46th legislature - STATE OF NEW MEXICO - first session, 2003

RELATING TO REAL ESTATE LICENSES; CHANGING CERTAIN PROVISIONS FOR LICENSING; ELIMINATING THE SALESPERSON CATEGORY OF REAL ESTATE LICENSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 61-29-1 NMSA 1978 (being Laws 1959, Chapter 226, Section 1, as amended) is amended to read:

"61-29-1. PROHIBITION.--It is unlawful for a person to engage in the business, act in the capacity of, advertise or display in any manner or otherwise assume to engage in the business of, or act as, a qualifying broker or [real estate salesperson] associate broker within this state without a license issued by the commission. A person who engages in the business or acts in the capacity of a qualifying broker or [real estate salesperson] associate broker in this state, except as otherwise provided in Section 61-29-2 NMSA 1978, with or without a New Mexico license, has thereby submitted to the jurisdiction of the state and to the administrative jurisdiction of the commission and is subject to all penalties and remedies available for a violation of any provision of Chapter 61, Article 29 NMSA 1978."

Section 2. Section 61-29-2 NMSA 1978 (being Laws 1999, Chapter 127, Section 1) is amended to read:

"61-29-2. DEFINITIONS AND EXCEPTIONS.--

A. As used in Chapter 61, Article 29 NMSA 1978:

(1) "agency relationship" or "brokerage relationship" means the legal or [contractural] contractual relationship between a person and a brokerage in a real estate transaction subject to the jurisdiction of the commission;

[(2) "broker" or "qualifying broker" means a person who for compensation or other consideration from another:

(a) lists, sells or offers to sell real estate; buys or offers to buy real estate; or negotiates the purchase, sale or exchange of real estate or options on real estate;

(b) leases, rents or auctions or offers to lease, rent or auction real estate;

(c) advertises or holds himself out as being engaged in the business of buying, selling, exchanging, renting, leasing, auctioning or dealing with options on real estate for others as a whole or partial vocation; or

(d) engages in the business of charging an advance fee or contracting for collection of a fee in connection with a contract under which he undertakes primarily to promote the sale of real estate through its listing in a publication issued primarily for that purpose or for the purpose of referral of information concerning real estate to brokers;]

(2) "associate broker" means a person who for compensation or other consideration is associated with or engaged under contract by a qualifying broker to participate in an activity described in Subparagraphs (a) through (d) of Paragraph (10) of this subsection;

(3) "brokerage" means a licensed qualifying broker, the licensed real estate business represented by the broker and its affiliated licensees;

(4) "client" means a buyer, seller, landlord or tenant who has entered into an express written agreement with a brokerage for real estate services subject to the jurisdiction of the commission;

(5) "commission" means the New Mexico real estate commission [created pursuant to Section 61-29-4 NMSA 1978];

(6) "customer" means a buyer, seller, landlord or tenant who uses real estate services without entering into an express written agreement with a brokerage subject to the jurisdiction of the commission;

(7) "license" means a [real estate] qualifying broker's license or associate broker's license issued by the commission;

(8) "licensee" means [anyone holding] a person who holds a [valid real estate] license [subject to the jurisdiction of the commission];

(9) "nonagent" means a brokerage and its licensees providing real estate services to either clients by means of an express written agreement or to customers without an express written agreement;

(10) "qualifying broker" means a person who:

(a) for compensation or other consideration from another, lists, sells or offers to sell real estate; buys or offers to buy real estate; or negotiates the purchase, sale or exchange of real estate or options on real estate;

(b) for compensation or other consideration from another, leases, rents or auctions or offers to lease, rent or auction real estate;

(c) advertises or holds himself out as being engaged in the business of buying, selling, exchanging, renting, leasing, auctioning or dealing with options on real estate for others as a whole or partial vocation;

(d) engages in the business of charging an advance fee or contracting for collection of a fee in connection with a contract under which he undertakes primarily to promote the sale of real estate through its listing in a publication issued primarily for that purpose or for the purpose of referral of information concerning real estate to brokers;

(e) has been licensed and actively engaged in the real estate business as an associate broker or salesperson for at least two years;

