US South Dakota Salesperson License Exam

According to South Dakota Real Estate Commission rules, specifically Administrative Rule of South Dakota (ARSD) 20:69:07:02, all advertising conducted by a licensee must be done under the direct supervision of their responsible broker and must prominently and clearly display the name of the real estate firm as it is registered with the commission. The fundamental purpose of this rule is to ensure that the public is never misled about who is responsible for the advertisement and the services being offered. An advertisement that does not identify the brokerage firm is considered a “blind ad,” which is a serious violation. In the context of online and social media advertising, this requirement extends to individual posts or pages that function as separate advertisements. Simply having the brokerage name in a profile bio is insufficient if individual posts advertising specific properties are viewed independently, such as when they are shared or appear in a user’s news feed. Each piece of advertising content that stands on its own must contain the required brokerage identification to avoid creating a blind ad. The licensee’s personal name or a team name, while permissible if not misleading, cannot be a substitute for the registered firm’s name.

The core of this scenario revolves around the fiduciary duties a real estate licensee owes to their client in South Dakota. The acronym OLD CAR helps remember these duties: Obedience, Loyalty, Disclosure, Confidentiality, Accountability, and Reasonable Care. In this case, the most critical duties are Confidentiality and Loyalty. The seller’s financial hardship and urgent need to sell are confidential information, shared with the licensee within the fiduciary relationship. The duty of Confidentiality requires the licensee to protect this information and not disclose it to third parties without the client’s express permission. This duty survives the termination of the agency relationship. The duty of Loyalty requires the licensee to act solely in the best interests of their client, which includes protecting their negotiating position. Disclosing the seller’s distress would severely weaken this position, likely leading to lower offers, which is a direct violation of loyalty. While the duty of Disclosure is also a key fiduciary duty, it applies to material facts about the property itself, such as a leaky roof or a cracked foundation. A seller’s personal financial situation or reason for selling is not considered a material fact about the property that must be disclosed to potential buyers. Therefore, the licensee must decline to answer the buyer’s question about the seller’s motivation, as revealing this information would breach the duties of Confidentiality and Loyalty owed to the seller client.

The correct guidance involves differentiating between a reasonable accommodation and a reasonable modification under the Fair Housing Act and the South Dakota Human Relations Act. A reasonable accommodation is a change or exception to rules, policies, or practices necessary to afford a person with a disability an equal opportunity to use and enjoy a dwelling. Allowing an assistance animal despite a no-pet policy is a classic example of a reasonable accommodation. The housing provider must absorb the costs of the accommodation, which are typically administrative, and cannot charge a pet fee or deposit for the assistance animal. A reasonable modification is a structural change made to the premises to allow a person with a disability full enjoyment of the property. Installing a ramp is a structural change and therefore a reasonable modification. Under the Fair Housing Act, the landlord must permit the modification, but the tenant is generally responsible for paying for the installation. The landlord can also set reasonable conditions, such as requiring the work to be done in a workmanlike manner and, in some cases, requiring the tenant to restore the interior of the premises to its original condition upon moving out, minus normal wear and tear. Therefore, the landlord must permit the assistance animal without a fee and must allow the tenant to install the ramp at the tenant’s own expense.

In South Dakota, the law specifies how concurrent ownership of real property is interpreted. When two or more individuals acquire property together, the form of ownership is determined by the language in the conveying instrument, typically the deed. The two primary forms are tenancy in common and joint tenancy with right of survivorship. A key distinction lies in what happens upon the death of a co-owner. Under a joint tenancy, the deceased owner’s interest automatically passes to the surviving joint tenant(s), a feature known as the right of survivorship. However, for a joint tenancy to be created in South Dakota, the deed must expressly declare the intent to create one, for example, by using language such as “as joint tenants with right of survivorship.” According to South Dakota Codified Law 43-2-12, if the deed is silent on this matter and simply grants the property to multiple individuals, a tenancy in common is legally presumed. In a tenancy in common, each owner holds a separate, undivided interest in the property. This interest is descendible, meaning it can be transferred by will or, if the owner dies intestate, pass to their legal heirs. There is no right of survivorship. Therefore, when a tenant in common dies, their share of the property becomes part of their estate and is distributed according to their will or state succession laws, not to the other co-owners. In the given situation, the deed lacked the necessary language to establish a joint tenancy, so a tenancy in common was created by default. Consequently, the deceased co-owner’s interest passes to the beneficiary named in his will.

