As far as mechanics lien law is concerned, South Dakota has a pretty straight forward statute. Earlier today, we published a guide to these laws, highlighting that mechanics liens are always due 120 days from last furnishing labor or materials, and that if a preliminary notice is required (only if a Notice of Commencement is filed), it must be sent within 60 days from first furnishing labor or materials to the project. Pretty simple, pretty straightforward. View a graph of these requirements and other FAQs at Zlien’s South Dakota Lien Law Resources page.
While the state’s mechanics lien laws are pretty simple, there are three important nuances that could affect a party’s rights.
Owner Can Delay Your Ability To File A Mechanics Lien
Those owed money on a project in South Dakota must file their mechanics lien within 120 days from last furnishing labor or materials to a project. However, a property owner can delay this process for at least 10 days by service an “Owners Demand for Lien Account” upon any potential lien claimant.
This “Owners Demand” must be within 15 days from the completion of the construction contract. If it is timely made, the lien claimant may not file a mechanics lien for at least 10 days after the lien account is furnished to the property owner.
While this may seem like a small delay or inconvenience, it can turn out to be much more, especially if the property owner were to make the demand for lien account near the end of a claimant’s deadline to file a mechanics lien. Theoretically, if a request was made at this time, the lien claimant could be forced out of its mechanics lien rights because the 10 day waiting period is not cause to extend a mechanics lien deadline.
A Mechanics Lien’s Effectiveness Can Be Drastically Limited
South Dakota has one of the longest mechanics lien claim periods in the United States. After a mechanics lien is filed in the state, it is effective against the property for a total of six years! This is almost as long as standard judgments in many states.
However, there is an exception. At any time, a property owner can deliver a written demand to the lien claimant requiring the lien claimant to commence suit to enforce the mechanics lien claim. This demand is referred to as a “Notice to Commence Suit to Enforce Mechanics Lien.”
The mechanics lien claimant must start its lawsuit to enforce the lien claim within 30 days of receiving this notice, and if the lawsuit is not commenced, the mechanics lien claim will be rendered null and void.
Where You File A South Dakota Mechanics Lien Depends On Character of Services Furnished
This is a weird one. Most states require all mechanics lien claims be filed with the county recorder or clerk of court. In South Dakota, however, there are at least 2 offices where mechanics lien claims can be filed, and the lien claimant must make certain they file their lien claim in the right office.
Generally speaking, like all other states, mechanics liens in South Dakota must be filed with the county recorder (the Register of Deeds) of the county where the construction project is located.
However, the mechanics lien claim must be filed with the Secretary of State (and not the Register of Deeds) if the claim is for materials or services furnished for construction on power, electric, light, telephone or telegraph lines, or on railways.