US South Dakota Broker License Exam

A real estate broker operating a website in South Dakota that collects personal information from consumers has a significant responsibility to be transparent about their data practices. This falls under the general principles of truthful and non-deceptive advertising as mandated by the South Dakota Real Estate Commission. The most critical step is to provide a comprehensive and easily accessible privacy policy. This policy serves as the primary disclosure document to the consumer. It must clearly articulate what specific personal information is being collected, the precise purposes for which this information will be used, and how the data will be stored and protected. Furthermore, the policy must inform users of their rights, including the ability to review their data, request corrections, and, most importantly, opt-out of future communications or data use. Simply collecting data without this explicit, informed consent can be construed as a deceptive practice. While internal security measures are vital for protecting the collected data, they do not fulfill the external disclosure obligation to the consumer. The core of compliance in this area is transparency and providing the user with control over their own information, which is achieved through a detailed and conspicuous privacy policy. This practice aligns with federal guidelines from the FTC and principles of fair information practices, which are essential for any modern business handling consumer data.

The legal reasoning to determine the outcome is as follows. First, the nature of the co-ownership must be established. Under South Dakota Codified Law (SDCL) 43-2-12, an interest is owned by several persons in joint tenancy only when expressly declared in the transfer to be a joint tenancy. The language in the deed, “to Anya, Boris, and Caspian, as co-owners,” does not contain the express declaration required to create a joint tenancy with the right of survivorship. Therefore, according to SDCL 43-2-15, the ownership is a tenancy in common. In a tenancy in common, each owner holds a separate, undivided fractional interest in the property. In this case, each sibling holds a one-third interest. A crucial characteristic of a tenancy in common is that there is no right of survivorship. When a tenant in common dies, their interest does not automatically pass to the surviving co-tenants. Instead, it is a part of their estate and passes to their heirs or devisees as specified by a will or by the laws of intestate succession. Since Boris died intestate, his one-third interest passes to his legal heirs. A judgment lien properly recorded attaches to the debtor’s real property interest. The lien attached to Boris’s one-third interest. Because his property interest was not extinguished upon his death (as it would have been in a joint tenancy), the lien remains attached to that interest as it passes to his heirs. The creditor can foreclose on that one-third interest now held by the heirs to satisfy the debt. Anya and Caspian continue to own their respective one-third interests, now sharing ownership as tenants in common with Boris’s heirs, whose share is encumbered by the lien.

The broker’s primary responsibility is rooted in their fiduciary duty of care and disclosure to their client. In this scenario, the broker has personally observed a potential material defect—signs of moisture in the basement. This observation conflicts with both the seller’s property disclosure statement and the professional home inspector’s report. Under South Dakota law and professional standards, a broker cannot ignore information they personally possess that is material to the transaction, even if it is not corroborated by official documents. The home inspector’s note about limited access further highlights the risk. The broker’s duty of care compels them to act on their observation. The duty of disclosure requires them to inform their client of the discrepancy and the potential risk it represents. Therefore, the most appropriate and legally sound action is to advise the client of the conflict between the broker’s observation, the seller’s statement, and the inspection report. The broker should then recommend that the client seek a more specialized, invasive inspection from a qualified expert, such as a foundation or mold remediation specialist, to definitively assess the situation before proceeding. This advice should be documented in writing to protect both the client and the broker. Simply deferring to the inspector or the seller’s disclosure would be a failure of the broker’s duty to exercise reasonable care and skill to protect their client’s interests.

The analysis begins with the termination of the initial buyer agency agreement. In South Dakota, a principal has the power to revoke an agency relationship at any time, even if it breaches the contract term. While the principal might be liable for damages based on the agreement’s terms, the agent’s authority to act on the principal’s behalf is effectively terminated upon revocation. This act ends the agent’s fiduciary duties of obedience, loyalty, disclosure, and reasonable care as they relate to future actions. However, the duty of confidentiality regarding information acquired during the agency relationship survives termination. Therefore, any confidential information the agent learned about the client’s financial position or motivations must remain confidential indefinitely. When the former client proposes a new relationship for a different transaction, specifically as a transaction broker, a new set of rules applies. Under South Dakota law, a transaction broker is not an agent and does not have a fiduciary relationship with either party. To proceed, the licensee must secure a new written agreement, a transaction broker agreement, that clearly defines this non-agency role and its limitations. The licensee’s duties shift from fiduciary advocacy to facilitation, requiring honesty, fair dealing, accounting for all funds, using skill and care, and disclosing any known adverse material facts about the property. The licensee must facilitate the transaction without acting as an advocate for either the buyer or the FSBO seller. The pre-existing duty of confidentiality from the prior agency relationship remains in effect.