South Dakota law, specifically under SDCL Title 46A, governs water rights through the doctrine of prior appropriation, not the common law riparian doctrine. This means all waters within the state are the property of the people of the state, and the right to use water is acquired by obtaining a permit for a beneficial use. The principle of “first in time, first in right” applies. A landowner whose property is adjacent to a river does not automatically gain the right to consume or divert water simply by virtue of their location. While vested rights for water use predating the 1955 water law may exist, they must be properly adjudicated and recorded with the state to be legally defensible. In the given scenario, Elias has been using water without a state-issued permit. His long-term, unpermitted use does not establish a superior legal right. When Linnea applies for and is granted a water permit from the South Dakota Water Management Board for a recognized beneficial use, her right becomes legally established. Therefore, Linnea’s permitted use would be legally superior to Elias’s unpermitted historical use. A real estate professional must understand that water rights are separate from the land and are granted by the state, not by land ownership along a watercourse.

The legal outcome is determined by South Dakota’s adherence to the doctrine of prior appropriation for water rights, where rights are established by obtaining a permit for a beneficial use. These water rights are considered appurtenant to the land, meaning they are attached to the land and transfer with the title unless explicitly reserved or severed by the grantor in the deed. In this scenario, Anja held a vested senior water right for the irrigation of 100 acres. When she sold 40 of those acres to Mateo without any specific language in the deed concerning the water rights, the law presumes that the water right was divided and transferred proportionally with the land. Therefore, Mateo acquired the portion of the senior water right that was historically associated with the 40 acres he purchased. Anja retains the portion of the right associated with her remaining 60 acres. Mateo’s claim based on riparian principles is incorrect, as South Dakota law prioritizes the appropriation system over riparian claims for most uses. Anja’s belief that she retains the entire original right is also incorrect because the appurtenant right was not severed in the deed and thus transferred with the land it benefits. The sale does not invalidate the original senior right; it simply divides it between the new parcels.

South Dakota is not a community property state; it operates under the legal framework of equitable distribution. This is the central principle governing marital property within the state. In a community property system, assets acquired by either spouse during the marriage are generally considered to be owned equally by both. Conversely, property owned before the marriage or acquired by gift or inheritance during the marriage is typically classified as separate property. In the scenario presented, the real estate is located in South Dakota, and therefore, South Dakota law applies exclusively, regardless of where the buyers previously lived or where the funds originated. The concept of community property from another state like California does not transfer to or govern real property in South Dakota. When Anya uses her pre-marital inheritance for a down payment on a home that will be jointly titled with her new spouse, Ben, her funds risk becoming commingled. Commingling occurs when separate property is mixed with marital property to the extent that it loses its separate identity. If the property is titled in both their names, such as joint tenants with right of survivorship or tenants by the entirety, it is presumed to be a marital asset. Upon a potential divorce, a South Dakota court would subject the entire property, including the equity from the down payment, to equitable distribution. Equitable distribution means the court will divide the property in a manner it deems fair and just, which is not necessarily a 50/50 split. The court may consider the source of the down payment as one of many factors, but the funds are no longer automatically protected as her separate property once used for a joint marital asset. A real estate licensee must understand this distinction and advise clients to seek legal counsel to explore options like a prenuptial agreement if they wish to protect separate assets.

In South Dakota, the legal relationship between the owner of the surface estate and the owner of the mineral estate is a critical concept. When these estates are severed, the mineral estate is considered the dominant estate, and the surface estate is the servient estate. This means the mineral rights owner has an implied easement to use the surface in ways that are reasonably necessary to explore for, develop, and transport the minerals. However, this right is not absolute and is governed by specific state statutes designed to protect the surface owner. South Dakota Codified Law, specifically Chapter 45-5A, provides significant protections for surface owners. Before beginning any drilling operations, the mineral developer must provide the surface owner with written notice of their plans. More importantly, the developer is statutorily obligated to pay the surface owner for damages resulting from the mineral operations. These damages include compensation for the loss of agricultural production and income, lost land value, and any harm to tangible improvements on the property. The law mandates that the developer and the surface owner attempt to negotiate an agreement on these damages in good faith. The surface owner cannot unilaterally prevent the mineral development if the use is reasonable, but they are legally entitled to be compensated for the disruption and damages to their property and its use. This framework balances the rights of the mineral owner to access their property with the rights of the surface owner to be made whole for any resulting losses.