(f) has qualified as an individual proprietorship, corporation, partnership or association to do business as a real estate brokerage in the state of New Mexico, or is a qualifying broker employed by the owner of a real estate business;

(g) is responsible for all activity within a real estate office or branch office;

(h) is responsible for the supervision of any associate broker who is licensed with him transacting real estate business described in this section;

(i) is responsible for trust accounts and trust account records; and

(j) assures compliance with all licensing laws and rules pertaining to office location and advertising; and

[(10)] (11) "real estate" means land, improvements, leaseholds and other interests in real property that are less than a fee simple ownership interest, whether tangible or intangible [and

(11) "real estate salesperson" means a person who for compensation or other valuable consideration is associated with or engaged under contract by a broker to participate in an activity described in Subparagraphs (a) through (d) of Paragraph (2) of this subsection or to carry on the broker's business as a whole or partial vocation].

B. A single act of a person in performing or attempting to perform an activity described in Subparagraphs (a) through [(d)] (j) of Paragraph [(2)] (10) of Subsection A of this section makes the person a qualifying broker. A single act of a person in performing or attempting to perform an activity described in Paragraph [(11)] (2) of Subsection A of this section makes the person [a real estate salesperson] an associate broker.

C. The provisions of Chapter 61, Article 29 NMSA 1978 do not apply to:

(1) a person who as owner or lessor performs any of the activities included in this section with reference to property owned or leased by him, the employees of the owner or lessor or the employees of a broker acting on behalf of the owner or lessor, with respect to the property owned or leased, if the acts are performed in the regular course of or incident to the management of the property and the investments, except [where] when the sale or offering for sale or the lease or offering for lease of the property constitutes a subdivision containing one hundred or more parcels;

(2) isolated or sporadic transactions not exceeding two transactions annually in which a person acts as attorney-in-fact under a duly executed power of attorney delivered by an owner authorizing the person to finally consummate and to perform under any contract the sale, leasing or exchange of real estate on behalf of the owner; and the owner or attorney-in-fact has not used a power of attorney for the purpose of evading the provisions of Chapter 61, Article 29 NMSA 1978;

(3) transactions in which a person acts as attorney-in-fact under a duly executed power of attorney delivered by an owner related to the attorney-in-fact within the fourth degree of consanguinity or closer, authorizing the person to finally consummate and to perform under any contract for the sale, leasing or exchange of real estate on behalf of the owner;

(4) the services rendered by an attorney at law in the performance of his duties as an attorney at law;

(5) a person acting in the capacity of a receiver, trustee in bankruptcy, administrator or executor, a person selling real estate pursuant to an order of any court or a trustee acting under a trust agreement, deed of trust or will or the regular salaried employee of a trustee;

(6) the activities of a salaried employee of a governmental agency acting within the scope of his employment; or

(7) persons who deal exclusively in mineral leases or the sale or purchase of mineral rights or royalties in any case in which the fee to the land or the surface rights are in no way involved in the transaction."

Section 3. Section 61-29-5 NMSA 1978 (being Laws 1959, Chapter 226, Section 4, as amended) is amended to read:

"61-29-5. ORGANIZATION OF COMMISSION.--The commission shall organize by electing a president, vice president and secretary from its members. A majority of the commission shall constitute a quorum and may exercise all powers and duties devolving upon it and do all things necessary to carry into effect the provisions of Chapter 61, Article 29 NMSA 1978. The secretary of the commission shall keep a record of its proceedings, a register of persons licensed as [real estate] qualifying brokers and as [real estate salespersons] associate brokers, showing the name, place of business of each and the date and number of his or her certificate, and a record of all licenses or certificates issued, refused, removed, suspended or revoked. This record shall be open to public inspection at all reasonable times."

