South Dakota Mechanics Lien Filing “How To”

In South Dakota, liens filed on private property or funds relating to a public project are known Mechanics’ Liens. When a South Dakota mechanics lien is filed with regard to work performed on privately owned property, it attaches to and encumbers the fee simple ownership of the property. When a South Dakota mechanics lien is filed with regard to work performed on a public or government owned property, it attaches to the fund of money which the public agency has allocated for a project. The primary reason for this is you cannot force the sale of publicly owned property. South Dakota construction liens can be filed for any alteration, repair, erection, or removal of any building, bridge or other structure, etc. Liens may also be filed upon any mine or mining claim, oil or gas well or spring construction project. As for who can file a South Dakoa construction lien, contractors, subcontractors, and suppliers who provide work, materials, or services on construction projects in South Dakota have mechanics’ lien rights. In many states, pre-lien or preliminary notices are required to be filed prior to the filing of a mechanics lien claim. South Dakota does not have such a requirement. However, subcontractors and lower tier suppliers may file a “notice of claim” indicating the items and amounts and dates of its work and/or materials that are due and owing. The contractor has 15 days to dispute the claim, after which, it is presumed that there is no dispute and the owner may pay the amount of the claim to the lien claimant and deduct such monies from the money owed to the contractor. South Dakota does have strict limitations on when a mechanics lien claim should be filed. A South Dakota construction lien may be filed within 120 days from the last work or furnishing of the last item or services, material, or machinery to the project. To file a construction lien, South Dakota does not require that the claimant have a written contract. Oral contracts are sufficient. However, if there is a contract, the South Dakota mechanics’ lien secures the contract price for the improvement. If there is no contract, any filed construction lien would only cure the reasonable value of the work furnished or performed. Filing a mechanics lien claim is a great way to protect your accounts receivables because on a private project, the South Dakota mechanics’ lien places an encumbrance on the property that makes it difficult to resell or re-finance the property without first removing the mechanics lien. On a public project, the South Dakota mechanics lien freezes the money owed to you so that the public entity cannot distribute it to the person that is not paying the lien claimant. In addition to South Dakota mechanics lien claims, also provides other methods for collecting money that is owed on a construction project. These other services include the provision of Stop Notices and Bond Claims. A Stop Notice is a notification that has the ability to enhance the effectiveness of a mechanic’s lien. A Stop Notice, or a notice to withhold funds, is sent to the company that is financing or funding the construction funds for a project. Once that company receives the Stop Notice, that company has notice that it should withhold sufficient money to satisfy the stop notice claim. The purpose of the Stop Notice is to provide the lender, financiers or funders of the construction project notice that there is money owed to a contractor, subcontractor or supplier so that an inquiry can be made as to why that money is not being paid. Bond claims can only be filed on a project where the owner, contractor or subcontractor has obtained a payment bond to ensure that every contractor receives payment for the work performed on the Project. The payment bonds issued by sureties for construction projects have specific timing requirements, but most require claimants to submit claims against the bond within sixty to ninety days from the claimants’ last date of work. Bond claims are as or more effective than a lien claim because the payment bond acts as a guarantee that payment will be made for work properly completed. For more information on filing a South Dakota Construction Lien, a South Dakota Mechanics Lien, a South Dakota Stop Notice, a South Dakota Bond Claim, or a South Dakota pre-lien notice, please visit