This is a conceptual question and does not require a mathematical calculation. In South Dakota, as in many states, property ownership can be separated into surface rights and subsurface rights. When these rights are severed, two distinct estates are created: the surface estate and the mineral estate. The mineral estate, which includes rights to oil, gas, and other minerals beneath the surface, is legally considered the dominant estate. The surface estate is the servient estate. This legal principle of dominance means the owner of the mineral rights has an implied easement to use the surface of the land as is reasonably necessary to explore for, develop, and produce the minerals. This right of reasonable use exists even if the surface owner objects. The mineral rights owner or their lessee, in this case the energy company, does not need to obtain separate permission or purchase an additional easement from the surface owner to conduct their operations. However, this right is not unlimited. The use of the surface must be reasonable and necessary for the extraction of the minerals. The mineral owner cannot use more of the surface than is required, nor can they act with negligence or cause excessive damage to the surface owner’s property or ongoing activities. The surface owner is entitled to compensation for damages to the surface, but they cannot prevent the reasonable access and use required for mineral development.

The core of this scenario involves evaluating why two physically similar parcels of land have vastly different values. The primary reason for the significant value discrepancy is the economic characteristic of situs. Parcel A’s location, immediately adjacent to a new, major employment center (the agricultural tech campus) and within a zone of significant public infrastructure investment, gives it a superior economic advantage. This preference for a particular location due to external economic and social factors is the definition of situs. While the city’s infrastructure investment is a permanent one, and the utility hookups are improvements, these elements serve to enhance the desirability of the location. The fundamental driver of the value difference is not the investment itself (permanence) or the on-site additions (improvements), but rather the economic desirability of that specific geographic spot, which is situs. Scarcity is a general principle applying to all land and does not explain the specific value difference between these two parcels. Therefore, situs, or area preference, is the economic characteristic that most accurately and comprehensively explains why Parcel A is substantially more valuable than Parcel B. Real estate value is determined by a combination of physical and economic characteristics. The four key economic characteristics are scarcity, improvements, permanence of investment, and situs. Scarcity refers to the finite supply of land. Improvements are the man-made additions to the land that can affect its value. Permanence of investment, or fixity, describes the long-term, illiquid nature of real estate investments, such as buildings and infrastructure, which cannot be easily moved. Situs, often considered the most important characteristic, is the preference people have for certain locations. It is the sum of all economic, social, and public factors that make one location more desirable than another. In this case, the new tech campus, transportation access, and public utilities create a highly desirable situs for Parcel A, directly causing its higher valuation compared to the more isolated Parcel B, even though both parcels are subject to the general principles of scarcity and permanence of investment.

The legal analysis begins by identifying the governing statute, the South Dakota Short-Term Redemption Mortgage Act, found in SDCL Chapter 21-49. Under standard South Dakota foreclosure law, a borrower typically has a one-year statutory right of redemption following a foreclosure sale. However, the Short-Term Redemption Mortgage Act allows for a modification of this period. For this Act to apply, the mortgage document must explicitly state that it is a “short-term redemption mortgage” and that the provisions of SDCL Chapter 21-49 govern the agreement. When these conditions are met, the borrower’s statutory redemption period is reduced from one year to 180 days. The most critical component of this Act, however, is the trade-off for the lender. In exchange for securing this significantly shorter redemption period, the lender, or mortgagee, explicitly waives any right to obtain a deficiency judgment against the borrower, the mortgagor. A deficiency judgment is a court order that allows a lender to collect the remaining balance of a loan if the proceeds from a foreclosure sale are insufficient to cover the full debt. Therefore, by including the short-term redemption clause, the lender contractually and statutorily forfeits its ability to pursue the borrower for any shortfall after the property is sold at foreclosure. This protection for the borrower is absolute under the Act.

