Introduction to Lease Agreements in South Dakota
A South Dakota lease agreement is a legally binding contract between a lessor/lessor and lessee/renter. The lessor is the owner of the property, person who is leasing out the property to the second party (lessee). The lessee may be an individual or company. It establishes the conditions of use of a property in South Dakota, including the length of time a tenant can stay at a property, any restrictions on the usage of the property by the tenant, and the amount of money the tenant will pay the landlord for using the property.
There are multiple types of lease agreements: residential, commercial, and industrial agreements, and the type of contract will dictate the specific terms and conditions of the agreement.
The major components of the lease agreement include:
A south Dakota residential lease agreement takes place between a tenant and landlord . This type of lease typically includes a description of the property, the amount of rent owed, the duration of the contract, and any restrictions and usage guidelines.
In South Dakota, a lease enters into force as of the date agreed upon by both parties, and as such, the tenant is required to pay rent on the agreed day, even if they take occupancy of the premise at a later date. Landlords are also required to pay any utilities that have not been paid in advance.
Although it is not common, South Dakota law does allow landlords and tenants to waive their rights and responsibility, in so far as standard practice dictates. Keep in mind that landlords are always responsible for adhering to these clauses, whereby a tenant has the right to hold them liable for any damages or liabilities sustained.
Essential Components of a South Dakota Lease Agreement
The parties involved in a lease agreement are its landlord(s) and tenant(s), which are all commonly referred to as the lessor and lessee. The lessor grants the lessee the right to occupy the property in exchange for the payment of rent. In South Dakota, a lease agreement must be for a term of years, but can also be on a month-to-month basis. It can be written, verbal or implied, but it is advisable to have a written agreement that covers all aspects of the lease so no issues arise in the future. The following are the key elements to a South Dakota lease agreement:
- (1) Identify the Landlord and Tenant. The lease should identify the parties, or their agents, in the first paragraph of the agreement. Make sure to use their proper names and specify their statuses (i.e. individual, business, etc.)
- (2) Identify the Property being Leased. In the first paragraph you will also want to specifically identify the property to be let by stating its address or providing a description of the property.
- (3) Lease Term. Obviously, the lease should specify the term of the lease (i.e. 2 years or 1 year with options to extend) and when the lease is to begin. For example, the lease could state: "This lease agreement shall be for one (1) year, commencing on March 1, 2011 and expiring on February 29, 2012."
- (4) Rent and Rent Payments. The most significant part of a lease agreement is the rent amount, when it is payable and how much it will increase, if at all, during the term of the lease. For example, the lease could state: "Tenant shall pay the Landlord rent for the Property in the sum of Five Hundred and No/100 ($500.00) dollars per month. Provided, however, that on February 1st of each year during the term of this lease the rent shall increase by five percent (5%)." It is also important to specify where and when the rent is due. The lease may state: "Rent shall be due on the 25th day of each month and delivered to the Landlord at the address above, in lawful money of the United States, without demand, set off, or counterclaim of any nature whatsoever." It may also be wise to include a provision allowing for late fees, if applicable. For example, "Upon failure of the Tenant to pay the rent when due, then the Tenant shall pay a late charge in the sum of Twenty Five ($25.00) per month until the delinquent rent is paid in full."
- (5) Deposits and Prepayments. Many landlords accept deposits and prepayments prior to the execution of the lease agreement. A security deposit is commonly accepted in case anything is damaged or any rent is due at the end of the lease term that was not paid. A prepayment is often accepted for the first month or last month’s rent should the tenant choose not to abide by their end of the bargain in performing all other aspects of the lease agreement. In order to protect the landlord, the following provisions may wish to be included in the lease agreement:
"(a) Tenant shall pay to Landlord a security deposit in the amount of which shall be refunded to the Tenant after the expiration of the term of this lease provided that the Tenant has faithfully performed and complied with each and all the terms, conditions and covenants of this lease. (b) The Landlord can deduct from the security deposit any amounts necessary to reimburse it for damages to the leased premises which are caused by the tenants or guests or by Tenant’s breach of this lease agreement."
(6) Quiet Enjoyment Provision. A lease agreement should have a provision where the landlord promises not to interfere with the tenant’s ability to peacefully enjoy and occupy the property. For example:
"The Tenant pays the rent and complies with the conditions of this lease and with all other legally constituted police power rules and regulations applicable to the leased premises Tenant shall have quiet enjoyment and peaceable possession of the Property."
(7) Subleasing. It is common to allow for subleasing in the lease agreement. The sublessee can be allowed to sublease the property with the consent of the landlord. For example:
"Tenant shall not rent, assign, transfer or sublet the premises, or any part thereof, without the written consent of the Landlord in each instance, which consent shall not be unreasonably withheld."
(8) Termination and Defaults. In order to ensure the lessor can remedy any defaults during or at termination of the lease, it is wise to provide the rights, if any, of the lessor when the lease expires or is terminated, as well as the rights of the landlord for defaults and nonpayment. For example:
"In the event of failure by Tenant to make rental payments as required, the Landlord may terminate this lease by giving the tenant ten (10) days’ written notice that this Lease, and all interests hereby created, shall cease and become void."
(9) Holdover. It is also wise to include a provision covering what happens if rent is not paid and the tenant is still occupying the property. For example:
"Holding Over. If the Tenant fails to pay any installment of rent, or any other sum due hereunder at the time specified, and the Tenant remains in possession of the premises thereafter, all of the covenants and conditions of this Lease shall continue to apply during such holding over so far as possible, and the Tenant shall pay as additional rent for such holding over an amount equal to one and one half (1 ½) times the daily rental rate in effect on the last day of the term hereof for each day of such holding over."
