South Dakota is a title theory state in the most part, and as such the primary instrument of security is called the mortgage. This legal document ensures that the property is held in trust to secure the underlying loan. This document contains similar terms as a deed of trust, and there is a power of sale clause included. Because of this a non-judicial foreclosure is required if the lender is compelled to repossess a property due to a delinquent loan.
Non-judicial foreclosures do not involve any court action and the most commonly used process is foreclosure by advertisement, where the trustee who is an attorney representative of the lender, is able to foreclose on the property to satisfy the loan in default. Very strict notice conditions have to be met as this is not a court action and the Sheriff of the county where the property is situated is the person responsible for selling the property to recover the delinquent loan. He sells this to the highest bidder and any entity is able to bid for the property.
The notice of sale has to be published for 4 consecutive weeks in a general circulation newspaper, on the internet and 21 days prior to the sale a notice must be served on the borrower. The entire process in an uncontested non judicial foreclosure takes approximately 90 – 150 days.
Lenders are also able to approach the courts for a judicial foreclosure if there is no power of sale clause in the mortgage. These cost a great deal more money and generally take longer to finalize.
Right of redemption vary from 2 months to one year after the auction takes place, and deficiency judgments are allowed subject to the fair market value of the property, and provided the property was not sold for less than 2/3 of this value.