The situation described constitutes the “first substantive contact” under South Dakota law. This is defined as the point in a conversation where a licensee begins to elicit, accept, or receive confidential information from a consumer related to their real estate needs, such as their financial qualifications or motivating factors. Kai’s statement about his maximum purchase price is precisely this type of confidential information. According to South Dakota Codified Law 36-21A-131, at the first substantive contact, a licensee is required to provide the consumer with a copy of the South Dakota Real Estate Commission’s agency disclosure pamphlet. This pamphlet outlines the different types of agency relationships available: seller’s agent, buyer’s agent, disclosed limited agent, and transaction broker. The purpose of this mandatory disclosure is to ensure the consumer understands the licensee’s role and duties before any further substantive discussions occur. In this scenario, Amara is acting as the seller’s agent. By providing the pamphlet, she clarifies her existing fiduciary duty to the seller and informs Kai that any information he shares is not confidential in the context of that relationship. This action must precede any response to Kai’s question about price flexibility to comply with state law and avoid creating an unintended or undisclosed agency relationship.

The analysis centers on the legal distinction between real property and personal property in a real estate transaction. The three items in question must be evaluated based on established legal principles, including the tests for fixtures and the doctrine of emblements. The grain silo’s status is determined by the fixture tests: method of annexation, adaptability, relationship of the parties, and intent. Although it is unbolted, its substantial size and custom adaptation to the farm’s operations strongly suggest it was intended to be a permanent part of the real estate, making it a fixture. The freestanding wood-burning stove is less permanently attached, but its classification can be ambiguous and often depends on intent. The most definitive classification applies to the winter wheat. As an annually cultivated crop planted through the seller’s labor, it falls under the legal doctrine of emblements, or fructus industriales. This doctrine specifically classifies such crops as the personal property of the individual who planted them. This right is so established that the planter, Arvid, retains the legal right to re-enter the property after its sale for the sole purpose of harvesting the mature crop. Therefore, compared to the silo and the stove whose classifications rely on a multi-factor and sometimes subjective test, the winter wheat is most clearly and legally defined as the seller’s personal property.

For a voluntary transfer of real property by deed to be legally effective in South Dakota, several elements must be present. The grantor must have the intent to convey title, execute a written deed containing a legal description and words of conveyance, and sign it. Crucially, there must be a valid delivery of the deed to the grantee during the grantor’s lifetime. Delivery is the final act of the grantor, signifying their intention to pass title immediately and relinquish all control over the instrument. In this scenario, the grantor prepared and signed a deed but placed it in a location to which she retained exclusive access and control. Her instruction for the grantee to retrieve the deed only after her death indicates that her intent was not for the title to pass immediately, but rather at the time of her death. This constitutes a failed delivery. Because the grantor did not part with legal control of the deed during her lifetime, the conveyance was incomplete. The deed is therefore void as it represents an improper attempt to make a testamentary disposition of property without complying with the legal formalities of a will. Consequently, title to the property never transferred to the intended grantee. The property remained part of the grantor’s estate upon her death and must be distributed according to the terms of her valid will. The will, as the controlling legal instrument in this case, dictates the rightful heir to the property.

No calculation is required for this question. In South Dakota, real estate agency relationships are strictly defined and regulated. A licensee is presumed to be a transaction broker unless a written agreement establishes a different relationship, such as a single agency (representing only the seller or only the buyer) or a limited agency (representing both parties in the same transaction). When a licensee who has a listing agreement with a seller is contacted by a potential buyer for that same property, a potential conflict of interest arises. The licensee must immediately clarify the relationship with the buyer to avoid unauthorized dual agency. If the buyer expresses a desire not to be represented but still wants assistance with the mechanics of the transaction, such as preparing an offer and facilitating communication, the most appropriate and legally compliant relationship is that of a transaction broker. As a transaction broker for the buyer, the licensee would owe that party facilitation services without fiduciary duties of loyalty or advocacy. The licensee would remain the seller’s agent. To formalize this, South Dakota law requires a written transaction broker agreement to be signed by the party before the licensee performs real estate services. This agreement clarifies that the licensee is not acting as the buyer’s agent and outlines the specific duties owed. Proceeding without this written clarification could lead to an implied agency relationship or a violation of state regulations. Limited agency, where one licensee represents both parties, is only permissible with the prior written informed consent of both the seller and the buyer.