No calculation is required for this question. The core issue revolves around the interplay between the owner-occupant exemption in fair housing law and the involvement of a real estate licensee. Under the Federal Fair Housing Act, an exemption commonly known as the “Mrs. Murphy” exemption allows the owner of a dwelling with four or fewer units, who also occupies one of the units, to be exempt from certain fair housing provisions when renting out the other units. This exemption, however, has critical limitations. The most significant limitation, and the one tested here, is that the exemption is nullified if a real estate broker or their agent is involved in the transaction in any capacity. This includes advertising, showing the property, or negotiating the lease. Furthermore, discriminatory advertising is never permitted, even under the exemption. South Dakota’s Human Relations Act, specifically SDCL 20-13, mirrors these federal protections. Familial status, which includes the presence of children under 18, is a protected class. Therefore, refusing to rent to someone because they have children constitutes illegal discrimination. When a property owner like the one in the scenario engages a broker, they subject the transaction to the full scope of both federal and state fair housing laws, and any potential exemptions they might have had as a private owner acting alone are forfeited. The broker’s legal and ethical duty is to uphold these laws. The broker must inform the client that their requested action is illegal and refuse to participate in the discriminatory practice. Proceeding with the client’s discriminatory request would make the broker complicit and liable for a fair housing violation.

The core of this issue rests on the distinct legal requirements for disclosing lead-based paint versus asbestos in residential rental properties in South Dakota. The broker’s obligations are dictated by a combination of federal law and state disclosure rules. For lead-based paint, the federal Residential Lead-Based Paint Hazard Reduction Act of 1992 (Title X) applies to nearly all housing built before 1978. This act imposes a strict, affirmative duty on landlords and their agents. Regardless of whether the owner has actual knowledge of lead paint, the age of the building itself triggers the requirement. The property manager must provide every new tenant with the EPA-approved pamphlet “Protect Your Family From Lead In Your Home,” include a specific Lead Warning Statement within the lease agreement, and disclose any known information about lead-based paint or related hazards. The tenant must be given the opportunity to review this information before becoming obligated under the lease. In contrast, the duty to disclose asbestos is based on a different standard. In South Dakota, asbestos is considered a potential material defect. The requirement to disclose material defects, as outlined in statutes like the South Dakota Codified Law on property condition disclosures, is predicated on actual knowledge. If the property owner and the managing broker have no actual knowledge of the presence of asbestos-containing materials, there is no specific federal or state law that mandates they test for it or proactively disclose its mere possibility before leasing a residential unit. While a broker’s suspicion might warrant recommending an inspection to the owner to mitigate liability, the legal obligation to disclose to a tenant is triggered only by confirmed knowledge. Therefore, the broker must complete the mandatory lead disclosure process due to the building’s age, but the duty concerning asbestos only arises if its presence is a known fact.

The correct answer is derived from understanding the distinct and separate functions of the government-sponsored enterprises, Fannie Mae and Freddie Mac, versus the government-owned corporation, Ginnie Mae, within the secondary mortgage market. The primary market is where loans are created, for instance, by a lender in South Dakota. The secondary market is where these loans are sold, providing liquidity for primary lenders to make more loans. Fannie Mae and Freddie Mac primarily operate by purchasing conforming conventional loans from primary lenders. These are loans that are not insured or guaranteed by a federal government agency. After purchasing these loans, Fannie Mae and Freddie Mac bundle them into financial instruments called mortgage-backed securities (MBS) and guarantee the timely payment of principal and interest on them. Conversely, the Government National Mortgage Association (Ginnie Mae) operates differently. It does not buy or sell loans, nor does it issue mortgage-backed securities. Its role is to guarantee the timely payment of principal and interest on MBS that are issued by private lenders (like banks or mortgage companies) and backed exclusively by pools of government-backed loans. These underlying loans are those insured by the Federal Housing Administration (FHA), guaranteed by the Department of Veterans Affairs (VA), or guaranteed by the Rural Housing Service (RHS) of the U.S. Department of Agriculture. Ginnie Mae’s guarantee is backed by the full faith and credit of the United States government, making these securities extremely safe for investors. Therefore, for a mixed pool of loans, the conventional portion would be eligible for sale to Fannie Mae or Freddie Mac, while the government-backed portion (FHA/VA) would be pooled by an issuer to create Ginnie Mae-guaranteed securities.

The core of this scenario revolves around the specific procedures mandated by South Dakota law for converting a tax sale certificate into a tax deed. When a property’s taxes become delinquent, the county treasurer can sell the tax lien at a public auction. The winning bidder receives a tax certificate, not the property title itself. The original property owner retains the right of redemption. Under South Dakota Codified Law (SDCL) 10-25-1, the standard redemption period for real property is three years from the date of the tax sale. For an owner-occupied single-family dwelling, this period is extended to four years. Since the property in the scenario is a non-owner-occupied commercial building, the three-year redemption period applies. The holder of the tax certificate cannot simply take possession or receive a deed once this period expires. They must take a specific affirmative step. According to SDCL 10-25-2, the certificate holder must serve a “Notice of Intention to Take Tax Deed” upon the owner of record and the person in possession of the property. This notice must be served at least ninety days before the tax deed can be issued by the county treasurer. Therefore, the certificate holder’s correct course of action is to wait until the three-year redemption period is nearing its conclusion, serve the legally required ninety-day notice, and then, after the full redemption period has expired and the notice period has been satisfied, apply to the county treasurer for the tax deed.

