S.D. Admin. R. 20:69:05:01
S.D. Admin. R. 20:69:05:01
General Authority: SDCL 36-21A-89(5).
Law Implemented: SDCL 1-26-29, 36-21A-68, 36-21A-86, 36-21A-93.
Declaratory Ruling:
(Repealed by Resolution 06-30-05 -01, dated July 27, 2005) In a typical real estate transaction, a licensee is the agent of the seller. A listing agreement, signed by the seller and a broker, specifies the rate of commission to be paid to the licensee or licensees who sell the property. Although the rate of commission specified in the listing agreement obligates the seller to pay the rate of commission specified in that contract, nothing in the real estate licensing statutes precludes a licensee from reducing that commission. Similarly, if a licensee has a properly executed agreement as a buyer's agent and receives compensation from that buyer, the statutes do not preclude a reduction in that compensation. However, the statutes prohibit any rebate of a commission to a client buyer or client seller.
Payment of compensation in the form of a rebate or kickback to a buyer by a seller's agent or to a seller by a buyer's agent is not permitted under existing statutes. However, if a monetary consideration is included as an incentive to enter into a transaction, that incentive becomes part of the terms and conditions of the transaction. An agent must then have the knowledge and consent of the principal, and those terms of the transaction must be included in the offer to purchase. South Dakota Real Estate Commission Declaratory Ruling 93-1.
The responsible broker, as defined by SDCL 36-21A-1(8), or the qualifying broker as defined by SDCL 36-21A-38, is responsible for the activities of salesmen and broker associates, as specified in SDCL 36-21A-79, and must endorse each listing agreement, as required by SDCL 36-21A-73, by signing the otherwise completed contract. South Dakota Real Estate Commission Declaratory Ruling 94-1.
(Repealed by Resolution 06-30-05 -02, dated July 27, 2005) This ruling provides an interpretation of SDCL 36-21A-71 subdivisions (9), (12), and (22) - Acts constituting unprofessional conduct and the use of various inducements offered to either the buyer or seller. The Real Estate Commission's decision concluded that commissions may be reduced and if other valuable consideration is included as a benefit then the consideration needs to be disclosed as part of the transaction with the licensee's principal's knowledge and consent. South Dakota Real Estate Commission Declaratory Ruling 03-01, dated April 7, 2003.