Involuntary alienation refers to the transfer of property ownership without the owner’s consent. One method of involuntary alienation is adverse possession, where an individual can acquire title to another’s property through prolonged, unpermitted use. In South Dakota, the general statutory period for a claim of adverse possession requires the possession to be actual, open, visible, notorious, continuous, and hostile for twenty years, as outlined in SDCL 15-3-1. However, a significant exception exists under SDCL 15-3-15. This statute provides a shorter period of ten years if the claimant’s possession is under “color of title” and they have paid all legally assessed taxes on the property for ten consecutive years. “Color of title” means having a written instrument, like a deed or a court decree, that appears to convey title but is actually defective or invalid. In the described situation, the individual had a faulty deed, which constitutes color of title. They also paid the property taxes on that specific parcel for twelve years. Since this twelve-year period of possession and tax payment exceeds the ten-year requirement stipulated in SDCL 15-3-15, the claimant has met the necessary legal conditions to acquire title through adverse possession, despite not meeting the standard twenty-year period. The original owner’s lack of knowledge or out-of-state status does not negate a valid adverse possession claim if all statutory elements are met.

In South Dakota, the default form of co-ownership for two or more unmarried individuals is tenancy in common, unless the deed expressly declares an intent to create a joint tenancy. A defining characteristic of tenancy in common is that there is no right of survivorship. This means that when one co-tenant dies, their ownership interest does not automatically transfer to the surviving co-tenants. Instead, the deceased co-tenant’s interest is treated like any other asset in their estate. It is inheritable and passes to their heirs or devisees as specified in a will. If the co-tenant dies without a will, or intestate, their interest passes to their legal heirs according to the state’s laws of intestate succession. In the described scenario, the three individuals hold title as tenants in common. When one of them dies intestate, his fractional ownership interest becomes part of his estate. Under South Dakota’s laws of succession, this interest would pass to his legally recognized heir. The heir then steps into the deceased’s position, becoming a new tenant in common with the original surviving owners. The surviving co-tenants retain their original, undiminished fractional interests, and the heir holds the fractional interest inherited from the decedent. The form of ownership among the new group remains a tenancy in common.

The core issue is the legal recognition of different forms of property co-ownership within South Dakota. Tenancy by the entirety is a special form of joint ownership available only to married couples in certain states. It is characterized by the five unities of time, title, interest, possession, and person (the legal fiction that a married couple is one person). A key feature is that neither spouse can unilaterally sever the tenancy or convey their interest, and it provides significant protection from the individual creditors of one spouse. However, South Dakota is not a state that recognizes tenancy by the entirety. When a deed in South Dakota attempts to create this form of ownership, the state’s legal system must interpret the grantors’ intent based on the recognized forms of ownership. The language “tenants by the entirety” strongly implies an intent to create a right of survivorship, which is the hallmark of a joint tenancy. Therefore, South Dakota courts will typically construe such a conveyance as creating a joint tenancy with right of survivorship, provided the four unities required for a joint tenancy (time, title, interest, and possession) are met. The ownership would not automatically convert to a tenancy in common, as that form lacks the right of survivorship. It also would not create a form of community property, as South Dakota is a separate property state.

The correct instrument in this situation is a Special Warranty Deed. This type of deed provides a specific and limited form of protection to the grantee. In a Special Warranty Deed, the grantor covenants that they have not personally done anything to encumber or cloud the title during their period of ownership. The warranty is restricted solely to the grantor’s tenure. This directly addresses the seller’s reluctance to be held liable for any potential title defects that may have existed before they acquired the property, such as issues stemming from a prior tax sale. It provides the buyer with assurance against any liens, claims, or encumbrances created by the seller themselves. This is distinct from a General Warranty Deed, which would obligate the seller to defend the title against all claims from all sources, throughout the entire history of the property. A Quitclaim Deed, conversely, offers no warranties at all, simply transferring whatever interest the grantor may have, if any. The Special Warranty Deed therefore serves as a compromise, balancing the buyer’s need for some level of protection with the seller’s desire to limit their liability to their own actions and period of ownership. This is a common instrument used when a seller, such as a fiduciary or someone who acquired property through foreclosure or inheritance, has limited knowledge of the property’s complete title history.