The core of this issue lies in the fundamental differences between the types of title assurance available in South Dakota. An abstract of title is a condensed history of the public records affecting a property. The abstractor’s role is to accurately search and summarize these records. An attorney’s opinion of title is a legal professional’s analysis of the abstract, rendering an opinion on whether the title is marketable based on the provided record. Neither the abstractor nor the attorney guarantees the title against defects that are not discoverable from a competent review of the public records. Their liability is limited to negligence in the performance of their duties. An unrecorded defect, such as a claim from a previously unknown heir based on an unprobated will, is a classic example of an “off-record” risk. Since this defect would not appear in the public record, the abstractor would not find it, and the attorney would have no basis to identify it in their review. Therefore, neither party was negligent, and the buyer has no recourse against them. In contrast, an owner’s title insurance policy is a contract of indemnity. It insures the policyholder against financial loss from a covered title defect, including many off-record risks like forgery, fraud, and undisclosed heirs. By declining this coverage, the buyer assumed the risk of such hidden defects. The buyer’s title is now clouded, and she must bear the cost of defending against the heir’s claim and any potential loss in property value or ownership.

An exclusive right-to-sell listing agreement is a bilateral contract, meaning it creates obligations for both the seller and the broker. A seller cannot unilaterally terminate such an agreement before its expiration date without cause, and doing so constitutes a breach of contract. While the seller’s notice may end their agency relationship with the broker, it does not extinguish the broker’s contractual rights to compensation. The broker protection clause, also referred to as a safety or extender clause, is specifically designed for situations like this. This clause protects the broker’s commission if the property is sold within a specified period after the listing agreement ends to a buyer whom the broker introduced to the property during the listing term. In this scenario, the broker procured the buyer who ultimately purchased the property. The seller’s attempt to terminate the agreement was a breach. The subsequent sale to a buyer identified and shown the property by the broker’s firm falls squarely within the terms of the broker protection clause. The seller’s action of terminating the agreement and then selling to a buyer procured by the broker is precisely what the protection clause is meant to prevent. Therefore, the broker has a strong legal basis to claim the full commission as stipulated in the listing agreement, as they fulfilled their end of the bargain by finding a ready, willing, and able buyer who ultimately purchased the property under terms agreeable to the seller. The seller’s breach does not void their obligation to pay the earned commission.

The core of this issue lies in the intersection of South Dakota Administrative Rule (ARSD) 20:69:06:06, which governs notice of Errors and Omissions (E&O) insurance coverage, and a broker’s overarching fiduciary duties. ARSD 20:69:06:06 specifically mandates that a licensee must provide written notice to a client at the time the licensee is first retained if the licensee does not have E&O insurance. In this scenario, while the broker’s policy is technically active at the precise moment of the initial meeting and signing, there is a known, certain, and immediate future lapse in this mandatory coverage. A broker’s fiduciary duty of disclosure requires revealing all material facts that could influence a client’s decision. An impending gap in professional liability insurance is undoubtedly a material fact. The client is retaining the broker for services that will extend into the period of non-coverage. Therefore, the spirit of the law and the broker’s professional obligations compel disclosure before the client is bound by the listing agreement. Simply waiting for the policy to lapse and then providing notice would be a violation, as the client was retained under the pretense of continuous coverage. The most compliant and ethical action is to provide clear, written notice of the impending lapse before the agreement is executed, allowing the client to provide informed consent.

The correct answer is derived by analyzing the requirements of the Uniform Standards of Professional Appraisal Practice (USPAP), which are incorporated into South Dakota law. USPAP Standards Rule 2-2 outlines the content requirements for an Appraisal Report. Specifically, SR 2-2(a)(iii) requires the report to state the intended use of the appraisal, and SR 2-2(a)(iv) requires the identification of the client and any other intended users. The failure to clearly define the intended use and users is a fundamental flaw. An appraisal’s value conclusion is only meaningful within the context for which it was developed. Without a stated intended use, such as for a mortgage lending decision, and a clearly identified intended user, like the specific lending institution, the report lacks the necessary context for its conclusions to be considered credible or reliable for any purpose. The other described situations are not necessarily violations. Using fewer than three comparable sales is permissible if the appraiser provides a credible justification. A difference between the effective date and the inspection date is also acceptable, particularly in retrospective appraisals, as long as it is disclosed and explained. Finally, using an extraordinary assumption regarding an unverified element like mineral rights is not a violation; it is the correct and required procedure under USPAP to deal with uncertainty, thereby protecting all parties by clearly stating the limitations of the analysis. Therefore, the most critical violation is the omission of the intended use and user identification. Under the Uniform Standards of Professional Appraisal Practice, which govern appraisal activities in South Dakota, an appraisal report must contain several critical elements to ensure its credibility and prevent misuse. Among the most foundational of these is the clear and conspicuous statement of both the intended use of the appraisal and the identity of the client and any other intended users. This requirement is not a mere formality. The entire appraisal process, including the scope of work, the definition of value applied, and the final value opinion, is developed specifically for that stated purpose and for those identified parties. For instance, an appraisal intended for a mortgage lender has a different context and may require a different scope of work than one intended for estate tax purposes or a marital dissolution. By failing to specify the intended use and users, the appraiser creates a report that is fundamentally ambiguous. Its conclusions cannot be reliably applied by anyone because the context is missing. This omission is a significant violation of USPAP and undermines the very purpose of the appraisal, making its conclusions potentially misleading and unreliable for the lender’s decision-making process. Other aspects, such as the number of comparables or the use of extraordinary assumptions, are subject to the appraiser’s professional judgment and must be explained and supported, but they do not represent the same level of foundational error as omitting the report’s core purpose and audience.

