Brokerage Relationships and Agency Agreements
PSI's third outline area, Statutory Requirements Governing the Activities of Licensees, carries 42 of the 52 scored items and is printed as a single undifferentiated line. PrepPass divides it into seven chapters that follow the structure of SDCL chapter 36-21A itself; this division is ours, not PSI's. This chapter covers which relationships exist and what the paperwork that creates them must say.
The five permitted relationships
SDCL 36-21A-131 limits a licensee to four categories: single agent, which splits into seller or landlord agent and buyer or tenant agent; limited agent; subagent; and transaction broker. SDCL 36-21A-1(13) defines the limited agent as a licensee with a written agency relationship with both the seller and the buyer in the same in-company transaction, which is what other states call dual agency. SDCL 36-21A-1(23) defines the transaction broker as a broker who assists parties without being an agent or advocate for anyone. SDCL 36-21A-143 defines subagency as acting for another broker's client with the written permission of that client, and provides that the subagent owes the client the same obligations and responsibilities the client's own broker owes. SDCL 36-21A-1(24) is the sentence that ties the system together: no brokerage relationship may be created or implied by word or action alone, but only by written agreement.
What an agency agreement must contain
SDCL 36-21A-130 requires a seller or lessor agency agreement to be in writing and to contain the proper legal description, the price and terms, the date of authorization, the expiration date, the type of agency relationship established, the compensation to be paid, authorization to cooperate with or compensate other brokers, and the signatures of all parties. A buyer or tenant agreement must describe the type and geographical area of property sought and state the type of relationship, the compensation, the date of authorization, the expiration date and the signatures. The licensee who obtains the agreement must give the signer a copy. An agency agreement with a buyer, seller or lessee may not provide for automatic renewal at expiration; only a property management agreement may, and only if it also provides for written cancellation on terms agreeable to all parties. The agreement must be signed by the responsible broker, who may authorize an associate to sign on the broker's behalf. ARSD 20:69:17:01 requires the forms to be substantially the same as those the commission prescribes and lists what a purchase agreement drafted by a licensee must contain.
When a relationship begins, and what survives its end
SDCL 36-21A-128 lists nine informative initial acts that do not amount to representation: answering phone inquiries about services, price or location, hosting an open house and answering questions, setting a viewing appointment, answering a walk-in's questions, describing a property, accompanying an appraiser or inspector, referring a person on, and giving a one-time showing of one property. SDCL 36-21A-129 defines substantive contact as any performance beyond those acts, and specifically discussion of the buyer's financial qualifications or of either party's motives, where confidential information could be divulged. SDCL 36-21A-127 defines confidential information and excludes from it material facts about the physical condition of the property. At the other end, SDCL 36-21A-150 provides that once the engagement terminates, expires or is performed, the only surviving duties are accounting for money and property received and keeping confidential all information received during the engagement.
Keep going: the full South Dakota Real Estate Broker guide covers every section of the exam. South Dakota Real Estate Broker Exam Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
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
In the South Dakota Real Estate Broker guide: A 60-question national practice exam, with a key that explains all four options and not just the right one. Practice here stays free.