The core principle demonstrated in this scenario is indestructibility. This physical characteristic of land posits that land is a permanent commodity and cannot be destroyed. While its improvements, such as buildings, landscaping, or even topsoil, can be removed or destroyed by natural disasters or human action, the fundamental parcel of land itself remains. In the given situation, the house and the land’s immediate utility were eliminated by the flood. However, the geographic location and the legal boundaries defining the parcel of land continue to exist. Amara still holds title to that specific piece of the earth’s surface. This is distinct from immobility, which refers to the fact that the parcel’s location is fixed and cannot be moved. While immobility explains why the property was susceptible to the localized flood, it does not explain why the land itself endures post-disaster. Similarly, uniqueness, or non-homogeneity, states that no two parcels are identical. This is critical for valuation and legal matters like specific performance, but it is the land’s indestructibility that ensures its continued existence as a legal and physical entity despite catastrophic damage to its surface and improvements. The economic value and utility may be gone, but the asset itself is not.

N/A In South Dakota real estate transactions, the formation of a valid contract is governed by the principles of offer and acceptance. When a potential buyer submits an offer, the seller can accept it, reject it, or make a counteroffer. A counteroffer is any response from the seller that modifies the terms of the original offer, even slightly. This could be a change in price, closing date, contingencies, or personal property included. According to the “mirror image rule,” an acceptance must be an exact mirror of the offer. Any deviation constitutes a counteroffer. Legally, a counteroffer serves two functions: it is a rejection of the original offer, and it is a new offer from the seller to the buyer. Once the counteroffer is made, the original offer is legally terminated and cannot be revived or accepted by the seller later. The power of acceptance now shifts to the buyer, who can accept the seller’s new terms, reject them, or make their own counteroffer. In the scenario presented, when the seller changed the closing date, they rejected the buyer’s initial offer and created a new one. The seller’s subsequent attempt to go back and accept the buyer’s original offer is legally ineffective because that offer no longer exists. There is no “meeting of the minds” and therefore no binding contract.

In South Dakota, an easement by necessity is a legal right of access created by a court when a parcel of land is sold and becomes landlocked, meaning it has no access to a public road. The creation of this type of easement rests on three fundamental requirements. First, the dominant tenement (the landlocked parcel) and the servient tenement (the parcel over which access is sought) must have been under common ownership at some point in the past. Second, the owner must have severed the property, for instance by selling a portion, and this act of severance must be the direct cause of the dominant tenement becoming landlocked. Third, the easement must be strictly necessary for the use and enjoyment of the landlocked property, not merely a matter of convenience. The law presumes that a grantor does not intend to render land useless by selling it without access. Unlike an easement by prescription, which requires long-term, adverse use, or an implied easement from prior use, which requires that the access route was used before the severance, an easement by necessity is based solely on the situation created at the moment of the land transfer. The location of the easement is typically what is most reasonable and least burdensome to the servient estate while still providing effective access for the dominant estate.

The determination of whether the cattle sorting system is a fixture or personal property is based on an analysis of the legal tests for fixtures. The primary tests include the method of annexation, the adaptability of the item to the real estate’s use, the relationship of the parties, and the intention of the annexor. While the system is not physically bolted down (method of annexation), its immense weight and custom design for the specific barn layout demonstrate a high degree of adaptability. This customization strongly implies that the item was intended to be a permanent part of the ranch’s operational infrastructure. In a dispute between a buyer and a seller, courts in South Dakota, following general common law principles, tend to favor the buyer. The most crucial test is the intention of the party who installed the item. When an agreement does not explicitly state the intention, it is inferred from the surrounding circumstances. The fact that the system was custom-built for that specific barn is powerful evidence of an intent to make it a permanent addition. The item’s unique suitability for the property makes it integral to the property’s function as a cattle ranch. Therefore, despite being free-standing, its functional and custom adaptation to the realty, combined with the buyer-seller relationship, leads to the conclusion that it is a fixture and conveys with the real property. The concept of trade fixtures does not apply here, as that rule pertains to items installed by a tenant for business purposes, not a seller.