The core task is to determine the most professional and competent way to analyze flawed or challenging market data to create a Comparative Market Analysis (CMA). The broker’s primary duty is to provide a well-reasoned opinion of value to guide the client, exercising diligence and competence as required by South Dakota real estate law. First, the nine-month-old sale must be addressed. While it is a closed, arm’s-length transaction, its age is a significant drawback. More importantly, a major economic event—the announcement of a large employer’s expansion—has occurred since the sale. This event fundamentally alters market conditions, likely increasing demand and property values. Therefore, this comparable, while useful as a baseline, cannot be used without a substantial upward adjustment to account for the market’s appreciation over time and the impact of the new economic development. It must be weighted carefully. Second, the active listing is not a sale; it is competition. It represents what a seller hopes to get, not what the market has agreed to pay. Using it as a primary indicator of value is a serious error. Its main utility is in strategic positioning, helping the seller decide how to price their property relative to other homes currently available to buyers. It indicates the upper boundary of the current market but is not a confirmed value. Third, the foreclosure sale is a distressed sale, meaning it was not a typical transaction between a willing buyer and a willing seller under normal market conditions. Foreclosures often sell for significantly less than their market value due to the lender’s motivation for a quick sale and often, the property’s condition. Including this data point without heavy qualification, or worse, averaging it with other sales, would inaccurately skew the final value estimate downward. It should be largely discounted or only used to establish the absolute floor of potential value, and its nature as a distressed sale must be clearly disclosed. The most sound professional approach synthesizes these points. The broker should rely on the older sale as the most solid, albeit dated, piece of evidence, applying a significant, well-documented adjustment for the change in market conditions. The active listing informs competitive strategy, and the foreclosure is mostly disregarded as an outlier. This demonstrates a nuanced understanding of market data rather than a simplistic or mechanical application of numbers.

Logical Derivation: 1. Identify the controlling South Dakota Administrative Rule: ARSD 20:73:04:02, “Records to be maintained.” 2. State the core requirement of the rule: A responsible broker must preserve all records relating to any real estate transaction for a minimum period of seven years after the consummation of that transaction. 3. Analyze the broker’s action: The broker’s plan is to purge and destroy all transaction files for properties that closed more than five years ago. 4. Conclusion: This action directly violates the seven-year minimum retention period mandated by ARSD 20:73:04:02. The destruction of records at the five-year mark, rather than the required seven-year mark, is a clear compliance failure. South Dakota Real Estate Commission rules are very specific regarding the maintenance and retention of records to ensure consumer protection and to allow for regulatory oversight. The primary rule governing this is ARSD 20:73:04:02. This regulation mandates that a responsible broker must keep and preserve all records pertaining to a real estate transaction for a period of no less than seven years after the transaction has been consummated. Consummation refers to the closing of the transaction. These records are comprehensive and include, but are not limited to, trust account records, listing and buyer representation agreements, purchase agreements, correspondence, and closing statements. The format of the records can be physical or electronic, but they must be complete, accurate, and readily accessible for inspection by the commission. The duty to maintain these records for the full seven-year term persists even if the brokerage ceases operations or the broker retires. Therefore, a plan to destroy any of these essential transaction records before the seven-year period has elapsed constitutes a direct violation of the administrative rules and can subject the broker to disciplinary action.

This scenario does not require mathematical calculation. The solution is based on the interpretation of South Dakota real estate law and regulations governing professional conduct. According to South Dakota Codified Law 36-21A-71, the Real Estate Commission has the power to suspend or revoke a license for specific acts of unprofessional conduct. One such explicitly listed act is placing a sign on any property offering it for sale or rent without the written consent of the owner or the owner’s authorized agent. In the modern context, a targeted social media post that describes a specific property in detail and suggests the broker has special access or information functions as a form of advertising, akin to a virtual sign. By creating a public post that clearly points to a specific property and claiming to have “exclusive insights,” the broker is advertising that property without a written listing agreement, which is a direct violation. While failing to disclose a conflict of interest, such as recommending a relative for paid work, is also a serious ethical breach and a violation of fiduciary duties of loyalty and disclosure, the act of advertising property without authority is a specifically enumerated offense in the statute. Similarly, providing advice without a formal agreement can create problematic implied agency relationships, but it is the public advertisement of the property that constitutes the most direct and unambiguous statutory violation described in this scenario. The broker’s actions created a public perception of agency and an offer to deal on a property for which he had no legal authority to market.

