Security Deposit Alternative in South Dakota
South Dakota caps a security deposit at one month's rent, lifting it only where you and the resident agree a larger amount because special conditions pose a danger to the premises. You then have 21 days from the end of the tenancy and getting a mailing address to return the deposit or send a written statement of the specific reason for keeping any of it, with a full itemized accounting due within 45 days if the resident asks. Miss the 21 days and you forfeit the right to withhold anything at all.
What South Dakota law says about security deposits
Read from the South Dakota statute on 2026-09-11. Deposit rules change, and this is general information rather than legal advice. Confirm the current text with your own counsel before you change a lease.
Can you require it of every South Dakota resident?
South Dakota has no statute written for a monthly fee charged instead of a deposit, and it opens with a definition that decides how carefully the structure has to be drawn: any deposit of money whose function is to secure performance of a residential rental agreement, or any part of it, is deemed a security deposit. That is a test of what a charge does. The cap that follows is one month's rent however denominated, with a single exception where the lessor and resident agree a larger amount because special conditions pose a danger to maintaining the premises. On the way out, you may withhold only for unpaid rent and other funds due under the agreement, and to restore the unit to its condition at the start less ordinary wear.
Rules differ by state and by city, and subsidized housing is its own question. This is general information for property managers, not legal advice. Get a written opinion before you make the fee a condition of tenancy anywhere.
How the program works in South Dakota
The mechanics are the same in every state Beagle operates in. The program is designed to comply with applicable state and local regulations, and the rate is set by the deposit amount rather than by geography, so a South Dakota property and one two states over are quoted the same way.
The resident chooses at signing
Instead of producing the full deposit, the resident pays a smaller non-refundable monthly fee that is billed with rent. Nothing is held, so nothing has to be returned.
The property keeps its protection
Damage beyond normal wear is reimbursed up to the deposit amount the unit would otherwise have required, so what you can recover does not shrink.
Move-out stops being a negotiation
A claim is filed against the program rather than deducted from money you are holding, which takes the itemised-deduction letter and the dispute that follows it off your team's desk.
You earn on every resident who takes it
You set an administrative fee on top of the premium, up to $5 per unit per month, and keep it.
South Dakota security deposit alternative FAQs
South Dakota has no statute answering that, so a mandatory version is a question for your own attorney. One thing to put in front of them: section 43-32-6.1 deems any money whose function is to secure the rental agreement to be a security deposit, so what a charge does outranks what the lease calls it.
See it on your South Dakota units
Run the program against your own unit count, or walk through it with our team. No upfront fees, no onboarding charges, no long-term contracts.