In South Dakota, a lien theory state, the priority of liens is crucial in a foreclosure. Liens are generally prioritized based on their recording date, following the “first in time, first in right” principle. However, South Dakota law gives real property tax liens super-priority over all other liens, regardless of when they were recorded. In the given scenario, the priority order is: first, the county property tax lien; second, the Black Hills Bank first mortgage; third, the HELOC; and fourth, the mechanic’s lien. When a senior lienholder, in this case, the first mortgage holder, forecloses, the sale extinguishes all liens that are junior to it. Therefore, the foreclosure by Black Hills Bank will wipe out both the HELOC and the mechanic’s lien as encumbrances against the property. The proceeds from the foreclosure sale are distributed in order of lien priority. After paying the costs of the sale, the funds will first satisfy the super-priority property tax lien. Next, the foreclosing first mortgage will be paid. If any surplus funds remain, they will be distributed to the junior lienholders in their order of priority, first to the HELOC and then to the mechanic’s lienholder. If the surplus is insufficient to cover their debts, their liens on the property are still gone. Their only remaining recourse is to seek a personal deficiency judgment against the borrower, Mateo, for the unpaid balance. The purchaser at the foreclosure sale takes title to the property free and clear of these extinguished junior liens.

This scenario does not require a mathematical calculation. The solution is based on the legal interpretation of actions under South Dakota agency law. In South Dakota real estate, an agency relationship is a fiduciary relationship where a licensee represents a client by the client’s consent and on the client’s behalf. This relationship can be created expressly, through a written or oral agreement, or it can be created by implication. An implied agency is formed based on the words and actions of the licensee and the principal. If a licensee acts in a way that leads a reasonable person to believe that the licensee is representing them, an implied agency relationship can be established, even without a formal agreement. Key actions that can create an implied agency include providing confidential advice, negotiating on behalf of a party, or making statements that imply loyalty and advocacy, such as promising to get the “best deal” for them. These actions go far beyond ministerial acts, which are tasks that a licensee may perform for a customer that are informative or clerical in nature and do not rise to the level of active representation. Ministerial acts include things like providing property fact sheets, setting up appointments, or explaining the process of making an offer without giving advice on the terms of that offer. When the broker associate in this scenario offered specific advice on pricing and promised to advocate for the buyer’s interests, she crossed the line from providing customer-level ministerial acts to performing fiduciary duties. This created an implied agency with the buyer, which directly conflicts with her pre-existing express agency relationship with the seller, resulting in an improper and undisclosed dual agency situation.

The situation described is a clear example of the illegal practice of steering. Under both the federal Fair Housing Act and the South Dakota Human Relations Act (SDCL 20-13), familial status is a protected class. Steering occurs when a real estate licensee influences a client’s housing choice toward or away from a specific area based on a protected characteristic. In this case, the agent is making a decision for the clients based on their status as a family with children. Even though the clients expressed a desire for a “family-friendly” neighborhood, the agent’s legal and ethical duty is to show all properties that meet the clients’ objective criteria, such as price, size, and general location. By intentionally withholding information about suitable properties in the historic district based on his assumption about its demographic makeup (fewer children, more retirees), the agent is limiting the clients’ housing choices and perpetuating segregation. The agent should provide the clients with all relevant listings and let them decide for themselves which neighborhood they prefer. This is different from blockbusting, which involves inducing panic selling, and redlining, which is a discriminatory lending practice. The agent’s actions, while perhaps well-intentioned, constitute illegal steering.

