A storm over the Badlands of South Dakota

RESERVE STUDIES IN SOUTH DAKOTA

South Dakota reserve planning

SmartProperty® helps South Dakota condominiums and HOAs plan and fund their reserves. South Dakota has no reserve statute at all, so what a board does about reserves is judged against its fiduciary duty and what lenders will accept.

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Jan 4, 2027Fannie Mae’s 15% reserve minimum takes effect for condo loans

Mostly nonprofitsMost South Dakota HOAs are nonprofit corporations that set budgets and assessments

No mandateSouth Dakota has no statute requiring a reserve study or a minimum balance

WHAT SOUTH DAKOTA REQUIRES

No statute to follow.
A standard of care to meet.

South Dakota gives no specific statutory guidance on reserve studies or funding. The decision rests with the board, and so does the responsibility for it.

NO STATE RESERVE STATUTE · NONPROFIT LAW

Budgets come from the governing documents

There is no specific statutory guidance or requirement on reserve studies or funding in South Dakota.
Associations typically have the power to set budgets and collect assessments under their governing documents or state nonprofit corporation law.
No state law dictates how reserves must be handled.

FIDUCIARY DUTY · BOARD LIABILITY

Good faith, loyalty and ordinary prudence

Board members must act in good faith, with loyalty, and with the care an ordinarily prudent person would exercise.
That includes making informed decisions and managing the association’s assets prudently.
If a major failure forces a special assessment, homeowners can sue for negligence and breach of fiduciary duty.

Read the full South Dakota reserve law guide

WHY IT MATTERS IN SOUTH DAKOTA

When the law says nothing,
the board’s record says everything.

The board has to prove its choice was prudent

With no state checklist, a decision not to study or fund reserves has to be defended as prudent. A professional study is the board’s proof of informed decision-making.

Roads and shared facilities are on the list

Our guide points to roofs, roads and shared facilities as the components whose failure can trigger a large special assessment. A study puts each one on a replacement schedule.

Lender rules are the only minimum

Fannie Mae’s reserve minimum rises from 10% to 15% of assessment income for loan applications dated on or after January 4, 2027. Associations below it need a current study and a budget that funds its highest recommended contribution.

HOW SMARTPROPERTY HELPS

Compliance is the floor.
Funding stability is the goal.

Full reserve studies and updates

A site-inspected study to start, then updates as costs and conditions change, so the board always has a current plan.

A plan that stays current

The Living Reserve Study® updates as projects are completed and costs change, so your plan is ready for the next update or budget.

Funding options the board can compare

Model higher contributions, special assessments, loans or lines of credit side by side before you take a recommendation to owners.

Numbers you can explain

Atlas shows the cost data and useful-life assumptions behind every figure, so boards can answer owner questions with confidence.

TALK WITH SMARTPROPERTY ABOUT SOUTH DAKOTA

Get your South Dakota reserve plan
on solid ground.

See how the Living Reserve Study® works for your community, or tell us about your association and we’ll put together a proposal.