Section 4. Section 61-29-8 NMSA 1978 (being Laws 1959, Chapter 226, Section 7, as amended) is amended to read:

"61-29-8. LICENSE FEES--DISPOSITION.--

A. The following fees shall be established and charged by the commission and paid into the real estate commission fund:

(1) for each examination, a fee not to exceed ninety-five dollars ($95.00);

(2) for each qualifying broker's license issued, a fee not to exceed one hundred eighty dollars ($180) and for each renewal thereof, a fee not to exceed one hundred eighty dollars ($180);

(3) for each [salesperson's] associate broker's license issued, a fee not to exceed one hundred eighty dollars ($180) and for each renewal thereof, a fee not to exceed one hundred eighty dollars ($180);

(4) subject to the provisions of Paragraph (10) of this subsection, for each change of place of business or change of employer or contractual associate, a fee not to exceed twenty dollars ($20.00);

(5) for each duplicate license, where the license is lost or destroyed and affidavit is made thereof, a fee not to exceed twenty dollars ($20.00);

(6) for each license history, a fee not to exceed twenty-five dollars ($25.00);

(7) for copying of documents by the commission, a fee not to exceed one dollar ($1.00) per copy;

(8) for each license law and rules and regulations booklet, a fee not to exceed ten dollars ($10.00) per booklet;

(9) for each hard copy or electronic list of [licensed real estate brokers and salespersons] licensees, a fee not to exceed twenty dollars ($20.00); and

(10) when a license must be reissued for [a salesperson] an associate broker because of change of address of the qualifying broker's office, death of the [licensed] qualifying broker when a successor [licensed] qualifying broker is replacing the decedent and the [salesperson] associate broker remains in the office or because of a change of name of the office or the entity of the [licensed] qualifying broker, the [licensed] qualifying broker or successor [licensed] qualifying broker, as the case may be, shall pay to the commission as the affected [salesperson's] associate broker's license reissue fee an amount not to exceed twenty dollars ($20.00); but if there are eleven or more affected [salespersons] associate brokers in the [licensed] qualifying broker's office, the total fee paid to effect reissuance of all of those licenses shall not exceed two hundred dollars ($200).

B. All fees set by the commission shall be set by rule and only after all requirements have been met as prescribed by Chapter 61, Article 29 NMSA 1978. Any changes or amendments to the rules shall be filed in accordance with the provisions of the State Rules Act.

C. The commission shall deposit all money received by it from fees in accordance with the provisions of Chapter 61, Article 29 NMSA 1978 with the state treasurer, who shall keep that money in a separate fund to be known as the "real estate commission fund", and money so deposited in that fund is appropriated for the purpose of carrying out the provisions of Chapter 61, Article 29 NMSA 1978 or to maintain the real estate recovery fund as required by the Real Estate Recovery Fund Act and shall be paid out of the real estate commission fund upon the vouchers of the executive secretary of the commission or his designee; provided that the total fees and charges collected and paid into the state treasury and any money so deposited shall be expended only for the purposes authorized by Chapter 61, Article 29 NMSA 1978.

D. The commission shall by rule provide for a proportionate refund of the license issuance fee or the license renewal fee if the license is issued or renewed for a period of three years pursuant to Section 61-29-11 NMSA 1978 and is terminated with more than one year remaining."

Section 5. Section 61-29-9 NMSA 1978 (being Laws 1959, Chapter 226, Section 8, as amended) is amended to read:

"61-29-9. QUALIFICATIONS FOR LICENSE.--

A. Licenses shall be granted only to persons who are deemed by the commission to be of good repute and competent to transact the business of a [real estate] qualifying broker or [salesperson] associate broker in a manner that safeguards the interests of the public.

B. An applicant for a qualifying broker's license shall be a legal resident of the United States, have reached the age of majority and, except as provided in Section 61-29-14 NMSA 1978, be a resident of New Mexico. [Each] An applicant for a qualifying broker's license shall have passed the real estate examination approved by the commission and shall:

(1) have [performed] been actively [as a] engaged in the real estate [salesperson] business as an associate broker or salesperson for at least [twenty-four months out of the preceding thirty-six months immediately prior to filing application] two years and furnish the commission a certificate that he has completed successfully a broker basics course approved by the commission;

[(2) furnish the commission a certificate that he has completed successfully one hundred eighty classroom hours of instruction in basic real estate courses approved by the commission;

(3)] (2) furnish the commission a certificate that he is a duly licensed real estate broker in good standing in another state, providing he has completed successfully ninety classroom hours of instruction in basic real estate courses approved by the commission, thirty hours of which shall have been a broker basics course; or

[(4)] (3) furnish the commission satisfactory proof of his equivalent experience in an activity closely related to or associated with real estate and furnish the commission a certificate that he has completed successfully ninety classroom hours of instruction in basic real estate courses approved by the commission, thirty hours of which shall have been a broker basics course.