No calculation is required for this conceptual question. For a deed to validly transfer title to real property in South Dakota, several key elements must be met. These include a written instrument, a competent grantor, an identifiable grantee, words of conveyance, an adequate legal description of the property, and the grantor’s signature. However, one of the most critical and often misunderstood elements is the requirement of delivery and acceptance. Delivery is not simply the physical act of handing over the paper; it is the legal act of the grantor demonstrating a clear intent to pass title immediately and irrevocably, surrendering all control and dominion over the instrument. The grantor must part with legal control of the deed during their lifetime. In the described situation, the grantor executed a deed but retained exclusive control over it by placing it in a location accessible only to them, with instructions for it to be found after their death. The grantor never informed the grantee of the deed’s existence. This action fails to meet the legal standard for delivery. Because the grantor retained the power to retrieve and destroy the deed at any time before death, they did not surrender control. The intent was for the transfer to be effective upon death, which is a testamentary transfer. However, a deed cannot function as a will. Testamentary transfers must comply with the specific legal formalities required for a will. Since there was no valid delivery during the grantor’s life, the deed is ineffective as a conveyance. The property remains an asset of the grantor’s estate and must be distributed according to the terms of a valid will or, if there is no will, through the laws of intestate succession. Recording a deed after the fact cannot cure a fatal defect like the lack of delivery.

No calculation is required for this question. South Dakota operates as a lien theory state regarding mortgages. This legal framework is fundamental to understanding property rights in secured transactions. Under the lien theory, a mortgage does not convey any ownership or title to the lender. Instead, the mortgage instrument creates a specific lien on the property in favor of the lender, which serves as security for the repayment of the loan. The borrower, or mortgagor, retains both legal and equitable title to the property throughout the life of the loan. This means the borrower is the full legal owner and has all the rights of ownership, including the right of possession, use, and disposition, subject only to the lender’s lien. In the event of a default, the lender cannot simply take possession or claim ownership of the property. Because the borrower still holds full title, the lender’s recourse is to enforce its lien through a legal process known as foreclosure. In South Dakota, this is typically a judicial foreclosure, where the lender files a lawsuit and obtains a court order to sell the property to satisfy the debt. The borrower’s ownership and right to possess the property are only terminated upon the completion of the foreclosure sale and the expiration of any statutory redemption period. This contrasts sharply with title theory states, where the lender holds legal title and may have a more direct path to taking possession upon default. The principle that a mortgage is only a lien is codified in South Dakota law, reinforcing the borrower’s position as the property owner until judicially divested.

This situation involves a holdover tenant, which is a tenant who remains in possession of a property after the lease term has expired. Initially, when the original three-year lease ends, the tenant’s continued presence without the landlord’s consent creates a tenancy at sufferance. At this point, the landlord has two primary options: treat the tenant as a trespasser and begin eviction proceedings, or accept rent from the tenant. In this case, the landlord chose to accept and deposit the rent check. Under South Dakota law, specifically SDCL 43-32-14, if a lessee of real property remains in possession after the expiration of the hiring and the lessor accepts rent from him, the parties are presumed to have renewed the hiring on the same terms and for the same time, not exceeding one year. This statute is critical. Even though the original lease was for a three-year term, the law explicitly limits the renewal period created by holding over and accepting rent to a maximum of one year. Therefore, the act of accepting rent converts the tenancy at sufferance into a new, legally recognized leasehold. This new lease is a periodic tenancy, specifically a year-to-year tenancy, because the original lease term was longer than a month and the statute caps the renewal at one year. The terms of the original lease, such as the rent amount and other covenants, would carry over into this new one-year term.

In South Dakota, water rights are governed primarily by the doctrine of prior appropriation, not the common law riparian doctrine of reasonable use. This principle is often summarized as “first in time, first in right.” All water within the state is considered the property of the people, but individuals can acquire a right to use it. A water right that was established and put to a beneficial use, such as for livestock, before the enactment of the state’s statutory water permit system in 1955 is known as a vested right. These rights are legally protected even if the user never obtained a formal permit. The owner of a vested right is a senior appropriator. A new user, or junior appropriator, can only receive a permit for water that is surplus to the needs of all senior rights holders. In the described situation, the long-standing, continuous use of water for livestock would almost certainly qualify as a vested right. Therefore, this pre-existing, senior right has priority and must be satisfied before a new, junior appropriation for a different purpose can be approved and initiated. The state’s Water Management Board cannot issue a new permit that would impair an existing vested right. The fact that the creek is non-navigable affects ownership of the creek bed to its center thread, but it does not change the state’s authority over the water itself, which is allocated based on prior appropriation.