South Dakota foreclosure law

South Dakota allows foreclosures on mortgages and deeds of trust in default. Both judicial and non-judicial processes may be followed, which means that lenders can foreclose in or out of court. A South Dakota foreclosure typically lasts 90 days, or approximately three months.

Judicial foreclosure
A judicial foreclosure is used when the contract does not contain a Power of Sale. This clause would otherwise allow the lender to foreclose without going to court. In a South Dakota judicial foreclosure, the lender starts by filing a lawsuit against the borrower. If the court rules in favor of foreclosure, it issues a court order to foreclose and the home is sold via public auction.

Non-judicial foreclosure
If the mortgage or deed of trust includes a Power of Sale clause, the lender can proceed in a non-judicial foreclosure. The Power of Sale basically states that the borrower has pre-authorized the lender to sell off the home as payment in case he or she defaults. The power can be exercised by the lenders themselves or an appointed representative known as the trustee.

The terms specified in the Power of Sale are usually followed throughout the non-judicial foreclosure. However, if the clause does not contain the time, place, and other details concerning the sale, the following procedures are carried out:

1) The lender publishes a foreclosure notice in a newspaper circulated in the county where the home is located. The ad appears at least once a week for four consecutive weeks. The notice should contain the name of the lender and borrower, the date the mortgage was signed, the total amount due, a description of the property, and the time, date, and place of the foreclosure sale.

2) The borrower is served with a copy of the notice at least 21 days before the scheduled sale date. The copy is also given to any lien holders with interest in the property.

3) The sale is conducted by the county sheriff or deputy, any time from 9am to 5pm on a working day. Bidding is open to everyone, including the lender, and the winning bidder is issued a certificate of sale.

If the sale has to be postponed, a notice saying so should be published in the same newspaper as the original. The ad should be published continuously until the new sale date.

Right of redemption
Unless the mortgage has special provisions for short-term redemption, the general Right of Redemption period is one year. This means that the borrower has one year from the date of the sale to pay the foreclosure sale price and redeem his property. In South Dakota, however, the redemption period is reduced to 180 days for properties measuring 40 acres or less. This is further reduced to 60 days if the home is unoccupied or abandoned.

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