South Dakota Foreclosure Law
South Dakota State Foreclosure Law dictates that lenders may avail of the Judicial and Non-Judicial processes to foreclose deeds of trust or mortgages in default. The typical time of process varies, depending on the circumstances bounding the foreclosure. The deeds of trust and mortgages are the primary security instruments used. Deficiency Judgments and the Right of Redemption vary, depending upon the process employed. Generally, unless special short-term redemption mortgage provisions apply, borrowers may redeem within one year of the date of sale. If the property is 40 acres or less, and the mortgage contains a power of sale clause, then a 180-day period of redemption exists. However, if the property has already been abandoned, the time period is reduced to 60 days.
Judicial Foreclosure is used when no power of sale exists in the deeds of trust or mortgage. Petitioners must file a lawsuit in order to obtain a court order to foreclose. It has been a general practice that when the court declares a foreclosure, the property will be auctioned off and will subsequently be awarded to the highest bidder. On the other hand, Non-Judicial Foreclosure is used when a power of sale clause is expressed in the deeds of trust or in the mortgage. “Power of Sale” is the process wherein the borrower agrees to sell the property in dispute to settle the remaining balance from a loan in case of default. Its most obvious difference from the judicial foreclosure is that it doesn’t need any court order to auction off the property as it is already stated in the security instruments. The lender or their duly designated representative, commonly referred to as the “trustee,” may execute the “power of sale.”
Power of Sale Foreclosure Guideline:
Should the security instruments contain a power of sale clause, the terms specified therein should be strictly followed. Otherwise, the non-judicial foreclosure should be carried out according to the process specified as follows:
- A Foreclosure Notice must be published once a week for 4 consecutive weeks in a county newspaper of the property’s locale.
- At least 21 days before the date of sale, the lender must serve a copy of the Foreclosure Notice to the borrower and to any lien holders.
- The notice must contain the names of the borrower and the lender, the mortgage date, the amount due, a legal description of the property, and the time and place of the foreclosure sale.
- The sale will be conducted by the Sheriff of the property’s county between 9:00 a.m. to 5:00 p.m. The sale will be in the form of a public auction. Any person, including the lender, may bid for the property. The highest bidder will receive a certificate of sale.
The sale may be postponed from time to time, by publishing a notice, at the soonest possible time, in the same newspaper where the original notice of sale was published. The publication of the postponement notice will continue until the time of the rescheduled foreclosure sale.
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