South Dakota State Lien Law Summary

Supplier of labor or materials to the project at least to general or first-tier sub. [44-9-1] Those who furnish skill, labor, services, or materials for environmental remediation of a leaky underground storage tank and installation of an upgraded tank and other fixtures have lien rights. [Duffield Const., Inc. v. Baldwin, 679 N.W.2d 477 (2004)]

Furnisher of labor or materials to the project, at least those supplying to the general or a first-tier sub. [5-21-6; Schor at §42.02[C]]

-Improvement and land upon which it is situated. [44-9-1]

-Contract funds held by the owner. [44-9-10]

-Contractor’s payment bond. [5-21-6]

-Funds due contractor. [5-22-1]

-Public body, but only if the public body fails to obtain bond. [5-21-2]

REAL PROPERTY:

All sub-subcontractors and suppliers to subs, where the owner or general has filed a notice of project commencement, and has posted a location notice at the jobsite. [44-9-50, 44-9-51, 44-9-53]

CONTRACT FUNDS:

Note that any claimant supplying someone other than the owner can give a notice to the owner or the owner’s authorized agent at any time, and thereafter the owner is required to hold sufficient funds to cover the debt to the claimant. This is discussed more fully under the Final Notice sections below. [44-9-10]

AGAINST PURCHASERS, MORTGAGEES, OR ENCUMBRANCERS WITHOUTH NOTICE:

As against one of these interested parties, no lien attaches before the actual and visible beginning of the improvement on the ground, unless a person having a contract for the furnishing of labor, skill, material, or machinery files with the register of deeds a brief statement of the nature of their contract. This statement will be notice of the claimant’s lien for the contract or value of all contributions to such improvement thereafter made by the claimant. [44-9-8] NOTE that even though it is filed later, a lien attaches as of the date the contractor furnishes the first item of labor or materials. [American Prairie Const. Co. v. Tri-State Financial, LLC, 529 F.Supp.2d 1061 (D.S.D.2007)]

No one, but strongly recommend obtaining a copy of the bond to be sure to comply with any notice requirements set out there. [Schor at §42.02[A]] In addition, to protect one’s claim against the funds due the contractor, the claimant must file notice within 20 days of a delivery (the last delivery is fine) to protect its claim for the full price of its labor or materials. See discussion below, in ‘final notice’ sections. [5-22-2; Schor at §42.03[C]]

REAL PROPERTY:

-Contractor

-Owner

-Register of Deeds. [44-9-53]

CONTRACT FUNDS:

Note that any claimant supplying someone other than the owner can give a notice to the owner or the owner’s authorized agent at any time, and thereafter the owner is required to hold sufficient funds to cover the debt to the claimant. This is discussed more fully under the Final Notice sections below. [44-9-10]

AGAINST PURCHASERS, MORTGAGEES, OR ENCUMBRANCERS WITHOUTH NOTICE:

To the register of deeds of the county in which the property is located. [44-9-8]

Not applicable.

REAL PROPERTY:

Notice must be “provided” within 60 days of claimant’s last delivery to or work on the project. Recommend ensuring timely receipt. [44-9-53]

CONTRACT FUNDS:

Note that any claimant supplying someone other than the owner can give a notice to the owner or the owner’s authorized agent at any time, and once it has been received the owner is required to hold sufficient funds to cover the debt to the claimant. This is discussed more fully under the Final Notice sections below. [44-9-10]

AGAINST PURCHASERS, MORTGAGEES, OR ENCUMBRANCERS WITHOUTH NOTICE:

No specific date, however presumably at any time after the claimant enters into a contract, and prior to the beginning of work at the project site. Notice is effective upon filing. [44-9-8]

Not applicable.

REAL PROPERTY:

-Notice of furnishing labor or materials
-The name of the claimant
-The name of the person with whom the claimant contracted or by whom the claimant was employed

-A description of the labor, services, or materials furnished and contract price or value thereof. Materials specifically fabricated by one other than the one giving notice and contract price or value thereof shall be separately stated in the notice

-A description of the project, sufficient for identification

-The date when the first and last item of labor or materials was actually furnished or scheduled to be furnished

-The amount claimed to be due, if any

-The post office receipt for mailing such notice shall be attached to the lien and filed in the office of register of deeds. [44-9-53]

CONTRACT FUNDS:

Note that any claimant supplying someone other than the owner can give a notice to the owner or the owner’s authorized agent at any time, and thereafter the owner is required to hold sufficient funds to cover the debt to the claimant. This is discussed more fully under the Final Notice sections below. [44-9-10]

AGAINST PURCHASERS, MORTGAGEES, OR ENCUMBRANCERS WITHOUTH NOTICE:

Brief statement of nature of their contract. [44-9-8]

Not applicable.

