A South Dakota sublease agreement is between a tenant currently renting a property and a new individual (the “subtenant”) who wants to rent part or all of that property.
Generally, a sublease agreement in South Dakota allows an existing tenant to rent property to a third party. This agreement helps the original tenant (or “sublessor”) pay some or all of the rent due to the landlord by having another person live on the property as a renter.
Unless subleasing is restricted explicitly in the original lease, South Dakota tenants are free to sublet rental properties at will.
Laws & Requirements
Sublease and Assignment Provision Laws: South Dakota Codified Laws 43-32-17
Landlord-Tenant Laws: Chapter 43-32 of the Codified Laws of South Dakota (Lease of Real Property)
Security Deposit Obligations: In accordance with state law, sublessors must return a security deposit within 14 days of the end of the sublease.
Notices: A sublessor must give five days’ written notice to pay rent or leave. They must also provide 30 days’ written notice if they’re not going to renew the original lease or the sublease.
Permission to Sublet
- Laws: The parties should refer to the lease agreement to determine if subletting is allowed.
- Explicit Written Consent: The tenant must seek the landlord’s written consent before subletting.
- Landlord’s Right to Reject: A landlord can reject a subtenant if the reason is legal and not discriminatory. For example, they may reject a subtenant whose rental history they can’t verify. Rejecting a sublease for discriminatory reasons violates state law per SD Codified Laws § 20-13-20.
Tax Obligations
Lodgings Tax
- Application: Lodging tax applies to any short-term rental, referring to a property rented for less than 28 days (SD Codified Laws § 34-18-1).
- Local Taxes: Individual cities may levy additional local taxes:
Tax Rates
The following tax rates will apply to short-term housing in South Dakota [1] :
- State Sales Tax: 4.2%.
- State Tourism Tax: 1.5%.
- General Municipal Sales Tax Rate: Up to 2%.
- Municipal Gross Receipts Tax (MGRT): 1% (It will be in addition to the municipal sales tax rate).
- Business Improvement District (BID) and Room Occupancy Fees: Some, but not all, cities impose these fees on transient rentals.
Filing Frequency
- The tourism tax on lodging establishments applies year-round.
- The filing frequency for state sales tax can be monthly, quarterly, or yearly.
- Regardless of the frequency, the tax returns are due on the 20th of each month (SD Codified Laws § 10-52-18). For example, if you file quarterly, the sales tax returns for January through March are due on April 20.
Making Payments
- You can remit payments to the South Dakota Department of Revenue after completing a tax license application.
- If you use a hosting platform like Airbnb, the taxes may be included in the price of the reservation.
Sample
Related Documents
Rental Application
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