C. [Each] An applicant for [a salesperson's] an associate broker's license shall be a legal resident of the United States, have reached the age of majority, have passed the real estate examination approved by the commission and furnish the commission a certificate that he has completed successfully [sixty] ninety classroom hours of instruction in basic real estate courses approved by the commission.

D. The commission shall require the information it deems necessary from every applicant to determine his honesty, trustworthiness and competency. Corporations, partnerships or associations may hold a qualifying broker's license issued in the name of the corporation, partnership or association, [provided] if at least one member of the partnership or association or one officer or employee of a corporation who actively engages in the real estate business first secures a qualifying broker's license. The license shall be issued in the name of the corporation, partnership or association, naming the partner, associate, officer or employee as qualifying broker for the corporation, partnership or association."

Section 6. Section 61-29-10 NMSA 1978 (being Laws 1959, Chapter 226, Section 9, as amended) is amended to read:

"61-29-10. APPLICATION FOR LICENSE AND EXAMINATION.--

A. [All applications for licenses to act as real estate brokers and real estate salespersons] An application for a license shall be made in writing to the commission and shall contain such data and information as may be required upon a form to be prescribed and furnished by the commission. The application shall be accompanied by:

(1) the recommendation of two reputable citizens who own real estate in the county in which the applicant resides, which recommendation shall certify that the applicant is of good moral character, honest and trustworthy; and

(2) the triennial license fee prescribed by the commission.

B. In addition to proof of honesty, trustworthiness and good reputation, an applicant shall pass satisfactorily a written examination approved by the commission. The examination shall be given at the time and places within the state as the commission shall prescribe; provided, however, the examination shall be given not less than two times during each calendar year. The examination shall include business ethics, writing, composition, arithmetic, elementary principles of land economics and appraisals, a general knowledge of the statutes of this state relating to deeds, mortgages, contracts of sale, agency and brokerage and the provisions of Chapter 61, Article 29 NMSA 1978.

C. No applicant is permitted to engage in the real estate business until he has satisfactorily passed the approved examination, and complied with the other requirements of Chapter 61, Article 29 NMSA 1978, and until a license has been issued to him.

D. Notice of passing or failing to pass the examination shall be given by the commission to an applicant not later than three weeks following the date of the examination.

E. The commission may establish educational programs and procure qualified personnel, facilities and materials for the instruction of persons desiring to become qualifying brokers or [salespersons] associate brokers or desiring to improve their proficiency as qualifying brokers or [salespersons] associate brokers. The commission may inspect and accredit educational programs and courses of study and may establish standards of accreditation for educational programs conducted in this state. The expenses incurred by the commission in activities authorized pursuant to this subsection shall not exceed the total revenues received and accumulated by the commission."

Section 7. Section 61-29-11 NMSA 1978 (being Laws 1959, Chapter 226, Section 10, as amended) is amended to read:

"61-29-11. ISSUANCE, RENEWAL AND SURRENDER OF

LICENSES.--

A. The commission shall issue to each qualified applicant a license in the form and size prescribed by the commission.

B. The license shall show the name and address of the licensee. [A real estate salesperson's] An associate broker's license shall show the name of the qualifying broker by whom he is engaged. The license of the [real estate salesperson] associate broker shall be delivered or mailed to the qualifying broker by whom the [real estate salesperson] associate broker is engaged and shall be kept in the custody and control of that qualifying broker.