REAL PROPERTY:

Certified or registered mail to the contractor and owner; filed with the Register of Deeds. Best to ensure actual receipt; the consequences of refusal of delivery are not clear. [44-9-53]

CONTRACT FUNDS:

Note that any claimant supplying someone other than the owner can give a notice to the owner or the owner’s authorized agent at any time, and thereafter the owner is required to hold sufficient funds to cover the debt to the claimant. This is discussed more fully under the Final Notice sections below. [44-9-10]

Not applicable.

An interim notice is not required.

An interim notice is not required.

REAL PROPERTY:

All claimants. [44-9-15]

CONTRACT FUNDS:

All claimants not supplying owner directly. [44-9-10]

PAYMENT BOND:

All claimants. [5-21-6] It is recommended that claimant obtain a copy of the bond to be sure to comply with any notice requirements set out there.

CONTRACT FUNDS:

All claimants. [5-22-2]

REAL PROPERTY:

-Register of Deeds. [44-9-15]

-Owner. [44-9-17]

CONTRACT FUNDS:

Owner or agent, who then gives copy to contractor. Owner is then required to withhold that amount of funds from contractor, and if contractor doesn’t give owner written notice within 15 days that contractor intends to dispute the claim, then owner may pay claimant directly the money withheld and deduct it from contractor. [44-9-10, 44-9-11]

PAYMENT BOND:

Public body letting contract. [5-21-6]

CONTRACT FUNDS:

-The officer of the public body letting the contract [5-22-2, 5-22-9] AND

-Contractor, if notice is given pursuant to contractor publishing a notice to file claims. (In this case, both the public body and the contractor receive the notice.) [5-22-9]

REAL PROPERTY:

Must be filed with Register of Deeds within 120 days after claimant’s last work or delivery.

-BUT must be mailed to owner before filing with register of deeds, and post office receipt must be attached to lien claim filed. [44-9-15, 44-9-17]

CONTRACT FUNDS:

At any time, but the sooner it is received the more likely it is that the owner still holds adequate funds. [44-9-10] NOTE, HOWEVER, that if the owner serves the appropriate written notice within 15 days after the contract work has been completed, the claimant (if it has not already done so) must provide a verified, itemized account of its claim, including the monetary amount claimed, the identity and the address of the lien claimant. [44-9-14; Schor at §42.03[E]]

PAYMENT BOND:

Received more than 6 months but less than 1 year after completion and final settlement of contract. HOWEVER, it is STRONGLY recommended that the claimant give notice early on, or otherwise obtain a copy of the bond, because the bond may have a notice requirement separate from the notice required by the statute, and that notice will be required before one can collect. For example, the bond itself may require giving notice to the bond company within 90 days of last delivery, even though the statute does not require it, and this notice requirement will be enforced. [5-21-6; County of Pennington for Use and Benefit of Northwest Pipe Fittings, Inc. v. St. Paul Fire & Marine Ins. Co., 508 N.W.2d 376 (1993)]

CONTRACT FUNDS:

Filed within 20 days after any item delivered or labor performed by the claimant. (Twenty days after the last delivery is fine.) If given later, will be limited to amount due to general contractor at time of filing. [5-22-2] Also, if the claimant misses the 20-day deadline, they can also protect their claim by obtaining from the contractor a settlement and statement of the claimant’s account, signed and verified by the contractor. This kind of claim apparently is not limited to the amount owed to the general contractor at the time the notice is given. [Schor at §42.03[C]] Also, if contractor publishes notice to file claims after completion of project, sub or supplier to a sub must give file its claim with the contractor within 120 days of publishing that notice. [5-22-9, 5-22-11]

REAL PROPERTY:

-Owner: Registered or certified mail. It is best to ensure actual notice, or make good-faith effort to do so. Consequences of refusal of delivery are not clear.

-Register of deeds: Filed, with post office receipt for mailing to owner attached. [44-9-17, 44-9-15]

CONTRACT FUNDS:

No specific provision, but personal service or certified or registered mail recommended. Notice is effective upon receipt. [44-9-10]

PAYMENT BOND:

“Furnished” – certified or registered mail or personal service recommended. It must be received to be effective, but since it’s given to a public body, it shouldn’t be an issue. [5-21-6]

CONTRACT FUNDS:

Filed.

REAL PROPERTY:

-Notice of intention to claim and hold a lien, and amount thereof

-That amount is due for materials furnished, labor performed, etc.

-Identify improvement to which materials, etc. were furnished

-Name and address of claimant and of person for whom materials or labor were furnished.

