South Dakota Charge a Transfer Tax for Real Estate Transfers?

South Dakota charges a transfer tax—called a real estate transfer fee—for transferring title to South Dakota real estate.⁴⁶ The tax rate is $0.50 for each $500.00 of the property’s value. A property’s value is the full consideration provided in exchange for the property unless the transfer is a gift. Consideration includes anything with legal value provided in exchange for real estate—whether provided in the past, present, or to be provided in the future.⁴⁷

The register of deeds collects the real estate transfer fee at the time of recording.⁴⁸ The current owner who is transferring property is responsible for paying the fee.⁴⁹

Which Deeds Are Exempt from South Dakota’s Transfer Tax?

South Dakota law exempts certain types of transfers from the real estate transfer fee.⁵⁰ To claim an exemption, a deed must include the words “exempt from transfer fee” and identify the applicable exemption.⁵¹

Deeds exempt from transfer fees include:

• Deeds transferring real estate from an individual to another individual as an absolute gift for no consideration of any kind;⁵²
• Deeds for which no consideration was given;⁵³
• Deeds between spouses—or between parent and child—for only nominal actual consideration;⁵⁴
• Deeds required by a divorce decree or a settlement agreement adopted by a divorce decree;⁵⁵
• Deeds from a trustee or other fiduciary to a beneficiary, or from a trustee or fiduciary to a third party if the transfer accommodates the fiduciary relationship;⁵⁶
• Deeds transferring real estate from a deceased person’s estate pursuant to a distribution decree;⁵⁷
• Deeds between an LLC and its members;⁵⁸
• Deeds from one or more individuals to a corporation or partnership when the transferor is the corporation’s or partnership’s majority owner;⁵⁹
• Deeds confirming or correcting a previously recorded deed;⁶⁰
• Deeds to or from the US, State of South Dakota, or any agency or subdivision of either;⁶¹
• Deeds arising from tax sales or foreclosures and deeds in lieu of foreclosure;⁶²
• Deeds transferring partitioned property;⁶³
• Deeds pursuant to a merger or consolidation of LLCs or corporations or pursuant to a reorganization transferring substantially all of the entity’s assets;⁶⁴
• Deeds from a subsidiary to a parent corporation for no or nominal consideration or solely for cancellation or surrender of the subsidiary’s stock;⁶⁵
• Deeds from an LLC or corporation to the entity’s owners or creditors when the transfer is necessary to the entity’s dissolution;⁶⁶ and
• Deeds transferring cemetery lots or grave sites.⁶⁷

Does South Dakota Require Any Additional Forms When Recording a Deed?

A deed used in the purchase, exchange, transfer, or assignment of South Dakota real estate must be accompanied by a certificate of real estate value (Form PT 56) when the deed is presented for recording.⁶⁸ Form PT 56 is published by the Department of Revenue.⁶⁹

The completed form must state:

• The buyer’s and seller’s names and addresses;
• A legal description of the real estate;
• The actual consideration provided for the property;
• The relationship between buyer and seller (if any); and
• The payment terms if other than payment in full at the time of sale.⁷⁰

Transfer-on-death deeds need not be accompanied by a certificate of value.⁷¹

1. See S.D. Cod. Laws § 43-25-5.
2. S.D. Cod. Laws § 43-25-6.
3. See 2002 SDTS § 43-30S-7-05.
4. S.D. Cod. Laws § 43-25-10.
5. S.D. Cod. Laws § 43-25-10.
6. S.D. Cod. Laws § 43-25-7.
7. S.D. Cod. Laws § 43-25-11.
8. S.D. Cod. Laws § 43-25-11.
9. S.D. Cod. Laws § 29A-6-403.
10. S.D. Cod. Laws § 29A-6-413.
11. S.D. Cod. Laws § 29A-6-405.
12. S.D. Cod. Laws § 43-7-1(2).
13. S.D. Cod. Laws § 43-3-7.
14. S.D. Cod. Laws § 43-8-1.
15. S.D. Cod. Laws § 43-2-11.
16. S.D. Cod. Laws § 43-2-16.
17. S.D. Cod. Laws § 43-2-17.
18. See, e.g., S.D. Cod. Laws § 43-2-13.
19. S.D. Cod. Laws § 29A-6-427.
20. S.D. Cod. Laws § 43-2-12.
21. Schimke v. Karlstad, 208 N.W.2d 710, 714 (S.D. 1973).
22. S.D. Cod. Laws § 43-2-15.
23. S.D. Cod. Laws § 48-7A-204, 2002 SDTS § 43-30S-4-02.
24. S.D. Cod. Laws § 55-1-4.
25. S.D. Cod. Laws § 55-1-12.
26. S.D. Cod. Laws § 55-1-15.
27. S.D. Cod. Laws § 43-31-2.
28. S.D. Cod. Laws § 43-31-4.
29. S.D. Cod. Laws § 43-31-17.
30. 2002 SDTS § 43-30S-5-07.
31. S.D. Cod. Laws § 29A-2-402.
32. S.D. Cod. Laws § 29A-2-102.
33. S.D. Cod. Laws § 29A-2-202.
34. S.D. Cod. Laws § 29A-2-213.
35. S.D. Cod. Laws § 29A-2-203.
36. S.D. Cod. Laws § 29A-2-202.
37. S.D. Cod. Laws § 7-9-1.
38. S.D. Cod. Laws § 43-28-1.
39. S.D. Cod. Laws § 43-28-15.
40. S.D. Cod. Laws § 43-28-14.
41. S.D. Cod. Laws §§ 7-9A-1, et seq.
42. S.D. Cod. Laws § 7-9A-3.
43. S.D. Cod. Laws § 7-9A-2.
44. S.D. Cod. Laws § 7-9-15(1).
45. S.D. Cod. Laws § 43-28-11.
46. S.D. Cod. Laws § 43-4-21.
47. S.D. Cod. Laws § 43-4-20(1).
48. S.D. Cod. Laws § 43-4-24.
49. S.D. Cod. Laws § 43-4-21.
50. S.D. Cod. Laws §§ 43-4-22(1)-(19).
51. S.D. Cod. Laws § 43-4-23.
52. S.D. Cod. Laws § 43-4-22(16).
53. S.D. Cod. Laws § 43-4-22(17).
54. S.D. Cod. Laws § 43-4-22(5).
55. S.D. Cod. Laws § 43-4-22(17).
56. S.D. Cod. Laws § 43-4-22(15).
57. S.D. Cod. Laws § 43-4-22(10).
58. S.D. Cod. Laws § 43-4-22(18).
59. S.D. Cod. Laws §§ 43-4-22(11) and (14).
60. S.D. Cod. Laws § 43-4-22(4).
61. S.D. Cod. Laws § 43-4-22(2).
62. S.D. Cod. Laws § 43-4-22(6).
63. S.D. Cod. Laws § 43-4-22(7).
64. S.D. Cod. Laws § 43-4-22(8).
65. S.D. Cod. Laws § 43-4-22(9).
66. S.D. Cod. Laws § 43-4-22(12).
67. S.D. Cod. Laws § 43-4-22(13).
68. S.D. Cod. Laws § 7-9-7(4).
69. S.D. Cod. Laws § 7-9-7.2.
70. S.D. Cod. Laws § 7-9-7(4).
71. S.D. Cod. Laws § 7-9-7(5).