C. [Every] A license shall be renewed every three years on or before the last day of the month following the licensee's month of birth. Upon written request for renewal by the licensee, the commission shall certify renewal of a license if there is no reason or condition that might warrant the refusal of the renewal of a license. The licensee shall provide proof of compliance with continuing education requirements and pay the renewal fee. If a licensee has not made application for renewal of license, furnished proof of compliance with continuing education requirements and paid the renewal fee by the license renewal date, the license shall expire. The commission may require a person whose license has expired to apply for a license as if he had not been previously licensed under Chapter 61, Article 29 NMSA 1978 and further require that he be reexamined. The commission shall require a person whose license has expired to pay when he applies for a license, in addition to any other fee, a late fee of one hundred dollars ($100). If during a period of one year from the date the license expires the person or his spouse is either absent from this state on active duty military service or the person is suffering from an illness or injury of such severity that the person is physically or mentally incapable of making application for a license, payment of the late fee and reexamination shall not be required by the commission if, within three months of the person's permanent return to this state or sufficient recovery from illness or injury to allow the person to make an application, the person makes application to the commission for a license. A copy of that person's or his spouse's military orders or a certificate from the applicant's physician shall accompany the application. A person excused by reason of active duty military service, illness or injury as provided for in this subsection may make application for a license without imposition of the late fee. All fees collected pursuant to this subsection shall be disposed of in accordance with the provisions of Section 61-29-8 NMSA 1978. The revocation of a qualifying broker's license automatically suspends every [real estate salesperson's] active license granted to any person by virtue of association with the qualifying broker whose license has been revoked, pending a change of broker. Upon the naming of a new qualifying broker, the suspended license will be reactivated without charge if granted during the three-year renewal cycle.

D. Each resident [licensed] qualifying broker shall maintain a fixed office within this state, which shall be so located as to conform with local regulations. Every office operated by a [licensed] qualifying broker shall have a [licensed] qualifying broker in charge who is a natural person. The license of the qualifying broker and each [salesperson] licensee associated with that broker shall be prominently displayed in the office. The address of the office shall be designated in the qualifying broker's license, and no license issued shall authorize the licensee to transact real estate business at any other address. In case of removal from the designated address, the licensee shall make application to the commission before the removal or within ten days thereafter, designating the new location of his office and paying the required fee, whereupon the commission shall issue a license for the new location if the new location complies with the terms of Chapter 61, Article 29 NMSA 1978. A [licensed] qualifying broker shall maintain a sign on his office of such size and content as the commission prescribes. In making application for a license or for a change of address, [the licensee] a qualifying broker shall verify that his office conforms with local regulations.

E. When [a real estate salesperson] an associate broker is discharged or terminates his association or employment with the qualifying broker with whom he is associated, it is the duty of that qualifying broker to deliver or mail to the commission that [real estate salesperson's] person's license within forty-eight hours. The commission shall hold the license on inactive status. It is unlawful for [a real estate salesperson] an associate broker to perform any of the acts authorized by Chapter 61, Article 29 NMSA 1978 either directly or indirectly under authority of an inactive license after his association has been terminated and his license [as salesperson] has been returned to the commission as provided in that article until the appropriate fee has been paid and the license has been reissued by the commission."

Section 8. Section 61-29-12 NMSA 1978 (being Laws 1959, Chapter 226, Section 11, as amended) is amended to read:

"61-29-12. REFUSAL, SUSPENSION OR REVOCATION OF LICENSE FOR CAUSES ENUMERATED.--

A. The commission may refuse to issue or may suspend or revoke a license if the licensee has by false or fraudulent representations obtained a license or, in performing or attempting to perform any of the actions specified in Chapter 61, Article 29 NMSA 1978, an applicant or licensee has:

(1) made a substantial misrepresentation;

(2) pursued a continued and flagrant course of misrepresentation; made false promises through agents, salespersons, advertising or otherwise; or used any trade name or insignia of membership in any real estate organization of which the licensee is not a member;

(3) paid or received a rebate, profit, compensation or commission to or from any unlicensed person, except his principal or other party to the transaction, and then only with his principal's written consent;

(4) represented or attempted to represent a qualifying broker other than a qualifying broker with whom he is associated without the express knowledge and consent of that broker;