-Dates of first and last deliveries

-Description of property, identified with reasonable certainty

-Name and address of owner

-ITEMIZED statement of account. A fair amount of detail is required. (Recommend including dates, number of hours expended, rate per hour, a description of the work performed and an itemized listing of materials. For materials only, include the destination of the materials, quantity of each item, and description of each item and its price. There may be an exception where a subcontractor contracts to do a project for a set price, with no separate agreement for either material or labor, where such detail will not be required, but it is strongly recommended to give extensive detail in every case. Giving a description and stating that the price is “not to exceed” a certain amount is unacceptable. [W.J. Bachman Mechanical Sheetmetal Co., Inc. v. Wal-Mart Real Estate Business Trust, 764 N.W.2d 772 (S.D.,2009); Dakota Craft, Inc. v. Severson, 769 N.W.2d 434, 2009 SD 56 (S.D.,2009)])

-Verified by the claimant or the claimant’s agent. According to case law, where the verified statement states that the attorney has read the statement, knows the contents, has knowledge of the facts stated therein, and that the same is in all respects true, a statement signed by the claimant’s attorney will be acceptable. [44-9-16; Schor at §42.03[F]; Farmers Co-op. Co. of Brookings v. Brown, 214 N.W.2d 89 (S.D. 1975)]

REMEMBER to attach post office receipt showing that notice was mailed to the owner.

NOTE THAT INTEREST is to be computed on the amount secured as of the date of filing of the lien statement. [Schor at §42.03[F]]

For claim on more than one building, claimant may file one claim for everything, or apportion it among the different lots. This is not the case for condos, however.

CONTRACT FUNDS:

-Notice of claim

-Account of claim showing items, amounts and dates materials were furnished

-Sworn. Note that neither the statute nor case law indicates whether anyone other than the claimant may sign the statement. [44-9-10]

-NOTE that where claim is against a condominium, claimant can either file one claim for the entire project, or can apportion the claim among the different units, and file multiple claims. [44-9-20]

PAYMENT BOND:

Affidavit that:

-Materials for prosecution of work were supplied by claimant; and

-Claimant has not been paid.

Public body must then send certified copy of bond to claimant.

-NOTE that neither the statute nor the case law suggests that anyone other than the claimant may sign the affidavit, thus the claimant should sign it. [5-21-6]

CONTRACT FUNDS:

-Verified statement of the amount due, after allowing credits. The affidavit should be signed by the claimant. (Note that if the claimant gives its final notice late, the lien claim will ultimately be limited to the amount owed to the general contractor at the time the notice is filed. HOWEVER, if the claimant misses the deadline, it can protect itself by obtaining from the contractor a settlement and statement of the claimant’s account, signed and verified by the contractor. [5-22-2; Schor at §42.03[C]])

REAL PROPERTY:

Within 6 years after last delivery, or, if owner, agent or contractor serves demand to commence suit, must bring suit within 30 days after service of demand. The register of deeds will cancel the lien on the record if the owner, the owner’s agent, or the contractor files all of the following at least forty days after service of the written demand: (1) An affidavit stating that the person holding the lien has not started a suit to enforce the lien within 30 days after service of the demand; (2) A copy of the written demand that was served on the lien claimant; and (3) Proof of service on the lien claimant. The register of deeds will also cancel the lien if no action or suit is commenced to enforce the lien within the 6-year period, and the owner, the owner’s agent, or the contractor files an affidavit stating that the lien holder has not commenced suit to enforce the lien within the six-year period and requesting that the lien be cancelled. The register of deeds will then cancel the lien within 30 days of filing of the affidavit. [44-9-24, 44-9-26] ALSO, if a claimant publishes a notice, after court order, requiring all claimants with a lien to appear in the action, claimant must join the action within the time set out (at least 60 days after the first publication) or be barred from ever bringing claim. [44-9-29] Also, if owner served written request on claimant within 15 days of completing contract, as discussed above, the claimant cannot sue until 10 days after giving this statement to owner. [44-9-14; Schor at §42.03[E]]

CONTRACT FUNDS:

No specific provision.

PAYMENT BOND:

Less than one year, but more than 6 months after completion of project, if public body hasn’t brought action. If it has, or if other claimant has brought suit, then claimant must join in suit as an intervener within one year of final acceptance. [5-21-5, 5-21-6]

CONTRACT FUNDS:

Within 30 days after acceptance of work, or, if contractor publishes notice to file claim, then within 120 days of publication of that notice. NOTE, however, that if the claimant failed to file its claim within 20 days after its last delivery, then no suit can be brought until funds become due to the contractor. [5-22-7, 5-22-9; Schor at §42.03[C]]

PUBLIC CORPORATION:

Within 90 days after acceptance of claimant’s work. (This is only allowed where public corporation fails to obtain bond.) [5-21-2]