For an income-producing property such as the mixed-use building described, the income approach is the most pertinent and reliable method for determining value in the final reconciliation. The fundamental principle is that the value of an investment property is directly related to the income it is expected to generate. A prospective buyer for this type of property is typically an investor whose primary concern is the return on investment, which is best measured by analyzing the property’s net operating income and applying an appropriate capitalization rate derived from the market. The sales comparison approach, while important, is less reliable in this specific case due to the scarcity of directly comparable mixed-use properties. When an appraiser must make significant and numerous adjustments to the sale prices of comparable properties, the final value conclusion becomes less objective and more dependent on the appraiser’s subjective judgment, thus reducing its reliability. The cost approach is generally considered the least reliable method for an older building. The difficulty lies in accurately estimating accrued depreciation. For a 50-year-old structure, calculating the loss in value from physical deterioration, functional obsolescence (e.g., outdated floor plans, insufficient amenities), and external obsolescence (e.g., changes in the neighborhood) is a highly complex and speculative process. This makes the resulting value indication less credible than one derived from the property’s actual economic performance. Therefore, in the reconciliation process, an appraiser would logically place the most weight on the approach that best reflects the motivations and analysis of a typical buyer for that property type.

The legal analysis centers on the application of Title III of the Americans with Disabilities Act (ADA) to an existing commercial building that qualifies as a “public accommodation.” The building, constructed in the 1970s, predates the ADA’s enactment. However, there is no “grandfather clause” that exempts older buildings entirely. Instead, the ADA imposes a continuing obligation on owners and operators of public accommodations to remove architectural barriers in existing facilities when it is “readily achievable” to do so. “Readily achievable” is defined as easily accomplishable and able to be carried out without much difficulty or expense. This is a flexible, case-by-case determination that considers factors like the nature and cost of the action, the overall financial resources of the property owner, and the type of operation. In this scenario, the landlord must evaluate whether removing the entrance steps, for example by installing a ramp, is readily achievable. This is a separate obligation from modifications needed solely for the tenant’s specific business within the leased premises. The landlord and tenant would typically negotiate the costs for modifications inside the bookstore space, but the landlord retains the primary responsibility for barrier removal in common areas serving all tenants and the public, subject to the readily achievable standard. Therefore, the broker’s most accurate counsel is that the landlord must analyze and perform readily achievable barrier removal for common areas.

The calculation to determine the financial outcome for the month is as follows: First, calculate the management fee based on the gross rent collected: \[\$1,500 \text{ (Rent)} \times 0.08 \text{ (Management Fee Rate)} = \$120 \text{ (Management Fee)}\] Next, calculate the total disbursements for the month by adding the management fee and the repair cost: \[\$120 \text{ (Management Fee)} + \$2,800 \text{ (Furnace Repair)} = \$2,920 \text{ (Total Disbursements)}\] Finally, determine the net cash flow and the required draw from the reserve fund by subtracting total disbursements from the rent received: \[\$1,500 \text{ (Rent)} – \$2,920 \text{ (Total Disbursements)} = -\$1,420 \text{ (Net Shortfall)}\] This negative result indicates that \$1,420 must be drawn from the owner’s reserve funds held in the trust account to cover the expenses. Under South Dakota Administrative Rule 20:73:07:01, a broker engaged in property management must provide the property owner with a detailed financial statement on a monthly basis. This statement must show all receipts and disbursements for the property. The core principle is transparency and full accountability for all funds handled by the broker on behalf of the owner. In this scenario, simply reporting a net loss or bundling expenses together would be a violation of this rule. The owner has the right to see a clear, itemized breakdown of all financial activity. The report must start with the gross income, which is the rent collected. Then, each expense must be listed as a separate line item. This includes the broker’s own management fee as well as any third-party payments for maintenance or repairs, such as the furnace replacement. When expenses exceed income for a given period, the report must clearly show how the deficit was covered, which in this case is a draw from the reserve fund established for the property. This level of detail ensures the owner can track all financial movements and verify that funds are being managed according to the management agreement and state law, upholding the broker’s fiduciary duty of accounting.

Step 1: Identify the legal instrument in question. The document is a handwritten statement by the property owner, intending to transfer the property upon death. This is a potential will. Step 2: Analyze the document against South Dakota will requirements. Under South Dakota Codified Law (SDCL) 29A-2-502, a standard will must be in writing, signed by the testator, and signed by at least two witnesses. Step 3: Identify the relevant exception in South Dakota law. SDCL 29A-2-502(b) provides an exception for holographic wills. A will that does not comply with the witness requirement is valid as a holographic will, whether or not witnessed, if the signature and material portions of the document are in the testator’s handwriting. The scenario describes such a document. Step 4: Determine the process for title transfer via a will. Even if a will is valid, title does not transfer to the beneficiary (devisee) automatically upon the testator’s death. The will must be submitted to a court and formally validated through the probate process. Step 5: Conclude the outcome. The holographic will is likely valid under South Dakota law. Therefore, the property will not pass via intestate succession. The transfer to the named beneficiary will occur, but only after the will is admitted to probate and the court authorizes the personal representative to execute a deed of distribution. In South Dakota, the transfer of real property upon an owner’s death is governed by the terms of a valid will or by the laws of intestate succession if no valid will exists. A will is a legal document that directs the disposition of a person’s estate. While the standard formal will requires the signatures of two witnesses, South Dakota law specifically recognizes the validity of holographic wills. A holographic will is one written entirely in the testator’s own handwriting and signed by them. The key element is that the material provisions and the signature must be in the testator’s hand; witnesses are not required for its validity. When a property owner dies having left a valid will, the property is said to be transferred by devise. However, this transfer is not instantaneous. The will must be presented to the appropriate circuit court for probate. The probate process serves to prove the will’s validity, appoint a personal representative to manage the estate, pay any outstanding debts and taxes, and ultimately distribute the remaining assets, including real property, to the designated beneficiaries or devisees. The legal title is officially conveyed to the devisee through a Personal Representative’s Deed, which is then recorded to provide clear and marketable title.

