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Nobody licenses the person who runs your South Dakota association

South Dakota · Regulation

Nobody licenses the person who runs your South Dakota association

South Dakota does license property managers, and the licence is mandatory. What it does not clearly cover is running a homeowners association.

The licence exists and has teeth. ARSD 20:69:14:01 makes it a restricted broker's licence under SDCL 36-21A-47, and ARSD 20:69:14:02 provides: “A person may not act as a property manager in this state unless the person holds a property manager license pursuant to this chapter or otherwise complies with the provisions of this chapter. Individuals must be licensed as individual property managers. Partnerships, associations, or corporations must be licensed as firms.”1

But the definition is about rentals

SDCL 36-21A-10 defines the role:

“a property manager is any person who for a fee, commission or other valuable consideration . . . negotiates or attempts to negotiate the rental, exchange or leasing of any real estate or of the improvements on it; lists real estate exchanges, rentals or leases; collects rents or attempts to collect rents for real estate . . .”2

Rentals, leases, rent collection. Collecting assessments from members, running board meetings, enforcing covenants, preparing a budget and administering reserves appear nowhere in it. Those are the things a community association manager does, and they are not rent.

A broader provision sits nearby: SDCL 36-21A-6(1) reaches anyone who “for another and for compensation . . . manages . . . an interest in real property.” Whether that captures association management is the open question, and nothing in the statutes or the rules answers it.

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The exemption list is the strongest evidence

SDCL 36-21A-29 lists eleven categories to which the chapter does not apply. Read in full, it covers: bona fide owners and lessors and their regular employees; public officers; cemetery operators selling burial plots; receivers, trustees, personal representatives and guardians; building custodians and janitors who show residential units; owners, managers and employees of a business holding a lodging licence; South Dakota-admitted attorneys; banks, credit unions, trust companies, savings and loan associations, public utilities and farm loan associations; publishers of real estate listings; holders of a duly executed power of attorney where the acts are not recurrent; and employees of any of the foregoing whose principal duties lie elsewhere.3

Community association managers are not among them. The section was last amended in 2023.

That absence cuts in an uncomfortable direction. If association management were plainly outside the chapter, no exemption would be needed. If it were plainly inside, one might expect an exemption or a tailored licence category. South Dakota has neither, and the result is a role of real financial responsibility sitting in an unmarked space.

The consequence if the licence is required

SDCL 36-21A-88 is the provision that makes this more than academic:

“No action or suit may be instituted, nor recovery be had, in any court of this state by a person for compensation for an act done or service rendered, the doing or rendering of which is prohibited under the provisions of this chapter, to other than persons licensed under this chapter, unless such person was licensed under this chapter at the time of offering to perform the act or service or procuring a promise to contract for the payment of compensation for the contemplated act or service.”

An unlicensed manager who needed a licence cannot sue the association for the fee. That is a defence an association would rather never need, and a risk a manager would rather have resolved.

What a licence brings with it

Where the licence is held, real obligations follow — and they are the obligations an association would want regardless. Forty hours of property-management education within the two years before applying (ARSD 20:69:14:02.01). Broker trust-account rules on client money (20:69:14:04). Records kept in state and open to audit (20:69:14:05). And a written management agreement required before any services are performed (20:69:14:06).

Trust-account rules and auditable in-state records are precisely the protections that matter when a third party holds an association's reserve funds. Our budget approval and reserve studies pages cover what sits behind those accounts.

The Commission has not addressed it

The Real Estate Commission's rules have not been amended since 2023 in any chapter of ARSD article 20:69. The condominium chapter, 20:69:07, carries a last effective date of January 9, 1997.

Nor does enforcement suggest attention to the question. The Commission's most recent newsletter, the Fall 2025 edition, lists three disciplinary actions for the period, all conventional brokerage matters: a $500 fine under SDCL 36-21A-82 over trust-account records, a $500 administrative fee under SDCL 36-21A-79 on a broker's responsibility for affiliated licensees, and one application denial on criminal-history grounds. The same issue lists eighteen newly licensed property managers and thirty-four residential rental agents.4

The licence type is alive and growing. None of the activity around it is community-association regulation.

What it means for a South Dakota association

There is no state credential that certifies competence in association management here. National designations exist and are voluntary. No South Dakota body examines, registers or disciplines a person for how they run an association's finances.

Nor is there anyone to complain to. The Attorney General issues official opinions only on questions of law relating to the official duties of the requesting officer, so a private association cannot ask — and no state agency supervises associations. The contract is the whole of the relationship.

What to watch next

Nothing is pending. No bill in the 2025 or 2026 sessions proposed a community association manager licence, and no rulemaking is underway. The question of whether SDCL 36-21A-6(1)'s “manages an interest in real property” reaches association management would most likely be answered the hard way — in a fee dispute, under SDCL 36-21A-88.

Related South Dakota HOA Topics

← All South Dakota HOA Topics

  1. ARSD ch. 20:69:14, Property Managers — Administrative Rules of South Dakota ↩
  2. SDCL 36-21A-10, property manager defined ↩
  3. SDCL 36-21A-29, Persons and entities exempt from licensure (as amended SL 2023, ch 138, § 4) ↩
  4. South Dakota Real Estate Commission, VIEW newsletter, Fall 2025 edition ↩

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