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South Dakota · Earnest moneySouth Dakota earnest money: deposit by the next banking day and release if the deal fails

In South Dakota a responsible broker must remit immediately to the principal all money it receives that belongs to the principal, unless a written employment contract authorizes the broker to hold the money until final settlement of the transaction. In that case the broker deposits the money in a special trust account at a federally insured financial institution on the first legal banking day after the contract is accepted, reconciles the account to the bank statements, trust ledger and check register at least monthly, and may use the money only in connection with the transaction as the principal authorizes (SDCL 36-21A-80). If an accepted offer and purchase agreement doesn't close, the broker may not disburse any trust funds for that transaction except on the written instruction of all parties or a court order (SDCL 36-21A-81).

What the statutes set

  1. Deposit (36-21A-80)

    Special trust account, first legal banking day after acceptance.

  2. Use (36-21A-80)

    Only for the transaction, as the principal authorizes; reconciled monthly.

  3. Failed deal (36-21A-81)

    Released only on all parties' written instruction or a court order.

What the TC does with South Dakota earnest money

  • Get the deposit receipt from the broker holding the earnest money and add the deposit date to the timeline.
  • If the deal terminates, collect the release signed by buyer and seller before asking for a refund.
  • Keep any disputed deposit with the broker until both parties sign or a court orders release.

Questions about South Dakota earnest money

When must a South Dakota broker deposit earnest money?

On the first legal banking day after the contract is accepted, in a federally insured special trust account (SDCL 36-21A-80).

Who releases South Dakota earnest money when a deal doesn't close?

All parties by written instruction, or a court order (SDCL 36-21A-81).

Related guides

Track the earnest money deposit and any release as tasks on the deal in ClosingCode.

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Sources: SDCL 36-21A-80, 36-21A-81 (sdlegislature.gov), read October 31, 2026.

General information, not legal advice. ClosingCode is software; it is not a law firm or brokerage. This guide is not a substitute for the advice or services of an attorney.