South Dakota lien waiver: a whole chapter that makes the waiver work
South Dakota did not write an anti waiver statute. It wrote the opposite. Chapter 44-9A of the Codified Laws is titled construction lien waiver agreements, it runs five sections, and every one of them is about making a waiver stick. Its most important consequence is one most suppliers never think about: in South Dakota, endorsing a joint check can waive your lien, without you ever signing a document headed waiver.
SDCL 44-9A-1 says liens arising under Title 5 or Title 44 or the common law may be expressly waived as provided in chapter 44-9A, in addition to all other means presently existing under law by which such liens may be waived. So the joint check route is an addition, not a replacement. An ordinary written waiver still works, and nothing in chapter 44-9 voids one signed before payment.
Read the law: South Dakota Codified Laws section 44-9A-4sdlegislature.gov
SDCL 44-9A-4, what the endorsement doesFill it in online Type your details in and download it already filled in.The endorsement of a joint check as provided herein and the execution of a separate written agreement of waiver by a person or corporation furnishing materials, supplies, equipment, and services to an owner, contractor, or a subcontractor shall constitute an express waiver of all rights and claims under Title 5 and Title 44 of the South Dakota Codified Laws and the common law of this state against the owner or contractor and his surety to the extent of, and as of the date of, the joint check endorsed.
An express waiver of all rights and claims, against the owner, the contractor and the surety. That last word matters, because it means the same endorsement that costs you the lien on a private job costs you the bond claim on a bonded one. The limit is on the back of the check: to the extent of, and as of the date of, the check you endorsed.
Download a blank South Dakota lien waiver
South Dakota prescribes no statutory wording for an ordinary waiver, so this is the general conditional waiver on progress payment, the form that fits most draws. Fill in the amount and the through date rather than leaving them blank, because no South Dakota section limits a waiver that does not limit itself. Print it and fill it in by hand, or use the builder below and get it back already filled in.
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How a check becomes a waiver, in three steps
44-9A-2 sets the mechanism. A supplier's lien may be waived by the endorsement of a joint check whose payees include both the contractor or subcontractor and the supplier, together with the execution of a separate agreement of waiver between the maker of the check and the supplier. Two things, then: the joint check and the separate written agreement. One without the other does not do the job under this chapter.
44-9A-3 says what has to be on the check itself. A joint check used for this purpose must carry a provision on the reverse side referring to that separate written agreement of waiver, and the provision must be conspicuous. It must mention that the payees, by their endorsements and in consideration of the payment represented by the joint check, jointly and severally waive all claims to which they might be entitled under Title 5 and Title 44 and the common law of South Dakota, for all materials, supplies, equipment and services supplied under a clearly identified contract, to the extent of and as of the date of the joint check.
Then 44-9A-4 does the work. Endorse that check, with the separate agreement executed, and you have expressly waived all rights and claims against the owner, the contractor and the surety, to the extent of and as of the date of the check. The whole exchange takes place at the moment you sign the back of a payment instrument, which is why the word conspicuous in 44-9A-3 is the only real protection the supplier has here.
The section that punishes being helpful
44-9A-5 is short and it is the one to read twice. It shall be of no consequence under this chapter if the payment or any part of it in the joint check is released to the contractor or subcontractor by another payee. Release of such funds is at the peril of the person or corporation furnishing the materials, supplies, equipment and services.
Read the situation it is describing. A joint check comes in with your name and the general's on it. You endorse it and hand it across, or you sign and let the general deposit it and promise to cut you your share. Under 44-9A-4 your waiver is already complete. Under 44-9A-5 the fact that you never actually received the money is of no consequence, and the peril is yours.
That is as clean a statement of the risk as any state has written down. In most states the argument after a bad joint check is about whether the endorsement amounted to a waiver at all. South Dakota answered the question in advance, in the supplier's disfavor, in 1971.
Chapter 44-9 has no anti waiver rule either
The mechanics and materialmen chapter, 44-9, runs more than fifty sections and none of them is about waiving. No section declares an advance waiver void as against public policy, none prescribes wording, and none requires that a waiver be exchanged for payment. Between that silence and 44-9A-1's phrase about all other means presently existing under law by which such liens may be waived, the position is settled: an ordinary written South Dakota lien waiver is a contract and is enforced as one.