(5) failed, within a reasonable time, to account for or to remit any money coming into his possession that belongs to others, commingled funds of others with his own or failed to keep funds of others in an escrow or trustee account or failed to furnish legible copies of all listing and sales contracts to all parties executing them;

(6) been convicted in any court of competent jurisdiction of a felony or any offense involving moral turpitude;

(7) employed or compensated directly or indirectly a person for performing any of the acts regulated by Chapter 61, Article 29 NMSA 1978 [who is not a licensed broker or licensed salesperson] if that person is not a licensee; provided, however, that a [licensed] qualifying broker may pay a commission to a licensed broker of another state; provided further that the nonresident broker shall not conduct in this state any of the negotiations for which a fee, compensation or commission is paid except in cooperation with a [licensed] qualifying broker of this state;

(8) failed, if a qualifying broker, to place as soon after receipt as is practicably possible, after securing signatures of all parties to the transaction, any deposit money or other money received by him in a real estate transaction in a custodial, trust or escrow account, maintained by him in a bank or savings and loan institution or title company authorized to do business in this state, in which the funds shall be kept until the transaction is consummated or otherwise terminated, at which time a full accounting of the funds shall be made by the qualifying broker. Records relative to the deposit, maintenance and withdrawal of the funds shall contain information as may be prescribed by the rules of the commission. Nothing in this paragraph prohibits a qualifying broker from depositing nontrust funds in an amount not to exceed the required minimum balance in each trust account so as to meet the minimum balance requirements of the bank necessary to maintain the account and avoid charges. The minimum balance deposit shall not be considered commingling and shall not be subject to levy, attachment or garnishment. This paragraph does not prohibit a qualifying broker from depositing any deposit money or other money received by him in a real estate transaction with another cooperating broker who shall in turn comply with this paragraph;

(9) failed, if [a salesperson] an associate broker, to place as soon after receipt as is practicably possible in the custody of his qualifying broker, after securing signatures of all parties to the transaction, any deposit money or other money entrusted to him by any person dealing with him as the representative of his qualifying broker;

(10) violated a provision of Chapter 61, Article 29 NMSA 1978 or a rule promulgated by the commission;

(11) committed an act, whether of the same or different character from that specified in this subsection, that is related to dealings as a [broker or real estate salesperson] licensee and that constitutes or demonstrates bad faith, incompetency, untrustworthiness, impropriety, fraud, dishonesty, negligence or any unlawful act; or

(12) been the subject of disciplinary action as a licensee while licensed to practice real estate in another jurisdiction, territory or possession of the United States or another country.

B. An unlawful act or violation of Chapter 61, Article 29 NMSA 1978 by [a real estate salesperson] an associate broker, employee, partner or associate of a [licensed] qualifying broker shall not be cause for the revocation of a license of the qualifying broker unless it appears to the satisfaction of the commission that the qualifying broker had guilty knowledge of the unlawful act or violation."

Section 9. Section 61-29-16 NMSA 1978 (being Laws 1959, Chapter 226, Section 15) is amended to read:

"61-29-16. SUIT BY [BROKER OR SALESMAN] LICENSEE.--No action for the collection of commission or compensation earned by any person as a [real estate] qualifying broker or [salesman] associate broker required to be licensed under the provisions of [this act] Chapter 61, Article 29 NMSA 1978 shall be maintained in the courts of the state unless such person was [a duly licensed broker or salesman] licensed at the time the alleged cause of action arose. In any event, suit against a member of the public as distinguished from any person licensed [under this act] pursuant to Chapter 61, Article 29 NMSA 1978 shall be maintained only in the name of the qualifying broker."

