<html xmlns="http://www.w3.org/1999/xhtml" lang="en-US"><head><meta charset="UTF-8"><meta http-equiv='content-language' content='en-us'/><title>SDLRC - Codified Law 57A-9-207 - Rights and duties of secured party having possession or control of collateral.</title><meta name="Generator" content="PowerTools for Open XML"><style>span { white-space: pre-wrap; } p.s054c180512ca44d7acc429a1b17a075dNormal { text-indent: 0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-left: 0; margin-right: 0; margin-bottom: .001pt; } span.s054c180512ca44d7acc429a1b17a075dSENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s054c180512ca44d7acc429a1b17a075dCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s054c180512ca44d7acc429a1b17a075dStatute { text-indent: 0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-left: 0; margin-right: 0; margin-bottom: .001pt; } span.s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } p.s054c180512ca44d7acc429a1b17a075dStatuteNumber1 { margin-left: 0.75in; text-indent: -0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-right: 0; margin-bottom: .001pt; } p.s054c180512ca44d7acc429a1b17a075dStatuteNumber2 { margin-left: 1.25in; text-indent: -0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-right: 0; margin-bottom: .001pt; } span.s054c180512ca44d7acc429a1b17a075d000000 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } p.s054c180512ca44d7acc429a1b17a075dNoIndent { text-indent: 0.00in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-left: 0; margin-right: 0; margin-bottom: .001pt; } span.s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont-000001 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s054c180512ca44d7acc429a1b17a075dSCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } body { text-decoration-skip-ink: none; } </style><meta name="viewport" content="width=device-width, initial-scale=1"><meta name="twitter:card" content="summary"><meta property="og:title" content="SD 57A-9-207 - Rights and duties of secured party having possession or control of collateral."><meta property="og:description" content="SDLRC Codified Law 57A-9-207 - Rights and duties of secured party having possession or control of collateral."><meta property="og:type" content="website"><meta property="og:url" content="https://sdlegislature.gov/Statutes/57A-9-207"><meta property="og:image" content="https://lawmakerdocuments.blob.core.usgovcloudapi.net/photos/logoshape.webp"><meta property="og:site_name" content="South Dakota Legislature"></head><body><div><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dNormal"><a href="https://sdlegislature.gov/Statutes?Statute=57A-9-207" rel="noopener"><span class="s054c180512ca44d7acc429a1b17a075dSENU">57A-9-207</span></a><span xml:space="preserve" class="s054c180512ca44d7acc429a1b17a075dSENU">. </span><span class="s054c180512ca44d7acc429a1b17a075dCL">Rights and duties of secured party having possession or control of collateral.</span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dStatute"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">(a) Except as otherwise provided in subsection (d), a secured party shall use reasonable care in the custody and preservation of collateral in the secured party's possession. In the case of chattel paper or an instrument, reasonable care includes taking necessary steps to preserve rights against prior parties unless otherwise agreed.</span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dStatute"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">(b) Except as otherwise provided in subsection (d), if a secured party has possession of collateral:</span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dStatuteNumber1"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">(1)    Reasonable expenses, including the cost of insurance and payment of taxes or other charges, incurred in the custody, preservation, use, or operation of the collateral are chargeable to the debtor and are secured by the collateral;</span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dStatuteNumber1"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">(2)    The risk of accidental loss or damage is on the debtor to the extent of a deficiency in any effective insurance coverage;</span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dStatuteNumber1"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">(3)    The secured party shall keep the collateral identifiable, but fungible collateral may be commingled; and</span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dStatuteNumber1"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">(4)    The secured party may use or operate the collateral:</span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dStatuteNumber2"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">(A)    For the purpose of preserving the collateral or its value;</span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dStatuteNumber2"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">(B)    As permitted by an order of a court having competent jurisdiction; or</span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dStatuteNumber2"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">(C)    Except in the case of consumer goods, in the manner and to the extent agreed by the debtor.</span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dStatute"><span xml:space="preserve" class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">(c) Except as otherwise provided in subsection (d), a secured party having possession of collateral or control of collateral under § </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-7-106" rel="noopener"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">57A-7-106</span></a><span xml:space="preserve" class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">, </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-9-104" rel="noopener"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">57A-9-104</span></a><span xml:space="preserve" class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">, </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-9-105" rel="noopener"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">57A-9-105</span></a><span xml:space="preserve" class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">, </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-9-105.1" rel="noopener"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">57A-9-105.1</span></a><span xml:space="preserve" class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">, </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-9-106" rel="noopener"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">57A-9-106</span></a><span xml:space="preserve" class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">, </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-9-107" rel="noopener"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">57A-9-107</span></a><span xml:space="preserve" class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">, or </span><a href="https://sdlegislature.gov/Statutes?Statute=57A-9-107.1" rel="noopener"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">57A-9-107.1</span></a><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">:</span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dStatuteNumber1"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">(1)    May hold as additional security any proceeds, except money or funds, received from the collateral;</span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dStatuteNumber1"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">(2)    Shall apply money or funds received from the collateral to reduce the secured obligation, unless remitted to the debtor; and</span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dStatuteNumber1"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">(3)    May create a security interest in the collateral.</span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dStatute"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">(d) If the secured party is a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor:</span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dStatuteNumber1"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">(1)    Subsection (a) does not apply unless the secured party is entitled under an agreement:</span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dStatuteNumber2"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">(A)    To charge back uncollected collateral; or</span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dStatuteNumber2"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">(B)    Otherwise to full or limited recourse against the debtor or a secondary obligor based on the nonpayment or other default of an account debtor or other obligor on the collateral; and</span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dStatuteNumber1"><span class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont">(2)    Subsections (b) and (c) do not apply.</span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dNormal"><span xml:space="preserve" class="s054c180512ca44d7acc429a1b17a075d000000"> </span></p><p dir="ltr" class="s054c180512ca44d7acc429a1b17a075dNoIndent"><span xml:space="preserve" class="s054c180512ca44d7acc429a1b17a075dDefaultParagraphFont-000001">Source: </span><span class="s054c180512ca44d7acc429a1b17a075dSCL">SL 2000, ch 231; SL 2009, ch 254, § 827; SL 2024, ch 198, § 51.</span></p></div></body></html>