What chapter 44-9 gives you instead is leverage over the owner. Under 44-9-10 anyone furnishing lienable items under a contract with a contractor may serve on the owner, at any time, a sworn account and notice of claim showing the items, the amounts and the dates they were furnished, and thereupon the owner shall withhold from his contractor so much of the contract price as may be necessary to meet the claims of the people who served those accounts and notices. That is a self executing stop payment, available before anything is filed.
Then the lien itself ceases at the end of one hundred twenty days after the last work, skill, services, material or machinery, unless a statement of claim is filed with the register of deeds of the county where the improved premises are, under 44-9-15. Enforcement runs six years from the date of the last item as set out in the filed lien statement, and nobody is bound by the judgment unless made a party inside that six years.
What to do about it on a South Dakota job
Turn any joint check over before you endorse it. If there is a conspicuous provision on the back referring to a separate waiver agreement, that endorsement is a waiver of everything up to the date of the check, against the owner, the contractor and the surety. Do not sign it until you have read the separate agreement it refers to, and do not endorse and hand it on unless you are content to rely on the other payee's word, because 44-9A-5 says that risk is yours.
Sign conditional, never unconditional, on the ordinary waivers. Where no statute voids a bad waiver the form is the entire protection, and a conditional waiver that takes effect when the payment clears is a different document from one that takes effect on signature. Put the amount and the through date on it, because nothing in chapter 44-9 will limit a waiver that does not limit itself.
Then work the dates. Serve the sworn account and notice under 44-9-10 as soon as payment slips, because it forces the owner to hold money back. File the lien statement within one hundred twenty days of the last item under 44-9-15. And treat any written demand to commence suit as a hard thirty day deadline: under 44-9-26 the lien is forfeited if you do not sue within thirty days of service, and the register of deeds cancels it of record once the owner files his affidavit on the fortieth day.
Which of the four to sign on a South Dakota job
South Dakota enforces waivers and has a statutory route that can catch you without a signature, so the wording of anything you do sign is the whole of your protection. A conditional waiver ties the release to the payment clearing. An unconditional one releases on signature, paid or not.
Questions people ask
Is a South Dakota lien waiver signed before payment valid?
Yes. Chapter 44-9 contains no section voiding an advance waiver and no prescribed wording, and chapter 44-9A exists to make waivers effective rather than to restrict them. 44-9A-1 expressly preserves all other means presently existing under law by which such liens may be waived, so an ordinary written waiver is enforced as a contract.
Can endorsing a joint check waive a South Dakota lien?
Yes, if the chapter 44-9A machinery is in place. Under 44-9A-2 and 44-9A-4 the endorsement of a joint check payable to both the contractor and the supplier, together with a separate written agreement of waiver between the maker and the supplier, is an express waiver of all rights and claims against the owner, contractor and surety to the extent of and as of the date of the check. 44-9A-3 requires a conspicuous provision on the reverse of the check referring to that agreement.
What if the other payee takes the joint check money and I never get paid?
SDCL 44-9A-5 answers that directly and not in your favor. It is of no consequence under the chapter if the payment or any part of it is released to the contractor or subcontractor by another payee, and release of those funds is at the peril of the supplier. The waiver stands whether or not the money reached you.
How long do I have to file a South Dakota mechanics lien?
One hundred twenty days. Under 44-9-15 the lien ceases at the end of one hundred twenty days after the last work, skill, services, material or machinery unless a statement of the claim is filed with the register of deeds of the county where the improved premises are situated. The action to enforce runs six years from the date of the last item in the filed lien statement, but a written demand under 44-9-26 cuts that to thirty days.
Working in another state? The general lien waiver forms page covers all four waiver types, and conditional vs unconditional lien waiver explains which of the two to sign and when.
This page quotes South Dakota Codified Laws section 44-9A-4 and explains what it says. It is not legal advice, and a statute can be amended. Read the linked section before you rely on it.