South Dakota Tenant Screening Laws: What Landlords Can and Cannot Do
South Dakota caps the deposit at one month and returns it in two weeks, but does not cap screening fees. The FCRA and federal fair housing law govern who you approve. Here is how to screen legally in 2026.
Tenant screening in South Dakota is governed lightly by state statute and heavily by federal law. SDCL 43-32-6.1 sets the deposit limit and a fast return deadline, but it says little about how you evaluate an applicant – which makes the federal Fair Credit Reporting Act and fair housing law the real rulebook.
This guide covers what you may screen, what you can charge, and the deposit rules under SDCL 43-32-6.1. If you are new to the mechanics, our overview of how to screen tenants step by step pairs well with the South Dakota-specific points below.
Video: a plain-language walkthrough of South Dakota tenant screening, application fees, deposits, and adverse action.
Key Takeaways: South Dakota Tenant Screening Laws
- No application-fee cap. South Dakota does not limit screening fees, but they must be reasonable and tied to the actual cost of the report.
- Deposits are capped at one month’s rent, with a larger deposit allowed only by mutual agreement where special conditions pose a danger to the premises (SDCL 43-32-6.1).
- Return is fast: two weeks. The landlord must return the deposit within two weeks after the tenant moves out.
- Itemize on request. If the tenant asks for a written itemized accounting, the landlord must provide it within forty-five days.
What South Dakota Law Lets You Screen
South Dakota gives landlords broad authority to evaluate an applicant. With written permission you may obtain a consumer report covering credit, rental and payment history, employment and income, and public records such as criminal convictions and civil judgments, and you may decline applicants who fail your written standards.
Because South Dakota regulates so little of the screening process, consistency is the safeguard: write your criteria down and apply them identically to every applicant. Our guide to the minimum credit score for renting explains how to set a threshold that screens for risk without screening out a protected class.
Application Fees in South Dakota: No Cap
South Dakota sets no maximum on a tenant application or screening fee. The practical limits are reasonableness and consistency: tie the fee to the actual cost of the report and charge the same amount to every applicant.
Uneven fees, or fees collected without genuine screening, draw fair housing scrutiny even where no cap exists. Treat the fee as part of a documented, even-handed process.
The deposit clock runs fast
South Dakota gives landlords only two weeks to return the deposit. Missing that short window is the most common South Dakota deposit error, and the tenant can demand an itemized accounting on top of it.
Security Deposits Under SDCL 43-32-6.1
South Dakota caps the security deposit at one month’s rent. A larger deposit is allowed only when the landlord and tenant agree to it and special conditions pose a danger to the maintenance of the premises – it is a narrow exception, not a general option.
After the tenant moves out, the landlord must return the deposit within two weeks, and if the tenant requests a written, itemized accounting of any deductions, the landlord must provide it within forty-five days. Our deeper look at South Dakota security deposit laws covers permitted deductions and the timelines.
South Dakota Fair Housing and Protected Classes
South Dakota fair housing law tracks the federal Fair Housing Act, prohibiting discrimination on the basis of race, color, religion, sex, national origin, familial status, and disability, with HUD interpreting sex to include sexual orientation and gender identity in housing. South Dakota does not add source of income as a statewide protected class.
That means a landlord is not required by state law to accept a housing voucher, though uniform treatment of every applicant remains the rule. For the federal baseline, see our Fair Housing Act guide for landlords.
Criminal History, Credit, and Eviction Records
A criminal record can be a lawful basis to decline in South Dakota, but a blanket no-record policy is the most common fair housing trap. HUD’s 2016 guidance treats criminal-records screening under a disparate-impact lens, so a flat ban can violate the federal Fair Housing Act even without intent. Use an individualized assessment tied to the offense, how recent it is, and safety.
Credit history and prior evictions are cleaner when your standard is objective and consistently applied. You can read how eviction filings arise on our South Dakota eviction notice laws page. Decide your criteria in advance and apply them the same way every time.