(10) Miscellaneous Provisions. While it is not necessary to cover all aspects of the relationship between the parties in a lease agreement, it is important to cover the key elements that will allow the parties to perform over the term of the agreement. Listed below are some miscellaneous provisions that should be covered:
Dispute Resolution. Choice of law provision which establishes governing law.
Legal Statutes and Ordinances for Lease Agreements in South Dakota
South Dakota has legal standards for these contracts as well. This includes entry of the security deposit, rules and responsibilities for payment of rent, notice of the increase in rent, termination and eviction, among others. A clear understanding of the laws and the inclusion of all pertinent information reduces the risk of misunderstandings.
For example, in South Dakota, the landlord can’t retain an additional 5 percent to 15 percent, up to a maximum of $50, from the security deposit for cleaning and damages. This money is meant to be an advanced payment for the last month’s rent in the event the tenant fails to pay rent. In fact, any security deposits of this type must be returned to the tenant within 14 days after the lease is terminated. If the landlord doesn’t return it within this timeframe, they are automatically entitled to receive an additional $100 or 30 percent of the deposit (whichever is less) from the next rent payment.
The tenant is required to give the landlord 30 days’ notice before moving out in order to avoid being on the hook for another month’s rent. The law also gives the landlord the right to keep the deposit if the tenant hasn’t provided them with their new forwarding address.
Clearly written and enforceable contract terms and conditions ensure that both the landlord and tenant are held to their end of the agreement.
Provisions Commonly Found in South Dakota Lease Agreements
You will often find similar lease clauses in a South Dakota rental agreement. A maintenance clause is one; this provision lists the landlord and tenant’s obligations about maintaining the premises. This will contain information on how tenants can make requests for repairs.
A pet clause may include specific rules on pets, such as the number of animals, allowed breeds, weight restrictions, and deposit information. Some rental units in South Dakota allow tenants to have pets while others prohibit them.
Another common rental agreement clause is one on renewal. Many South Dakota rental agreements run for 12 months. A renewal clause states if and when the lease will automatically renew.
Alteration clauses are quite common. These provisions state whether tenants can make changes to the rental unit, which could include painting or other adjustments.
How to Negotiate a South Dakota Lease Agreement
Negotiating lease terms in South Dakota is a critical process that requires open communication and a clear understanding of the priorities of both the tenant and the landlord. From the onset, it is essential for both parties to outline their objectives, such as the duration of the lease, the amount of rent to be paid, and any additional provisions that the lease should include. The parties should also set a realistic time frame for lease negotiations and seek to resolve all questions or issues as they arise.
Landlords in South Dakota should be prepared to provide any requested lease forms or drafts from the start of the lease negotiation. This can ensure the parties are negotiating in good faith and have a basis to begin the negotiation process. If the parties are not using a standard lease, then each party should have their own legal counsel review the draft lease and negotiate any desired adjustments with the other party. It is crucial that all negotiations be properly documented , whether done via email or another form of correspondence. Documenting the length of the negotiations as well as any issues addressed during the negotiation process can help avoid disputes down the road over the agreed terms of the lease.
The negotiation process can also involve face-to-face meetings between the parties and their attorneys. These meetings can often be the most productive as all parties are able to voice any concerns or questions directly with one another. In negotiating the terms of the lease, South Dakota’s statute of frauds, codified at SDCL 53-8-2, should also be consulted to ensure that the lease agreement is enforceable under state law. Once the lease has been written, it should then be reviewed by both parties and their attorneys. Each party should critically evaluate the lease in its entirety and not just focus on its specific areas of interest. It is vital that all parties have ample opportunity to review and ask questions about the lease before signing.
Termination and Eviction of Lease Agreements in South Dakota
The reasons for terminating a lease agreement in South Dakota include failure to pay rent, violation of some other substantial lease provision, unauthorized assignment of the lease, tenant bankruptcy, destruction of the property, or condemnation of the property. The amount of notice that a landlord must give depends on the issue. A 15-day notice is needed for failure to pay rent, 30 days for disorderly conducts or substantial lease violation, one day for termination due to bankruptcy, and one notice for destruction. The type of notice required and notice period can vary depending on the reason. Notice may be served by delivering a written notice to the tenant, posting the notice conspicuously on the leased property, or by mailing a copy to the dwelling unit by registered mail with return receipt requested. A landlord may request an expeditious hearing if a tenant switches utilities without the landlord’s permission. The court will hear the case for any other reason after 3 days’ notice or less if the court decides that it is in the best interests of the parties or the public health or safety.
After providing the requisite notice and obtaining an eviction order, a landlord may not forcibly evict a tenant. A sheriff or a deputy sheriff must serve a proper eviction order.
South Dakota Lease Agreement FAQ
Here are some frequently asked questions about South Dakota lease agreements:
What if the lease doesn’t give me the right to renew? Can my landlord still raise my rent?
No. In South Dakota, when a residential lease agreement ends, the landlord has the right to raise the rent for any period of renewal. However, the landlord does not have the right to raise the rent or change other terms of renewal without having said so in the agreement.
Am I responsible for paying rent on time?
Yes. If the lease requires you to pay your rent on a specific date every month either in money order, personal check or bank transfer (for example), you are responsible for getting it done on that date. Your landlord cannot tell you will be fine just once and if you are late again , your lease will be terminated for good. Note that your landlord does not have the right to charge you a late fee, unless that is specifically stated in your lease agreement.
My landlord has failed to return my security deposit. Can I recover it?
In South Dakota, a landlord shall give a tenant a written list stating all amounts withheld from a security deposit within three weeks of the tenant vacating the premises. "Amount withheld" means all rent due, rent from any month during which the tenant moved out early and an allowance for the actual amount of damages, beyond normal wear and tear, for which the tenant is responsible.