Section 10. Section 61-29-23 NMSA 1978 (being Laws 1980, Chapter 82, Section 4, as amended) is amended to read:

"61-29-23. JUDGMENT AGAINST [BROKER OR SALESPERSON] LICENSEE--PETITION--REQUIREMENTS--RECOVERY LIMITATIONS.--

A. When [any] an aggrieved person claims a pecuniary loss caused by a [state-licensed real estate broker or salesperson] licensee based upon fraud, knowing or willful misrepresentation or wrongful conversion of funds entrusted to him, which loss arose out of any transaction for which a [real estate broker's or salesperson's] license is required and arose out of or during the course of a transaction involving the sale, lease, exchange or other disposition of real estate, where the cause of action arose on or after July 1, 1980, that person may, within one year after obtaining a final judgment based upon fraud, knowing or willful misrepresentation or wrongful conversion of funds entrusted to him and the termination of all proceedings, including appeals in connection with the judgment, file a verified petition with the commission for payment from the real estate recovery fund for the actual damages included in the judgment and unpaid, but not more than ten thousand dollars ($10,000) per judgment regardless of the number of persons aggrieved or parcels of real estate involved in the transaction. The aggregate amount recoverable by all claimants for losses caused by any one licensee shall not exceed thirty thousand dollars ($30,000).

B. A copy of the petition shall be served upon the commission in the manner provided by law for service of a civil summons.

C. The commission shall conduct a hearing on the petition after service of the petition upon the commission. At the hearing, the petitioner shall [be required to] show that he:

(1) is not the spouse of the judgment debtor, the personal representative of the spouse or related to the third degree of consanguinity or affinity to the licensee whose conduct is alleged to have caused the loss;

(2) has complied with all the requirements of the Real Estate Recovery Fund Act;

(3) has obtained a judgment of the kind described in Subsection A of this section, the amount awarded and the amount owing at the date of the petition;

(4) has had execution issued upon the judgment and that the officer executing the writ has made a return showing that the judgment debtor has no property within the state subject to execution. If execution is levied against the property of the judgment debtor, the petitioner [must] shall show that the amount realized on the sale was insufficient to satisfy the judgment and [must] shall set forth the amount realized from the sale and the balance remaining due on the judgment after application of the amount realized;

(5) has made reasonable searches and inquiries to ascertain whether the judgment debtor is possessed of real or personal property or other assets liable to be sold or applied in satisfaction of the judgment, including partnership assets, licensee's estate or any bond or insurance, and that he has exercised reasonable diligence to secure payment of the judgment from the assets of the judgment debtor; and

(6) has a judgment that is not:

(a) covered by any bond, insurance, surety agreement or indemnity agreement;

(b) a loss incurred by a partner, joint venturer, employer, employee or associate of the licensee whose conduct is alleged to have caused the loss; or a corporate officer or director of a corporation in which the judgment debtor is also an officer, director or employee; or

(c) a loss incurred by any business or other entity in which the licensee whose conduct is alleged to have caused the loss has any interest at the time of the conduct alleged to have caused the loss."

Section 11. Section 61-29-27 NMSA 1978 (being Laws 1980, Chapter 82, Section 8, as amended) is amended to read:

"61-29-27. SUBROGATION.--When the commission makes any payment from the real estate recovery fund to a judgment creditor, the commission shall be subrogated to all rights of the judgment creditor for the amounts paid out of the fund and any amount and interest so recovered by the commission shall be deposited in the fund. The commission may, pursuant to the provisions of the Uniform Licensing Act, revoke, suspend or refuse to renew [the] any license of [any real estate broker or salesperson] a licensee for whom payment from the fund has been made in accordance with the provisions of the Real Estate Recovery Fund Act. Further, the [commision] commission may refuse to issue or renew the license of any person for whom payment from the real estate recovery fund has been made, until that person reimburses the fund for all payments made on his behalf."

Section 12. TEMPORARY PROVISION.--

A. Until July 1, 2006, a person licensed as a salesperson pursuant to Chapter 61, Article 29 NMSA 1978 on June 30, 2003 may, upon satisfaction of all the requirements for licensure set forth in that article, continue to be licensed as a salesperson and may perform the functions of an associate broker. If, before July 1, 2006, the person completes the requirements for licensure as an associate broker, he shall, upon application to the New Mexico real estate commission, be licensed as an associate broker.

B. On July 1, 2006, the license of a person licensed as a salesperson pursuant to Chapter 61, Article 29 NMSA 1978 shall be placed on inactive status pursuant to rules of the New Mexico real estate commission.

Section 13. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2003.