The FCRA: Consent and Adverse Action
When you pull a screening report through a consumer reporting agency, the federal Fair Credit Reporting Act governs the transaction – and in South Dakota, where state law is largely silent on screening, this is the rule that matters most. You need a permissible purpose and written authorization before ordering the report, and you must send an adverse action notice if the report drives a denial, a higher deposit, or a co-signer demand.
The notice must name the reporting agency, state that it did not make the decision, and explain the applicant’s right to a free copy and to dispute it. Our FCRA compliance guide and the companion walkthrough of the adverse action notice spell out the requirements.
Fair Housing Compliance for South Dakota Landlords
South Dakota fair housing law and the federal Act demand the same discipline: uniform criteria, uniform application, and documentation showing you treated every applicant by the same yardstick. In a state that regulates the process this lightly, the paper trail is your protection.
Publish your criteria before you advertise, screen every applicant against the identical standard, and keep the file. Consistency is far more persuasive than an after-the-fact explanation.
A Compliant South Dakota Screening Process
Turn the rules into one repeatable sequence. First, publish objective criteria. Second, collect a reasonable, uniform screening fee. Third, get written consent and order the report. Fourth, evaluate every applicant against the identical standard. Fifth, if you decline based on a report, send the adverse action notice promptly – and keep the deposit within the one-month cap and the two-week return.
Income verification is the step landlords most often shortcut; our guide to verifying tenant income shows how to confirm ability to pay without singling anyone out. Run the same steps for every applicant and your file will tell a clean, consistent story.
When a Larger Deposit Is Allowed in South Dakota
The one-month cap in SDCL 43-32-6.1 has a single, narrow exception. A landlord may collect more than one month only where two things are both true: the landlord and tenant mutually agree to the larger amount, and special conditions pose a danger to the maintenance of the premises. Neither a weak credit score nor a thin rental history is, by itself, a special condition that justifies exceeding the cap.
If you do rely on the exception, document both the agreement and the specific condition that supports it. Without that record, a deposit above one month looks like a simple cap violation, and the burden of justifying it falls on you.
Common Mistakes That Create Liability
In a permissive state the recurring errors cluster around the deposit. Exceeding one month without a documented special-conditions agreement, or missing the tight two-week return, create exposure, and ignoring a tenant’s request for an itemized accounting compounds it. Charging uneven application fees and denying an applicant on a report without the FCRA notice round out the list.
One standard, every applicant. South Dakota hands you the freedom to design your own process but pins down the deposit and a fast return. A single written rubric, used the same way each time, is your strongest defense.
Documentation and Recordkeeping in South Dakota
Because South Dakota regulates the screening process so lightly, your records are what prove it was lawful and even-handed. Keep the signed authorization for each consumer report, a dated copy of the written criteria you applied, the screening results, and every adverse action notice. A complete file showing identical treatment across applicants is the strongest answer to a fair housing complaint.
On the deposit, document the base deposit against the one-month cap, any special-conditions agreement that justifies more, the date the tenant moved out so you meet the two-week return, the itemized accounting if requested, and dated condition records.
Set one retention policy and apply it to every file, approved or denied. A consistent multi-year record of authorizations, criteria, screening results, adverse action notices, and deposit accountings gives you the evidence to answer a discrimination inquiry or a deposit dispute. Keeping the same records for everyone is itself proof of the even-handed treatment South Dakota and federal law require.
Do
- ✓Publish your written screening criteria before you advertise, and apply them to every applicant.
- ✓Get written authorization before pulling any report, and keep the signed consent on file.
- ✓Send an FCRA adverse action notice on every denial that rests on a consumer report.
- ✓Assess any criminal record case by case, weighing the offense, how recent it is, and safety.
- ✓Handle the security deposit and its return exactly as the state statute requires, and document it.
Avoid
- ✕Charge uneven application fees, or collect a fee with no genuine screening behind it.
