Key Takeaways
- South Dakota recognizes single agency, limited agency (dual agency), and appointed agents (designated agency)
- A single agent represents only the buyer OR the seller - never both simultaneously
- Limited agency requires written consent from both parties before the relationship can exist
- Appointed agents allow the responsible broker to designate separate agents for each party in the same brokerage
- All licensees have duties to ALL parties: honest dealing, disclosure of material facts, and accurate responses
South Dakota Agency Relationships
South Dakota law defines the types of agency relationships that real estate licensees may have with consumers.
Types of Agency Relationships
Single Agency
A single agent is a licensee who represents only one party in a transaction:
| Single Agent Role | Represents |
|---|---|
| Seller's agent | Seller only |
| Buyer's agent | Buyer only |
Single agent duties include:
- Undivided loyalty to the client
- Confidentiality of client information
- Full disclosure of material facts to client
- Obedience to lawful instructions
- Accounting for all funds
- Reasonable care and diligence
Limited Agency (Dual Agency)
Limited agency occurs when the responsible broker represents both parties in a transaction:
- Two agents in the same brokerage represent the buyer and seller, OR
- One agent works for both the buyer and seller
Requirements for Limited Agency
| Requirement | Description |
|---|---|
| Written consent | Both parties must consent in writing before the relationship |
| Prior disclosure | Full disclosure of the limited agency relationship |
| Confidentiality limits | Cannot disclose price/terms one party will accept |
| Neutral position | Must remain impartial to both parties |
Key Point: Limited agency may only occur with prior written permission of both parties. In a limited agency relationship, the broker may not be able to provide full advocacy to either party.
Appointed Agents (Designated Agency)
Appointed agents allow the responsible broker to designate separate licensees to represent each party:
| Feature | Description |
|---|---|
| Purpose | Preserve advocacy for each party in same-brokerage transaction |
| Designation | Responsible broker appoints specific agents |
| Consent | Requires knowledge and written consent of both parties |
| Confidentiality | Each appointed agent maintains client confidentiality |
Duties to ALL Parties
South Dakota law imposes certain duties on all licensees to all parties in a real estate transaction, regardless of representation:
Universal Duties
| Duty | Description |
|---|---|
| Material fact disclosure | Disclose all known material facts about the property that could affect use or enjoyment |
| Transaction ability | Disclose information that could impact either party's ability to fulfill obligations |
| Honest responses | Respond honestly and accurately to questions from any party |
What Must Be Disclosed to All Parties
Regardless of who the licensee represents:
- Known material facts about the property
- Information affecting transaction ability of either party
- Honest and accurate responses to all questions
Transition to Limited Agency
All licensees of a brokerage firm owe duties as described in single agency until a purchaser inquires about a property under contract for sale/lease with that same firm. At this point:
- A limited agency relationship may exist
- Limited agency requires prior written permission of both parties
- If no written permission is obtained, the broker cannot proceed with dual representation
Compensation Disclosure
A licensee shall not accept compensation from more than one party without full written disclosure to all parties.
| Situation | Requirement |
|---|---|
| Fee from one party | Standard - no special disclosure |
| Fee from multiple parties | Must disclose to ALL parties in writing |
Agency Agreement Forms
South Dakota provides standard agency agreement forms:
| Form | Purpose |
|---|---|
| Agency Agreement - Seller | Establishes seller representation |
| Agency Agreement - Purchaser | Establishes buyer representation |
| Limited Agency Disclosure | Documents dual agency consent |
What type of agency exists when one South Dakota licensee represents both the buyer and seller in the same transaction?
When is written consent required for limited agency in South Dakota?
Which duty does a South Dakota licensee owe to ALL parties in a transaction?