The core of this issue rests on a South Dakota real estate licensee’s affirmative duty to disclose known adverse material facts, as mandated by state law, specifically SDCL 36-21A-131. An adverse material fact is any information that could significantly impact the value of the property or a party’s decision to enter into a contract. In this scenario, the history of significant hail damage and a subsequent “patch job” instead of a full replacement constitutes a known adverse material fact. The broker, Amelia, has actual knowledge of this fact directly from the seller. Her primary duty is not to her client’s confidentiality in this instance, but to the legal requirement of disclosure. The correct procedure is a two-step process. First, she must counsel her client, the seller, on their legal obligation to provide accurate and complete information on the Seller’s Property Condition Disclosure Statement (SPCDS) and advise them to amend the document. If the seller refuses to make the proper disclosure, the broker’s duty is not extinguished. She must then personally ensure the adverse material fact is disclosed to the prospective buyer or the buyer’s agent. Simply recommending an inspection does not fulfill her legal duty to disclose what she already knows. The duty to disclose is an active, not a passive, responsibility.

Step 1: Analyze the specific language used in the deed. The deed conveys the property to the siblings “as joint owners.” Step 2: Apply the relevant South Dakota statutes governing co-ownership. South Dakota Codified Law (SDCL) 43-2-11 establishes a presumption that a grant to multiple owners creates a tenancy in common, unless an interest in partnership or a joint tenancy is explicitly declared. Step 3: Evaluate if the language “as joint owners” satisfies the requirement for creating a joint tenancy under SDCL 43-2-12. This statute requires that a joint tenancy be “expressly declared” in the grant. South Dakota courts interpret this requirement strictly. The mere use of the word “jointly” or “joint owners” is generally considered insufficient to overcome the presumption of a tenancy in common. To create the right of survivorship, the deed must contain clear, unambiguous language, such as “as joint tenants with right of survivorship” or similar express terms. Step 4: Conclude the form of ownership created. Due to the lack of express language creating a right of survivorship, the conveyance resulted in a tenancy in common. Step 5: Determine the disposition of the deceased co-tenant’s interest. In a tenancy in common, each owner holds a distinct, undivided interest that is inheritable. There is no automatic right of survivorship for the other co-tenants. Therefore, upon Anke’s death, her one-third interest in the property does not pass to Bjorn and Casper. Instead, it becomes part of her estate and is transferred according to the terms of her will. Step 6: Final determination. Anke’s will devises her property to her daughter, Freja. Consequently, Freja inherits Anke’s one-third interest and becomes a tenant in common with her uncles, Bjorn and Casper. In South Dakota, the creation of a joint tenancy is not taken lightly and requires precise legal language in the conveying instrument. The law defaults to a tenancy in common to protect a co-owner’s right to dispose of their property interest via a will or inheritance. This form of ownership allows for separate, fractional interests which can be transferred independently. The defining characteristic of a joint tenancy is the right of survivorship, where a deceased joint tenant’s interest is automatically absorbed by the surviving joint tenants, bypassing the probate process. To establish this right, the four unities of time, title, interest, and possession must be present, and more importantly, the deed must explicitly state the intention to create a joint tenancy. Ambiguous phrasing like “joint owners” fails to meet this high standard, leading the courts to rule that a tenancy in common was created. Therefore, the deceased’s share is treated as part of their personal estate, subject to distribution to their designated heirs or devisees.

The logical determination of the correct answer proceeds as follows. First, we must analyze the core elements of eminent domain under South Dakota law. The state constitution and South Dakota Codified Laws (SDCL) permit the taking of private property for a “public use” upon payment of “just compensation.” The scenario involves a public utility cooperative, an entity generally granted condemnation authority, seeking an easement for a transmission line, which is a recognized public use. However, the analysis cannot stop there. We must consider the specific statutory limitations South Dakota has imposed on this power. Following the U.S. Supreme Court’s decision in Kelo v. City of New London, South Dakota enacted specific legislation to curb the use of eminent domain for private benefit. Specifically, SDCL 21-35-22 explicitly prohibits the use of eminent domain to transfer private property to any private person, nongovernmental entity, or other public-private entity, with very limited exceptions. The utility’s plan to lease a portion of the condemned property to a private telecommunications company for its separate commercial enterprise falls directly within this prohibition. The core legal vulnerability is not the primary purpose of the taking (the power line), but the secondary transfer of a property right (the lease) to a private entity for its own profit. Therefore, the most potent legal challenge is based on the violation of this specific statutory restriction against using condemned property for private commercial benefit.