- ✕Treat a permissive state as a lawless one – the FCRA and federal fair housing law always apply.
- ✕Apply a blanket ban on any criminal record, which risks a disparate-impact violation.
- ✕Improvise your standards applicant by applicant instead of following one written rubric.
- ✕Skip the deposit paperwork the statute requires, from itemization to any required notices.
South Dakota Tenant Screening Laws: FAQ
Can a South Dakota landlord run a background check on an applicant?
Yes. With written authorization you may obtain a consumer report covering credit, rental history, income, and criminal convictions. The federal Fair Credit Reporting Act requires a permissible purpose and consent before any screening report is pulled.
Is there a limit on application fees in South Dakota?
No. South Dakota does not cap tenant application or screening fees. Keep the fee reasonable, tie it to the actual cost of screening, and charge it consistently to every applicant.
What is the maximum security deposit in South Dakota?
One month’s rent under SDCL 43-32-6.1, with a larger deposit allowed only by mutual agreement where special conditions pose a danger to the maintenance of the premises.
When must a South Dakota landlord return the deposit?
Within two weeks after the tenant moves out. If the tenant requests a written, itemized accounting of deductions, the landlord must provide it within forty-five days.
Is source of income a protected class in South Dakota?
No. South Dakota follows the federal protected classes and does not list source of income, so state law does not require a landlord to accept a housing voucher. Treat every applicant by the same standard regardless.
Can a South Dakota landlord deny an applicant for a criminal record?
A conviction can be a lawful reason to decline, but blanket bans are risky. HUD’s 2016 guidance warns that a flat no-record policy can create a disparate-impact violation, so use an individualized assessment tied to the offense, how recent it is, and safety.
Does a South Dakota landlord have to send an adverse action notice?
Yes. If a denial, a higher deposit, or a co-signer requirement rests in any part on a consumer report, the FCRA requires an adverse action notice naming the reporting agency and explaining the right to a free report and to dispute it.
Can a South Dakota landlord charge more than one month’s deposit?
Only by mutual agreement and where special conditions pose a danger to maintaining the premises. A weak credit score or thin rental history alone does not justify exceeding the one-month cap.
How long should a South Dakota landlord keep tenant screening records?
Keep applications, signed authorizations, screening results, adverse action notices, and deposit accountings for every applicant – approved or denied – for several years. In South Dakota, a consistent retention policy is the evidence that you treated every applicant by the same standard if a fair housing or deposit dispute later arises.
When must a South Dakota landlord send the adverse action notice?
Send it promptly whenever a consumer report contributes to an adverse decision – a denial, a higher deposit, or a co-signer requirement. The FCRA notice must name the reporting agency, state that it did not make the decision, and tell the South Dakota applicant how to get a free copy of the report and dispute any error.
Related South Dakota and Screening Guides
- Tenant screening laws by state – compare South Dakota to the rest of the country.
- South Dakota security deposit laws – deductions, itemization, and the return deadline.
- South Dakota eviction notice laws – notice periods and the eviction timeline.
- South Dakota rent increase laws – notice rules for raising the rent.
- South Dakota late fee laws – what you can charge for late rent.
- How a tenant background check works – what a report includes.
- South Dakota habitability laws – your maintenance obligations as a landlord.
Screen South Dakota Applicants the Compliant Way
Order FCRA-ready credit, criminal, and eviction reports and keep your South Dakota process consistent from application to decision.
Published by Tenant Screening Background Check · Editorial Team
Established 2004. Our editorial team has spent two decades helping landlords and property managers run lawful, FCRA-compliant tenant screening across all 50 states. We translate state landlord-tenant codes and federal screening rules into processes you can actually follow.
Legal Disclaimer
This article is for general informational purposes only and is not legal advice. South Dakota and federal laws change, and how they apply depends on your specific facts. Before acting on any screening, fee, deposit, or fair housing question, consult a licensed attorney in South Dakota. Reading this page does not create an attorney-client relationship.
