Duties Owed to Clients and Customers
This is the heaviest of the seven chapters PrepPass derives from the 42-item statutory area, because SDCL 36-21A-132 through 36-21A-146 spell out a separate duty list for every relationship a licensee can occupy. The distinction that runs through all of it is client versus customer.
Duties to a client
SDCL 36-21A-132 gives the seller's or landlord's agent five duties: perform the terms of the written agreement; exercise reasonable skill and care; promote the client's interest with utmost good faith, loyalty and fidelity; account in a timely manner for all money and property received; and comply with applicable law including fair housing. The third duty unpacks into four obligations: seeking acceptable price and terms, presenting all written offers to and from the client in a timely manner regardless of whether the property is already under contract, disclosing all adverse material facts actually known, and advising the client to obtain expert advice on material matters beyond the licensee's expertise. The same section says the licensee is not obligated to seek additional offers while the property is under contract, so presenting is mandatory but soliciting is not. SDCL 36-21A-136 sets out the identical list for a buyer's or tenant's agent. SDCL 36-21A-133 and 36-21A-137 bar disclosure of a client's confidential information without express written authority, unless a statute or rule requires it or silence would be misrepresentation.
Duties to a customer
SDCL 36-21A-134 provides that a seller's or landlord's agent owes no fiduciary duty to a customer but must disclose all adverse material facts known to the licensee to any customer, and owes no duty to conduct an independent inspection of the property. SDCL 36-21A-138 mirrors that for the buyer's agent and adds no duty to investigate the client's financial condition. SDCL 36-21A-125 defines an adverse material fact as information that negatively affects the property's value or a party's ability to perform, and lists environmental hazards required by law to be disclosed, material defects in the property, material title defects anticipated to survive the closing, and material limitations on a client's ability to perform. Sex offender information is treated separately and asymmetrically: SDCL 36-21A-134.1 gives a seller's or landlord's agent no duty to investigate, volunteer or disclose, while SDCL 36-21A-138.1 gives a buyer's agent no duty to investigate or volunteer but requires disclosure of actual knowledge upon the client's inquiry.
Limited agents and transaction brokers
SDCL 36-21A-140 permits limited agency only with the informed written consent of all parties, and gives the limited agent seven duties, including presenting all written offers in a timely manner and disclosing adverse material facts. SDCL 36-21A-141 lists four things a limited agent may not disclose without the informed written consent of the client concerned: that a buyer will pay more than the asking price, that a seller will take less, either party's motivating factors, and that a client will accept different financing terms. SDCL 36-21A-144 gives the transaction broker six duties and one prohibition, the prohibition being that no transaction broker may advise any party to the detriment of another; SDCL 36-21A-145 removes any duty to inspect independently, to verify statements by the seller, buyer or a qualified inspector, or to investigate the buyer's finances. SDCL 36-21A-135 and 36-21A-139 confirm that agents may list and show competing properties, and that a buyer's agent may assist competing clients pursuing the same property.
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State-specific details
State exam facts
- Exam vendor
- PSI
- Prelicensing education
- 116 classroom hours
- Passing score
- 75%
- Scored questions
- 142
- Time limit
- 270 minutes
Who regulates real estate brokers in South Dakota?
The South Dakota Real Estate Commission licenses real estate professionals in the state. SDCL 36-21A-13 makes it five members appointed by the Governor — three active brokers and two members of the public, who may not all be of one political party — and SDCL 36-21A-16 continues it within the Department of Labor and Regulation. The Commission has contracted with PSI Services LLC to deliver the examination; the bulletin lists sites in Sioux Falls, Rapid City and Madison, plus Fargo, North Dakota, and you may test at any PSI center in the United States.
Is the broker associate license really South Dakota's entry-level license?
Yes. The Commission's license types table lists Broker Associate with no experience requirement, and there is no salesperson row: South Dakota issues no new salesperson licenses, which is why PSI's bulletin is titled the Real Estate Broker Associate Examination. The tier has not been abolished on paper — SDCL 36-21A-12 still defines a real estate salesperson and ARSD 20:69:03:14 still sets a salesperson renewal fee — but the only way in now is the broker associate license, and an existing salesperson upgrades to it under SDCL 36-21A-34.1 by taking 40 hours of prescribed education and filing a broker associate application.
What education and experience do I need before the South Dakota broker exam?
None by way of experience. SDCL 36-21A-30.1 requires 116 class hours in a Commission-approved course of study, and ARSD 20:69:03:04 bars you from sitting the exam until that education is complete and you have registered. SDCL 36-21A-30 adds that you must be at least eighteen and either a United States citizen or a South Dakota resident. Experience matters only at the next tier: SDCL 36-21A-31 requires a responsible broker applicant to have served actively for two years as a licensed salesperson or broker associate and to complete 24 additional class hours beyond the broker associate level, which ARSD 20:69:04:04 makes a 24-hour responsible broker course carrying its own final examination.
How is the South Dakota broker exam structured?
The broker associate examination has a national portion of 90 items worth 100 points with 150 minutes allowed, and a South Dakota state portion of 52 items worth 52 points with 120 minutes allowed — 142 scored items and 270 minutes in total. ARSD 20:69:03:07 sets the passing score at 75, and each portion is passed separately, so a candidate who fails one retakes only that portion. The national portion includes scenario-based questions with more than four options where you pick the single BEST answer, and those options are weighted zero, one or two points; the South Dakota portion is scored one point per item.
What has to happen after I pass the South Dakota exam?
Two things people miss. SDCL 36-21A-36.1 gives you sixty days from the date of the notice that you passed to file the license application with all required documents; miss it and your registration and all rights deriving from the passing score are canceled, so you would have to sit the exam again. SDCL 36-21A-151 also requires a state and federal criminal background investigation by fingerprint checks through the Division of Criminal Investigation and the FBI, obtained before licensure and paid for by you. SDCL 36-21A-33 lists the eight grounds on which the Commission may refuse the application, including an insufficient funds check, a felony or a misdemeanor involving moral turpitude, and a current unpaid judgment.
Sources: https://dlr.sd.gov/realestate/license_types_requirements.aspx, https://dlr.sd.gov/realestate/exam_information.aspx, https://proctor2.psionline.com/programs/Instructions/SDRE.pdf, https://sdlegislature.gov/Statutes/36-21A, https://sdlegislature.gov/Rules/Administrative/20:69
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