The legal outcome is determined by applying South Dakota Codified Law 43-32-14. The original lease was for a fixed term of one year. The tenant, Kalani, remained in possession after the lease expired. The landlord, Mr. Gable, accepted a full month’s rent from Kalani for the month immediately following the expiration. According to SDCL 43-32-14, when 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. Since the original lease term was one year, the law presumes the lease has been renewed for another full year under the exact same conditions as the original agreement. The landlord’s acceptance of rent is the critical action that triggers this statutory presumption. It does not automatically convert to a month-to-month tenancy, which is a common misconception. A month-to-month tenancy would typically arise if the original lease was month-to-month or if there was a specific agreement to that effect. The tenancy is also not terminated, as the acceptance of rent negates any claim of unlawful detainer or trespassing. The broker’s advice must reflect this specific South Dakota statute to protect the landlord from being unintentionally bound to a new year-long lease.

The correct course of action is determined by the broker’s duties under South Dakota law, specifically regarding the disclosure of adverse material facts. South Dakota Codified Law (SDCL) 36-21A-78 outlines the duties a licensee owes to a customer, which includes the obligation to disclose all known adverse material facts. An adverse material fact, as defined in SDCL 36-21A-6, is a fact that could significantly impact the property’s value, structural integrity, or present a health risk, or a fact that would change the party’s decision to enter into the contract. In this scenario, a significant, visible horizontal crack in a foundation wall, regardless of the seller’s opinion, constitutes a potential adverse material fact that the broker now has knowledge of. The seller’s completion of the Seller’s Property Condition Disclosure Statement (mandated by SDCL 43-4-38) does not absolve the broker of their independent duty. A broker cannot knowingly conceal a patent defect or a known adverse material fact, even if the seller fails to disclose it. The broker’s responsibility is to ensure transparency and fair dealing. While advising the seller to get an expert opinion is a good practice, the primary legal duty is the disclosure of the known fact to potential buyers. The broker’s duty is not contingent on a third party report; it is triggered by the broker’s own knowledge.

Under South Dakota Administrative Rule 20:69:06:03.01, the South Dakota Real Estate Commission has the discretion to accept continuing education hours from courses taken in and approved by another state’s real estate licensing authority. However, this acceptance is not automatic. A critical condition is that the subject matter of the out-of-state course must be deemed substantially equivalent to the subject matter considered appropriate for continuing education for South Dakota licensees. The commission evaluates the course content for its relevance and applicability to real estate practice within South Dakota. A course that is highly specific to the laws, regulations, or unique market conditions of another state, such as a course focused exclusively on Wyoming’s specific water rights and mineral laws, would likely not meet this standard. The content lacks direct applicability and relevance for a practitioner whose duties and legal obligations are governed by South Dakota statutes and market practices. Therefore, even if the course is fully accredited in the other state, the commission is likely to deny the credit for a South Dakota license renewal because the core educational content does not serve the purpose of enhancing competency for practice within South Dakota. The decision hinges on the relevance of the subject matter, not merely the location or accreditation status of the course.

The correct course of action is determined by the provisions of the Equal Credit Opportunity Act (ECOA). ECOA, a federal law, makes it illegal for any creditor to discriminate against a credit applicant on the basis of race, color, religion, national origin, sex, marital status, or age, or because the applicant receives income from a public assistance program. A critical aspect of ECOA is its prohibition on asking certain types of questions during the application process. Specifically, a lender may not ask about an applicant’s marital status in most situations, nor may they inquire about childbearing intentions or family planning. While a lender can ask about the number and ages of dependents to estimate expenses, they cannot use this information to discriminate. Inquiring about future family plans is considered a form of discrimination based on sex and marital status because it presumes a potential change in employment or income, particularly for female applicants. A creditor must evaluate an applicant based on their current financial situation and creditworthiness, not on assumptions about future life events. A supervising broker in South Dakota has a duty to ensure that all affiliated licensees, and any third parties they work closely with like mortgage loan originators, comply with federal and state fair housing and credit laws. Upon discovering a potential ECOA violation, the broker’s primary responsibility is to take corrective action to stop the prohibited practice and ensure compliance, thereby protecting the client, the brokerage, and the public from discriminatory practices.

The situation described involves illegal housing discrimination under South Dakota law. The South Dakota Human Relations Act, codified in SDCL 20-13, provides protections that are more extensive than the Federal Fair Housing Act. While both federal and state laws prohibit discrimination based on religion, South Dakota law specifically adds “creed” as a protected class. “Creed” is interpreted more broadly than “religion” and encompasses a person’s fundamental beliefs, principles, or a system of beliefs, which may be philosophical or ethical in nature and not necessarily theistic. Secular Humanism, as a formal philosophical life stance, falls squarely under the protection of “creed.” Therefore, a property owner’s refusal to rent to an individual based on their identification as a Secular Humanist constitutes illegal discrimination. A licensed real estate broker has an absolute ethical and legal obligation to uphold all fair housing laws. When a client, such as a landlord, provides an instruction that is discriminatory and illegal, the broker must not comply. The broker’s primary duty is to the law. The correct professional conduct is to inform the client that their instruction is illegal and refuse to carry it out. If the client insists on proceeding with the discriminatory action, the broker must terminate the agency relationship to avoid participating in an illegal act and facing potential license revocation, civil penalties, and damages.

The logical determination of liability proceeds as follows: First, the advertising practice is assessed against South Dakota’s specific rules. Administrative Rule of South Dakota (ARSD) 20:73:04:02 mandates that all advertising by a licensee must be conducted under the direct supervision of a responsible broker and must prominently and clearly state the name of the licensed real estate company. The scenario describes advertising where the team name, “The Badlands Group,” overshadows the brokerage name, “Prairie Realty,” which only appears in fine print. This constitutes misleading advertising because it does not clearly identify the brokerage. Second, the responsibility for this violation is assigned. While the broker associate, Leo, is directly responsible for the content, the analysis must extend to his supervisor. Third, the duties of the responsible broker are examined under South Dakota Codified Law (SDCL) 36-21A. Specifically, SDCL 36-21A-71(12) establishes that a responsible broker can face disciplinary action for “Failing to exercise reasonable supervision over the activities of licensees and any unlicensed staff.” The law does not require the responsible broker to have direct knowledge of or personally approve every single advertisement. Instead, it imposes a general duty to have systems and oversight in place to ensure all licensees comply with state laws and regulations. The failure of such a system, evidenced by the non-compliant advertising, is a breach of this supervisory duty. Therefore, the responsible broker, Amelia, is liable for disciplinary action due to her failure to adequately supervise the advertising activities of a licensee under her authority. In South Dakota, a responsible broker’s duties are significant and extend beyond their personal transactions. They are ultimately accountable for the actions of all broker associates and salespersons licensed under them. This principle of vicarious liability is central to the state’s regulatory framework, designed to protect the public. The South Dakota Real Estate Commission expects responsible brokers to actively oversee all brokerage activities, including advertising, trust account management, and contract preparation. A broker cannot use ignorance of a specific action by an associate as a defense. The expectation is that the broker has established clear policies, provides regular training, and conducts periodic reviews to ensure compliance. In the context of advertising, this means reviewing marketing materials or having a clear policy that all advertising must display the brokerage name with a specified level of prominence. A violation by an associate is often viewed as a symptom of a failure in the broker’s supervisory system, making the broker subject to penalties ranging from a letter of reprimand to license suspension or revocation, depending on the severity and history of violations.

The core principle governing this situation is found in South Dakota Codified Law 36-21A-46 and the Administrative Rules of South Dakota 20:69:05:01. These regulations establish that a responsible broker is unequivocally accountable for the real estate activities of all licensees affiliated with their brokerage. This duty of supervision is absolute and cannot be waived or diminished based on the experience level, sales volume, or independent contractor status of an associated licensee. The law does not provide for a tiered system of supervision where senior or more experienced associates are exempt from the responsible broker’s oversight. While a broker can implement various management techniques and delegate tasks, the ultimate legal responsibility for the actions of every single associate remains with the responsible broker. Creating a policy that exempts certain individuals from fundamental supervisory procedures, such as contract review, is a direct failure to provide the adequate supervision required by law. Therefore, in the event of a complaint arising from an error made by an associate, the South Dakota Real Estate Commission will hold the responsible broker accountable for the supervisory lapse, regardless of any internal policy that attempts to justify reduced oversight for experienced agents. The policy itself demonstrates a misunderstanding or disregard for the non-delegable nature of the responsible broker’s duties.

The valuation of large agricultural parcels, particularly ranch land in semi-arid regions like western South Dakota, relies on adjustments that reflect the land’s productivity and utility. The single most critical factor determining the carrying capacity of ranch land is the availability and reliability of year-round water for livestock. While factors like fencing, soil quality, and location are important and require adjustments, their impact is secondary to water. A property lacking a dependable water source, such as a well or a substantial stock dam, cannot support a herd through dry seasons, rendering its acreage far less valuable. In a comparative market analysis, a comparable property’s water situation must be heavily scrutinized. An adjustment for inadequate water is not a minor, linear calculation; it is a substantial, often overriding, consideration that can drastically alter the per-acre value. For instance, an adjustment for fencing might be in the range of \(5\%\) to \(10\%\) of the property value, whereas an adjustment for the absence of a reliable water source could easily necessitate a negative adjustment of \(30\%\) to \(50\%\) or more, depending on the severity of the deficiency. This is because water directly dictates the income-producing potential of the land, which is the fundamental basis of its market value. Therefore, when reconciling comparables with varying water sources, the adjustment for this feature will be the most significant and requires the most rigorous justification.