SENATE CORPORATIONS AND TRANSPORTATION COMMITTEE SUBSTITUTE FOR
45th legislature - STATE OF NEW MEXICO - first session, 2001
RELATING TO REAL ESTATE LICENSES; CHANGING CERTAIN PROVISIONS FOR LICENSING, FEES AND MISCONDUCT OF BROKERS.
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 [any person,
business association or corporation] 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 [real estate] broker or real estate [salesman]
salesperson within this state without a license issued by the
[New Mexico real estate] commission. A person who engages in
the business or acts in the capacity of a broker or real
estate salesperson in this state, 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 61-29-5 NMSA 1978 (being Laws 1959, Chapter 226, Section 4) 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 [this act] 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 brokers and as real estate salesmen, 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 3. 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 [of sixty
dollars ($60.00)] not to exceed ninety-five dollars ($95.00);
(2) for each broker's license issued, a fee
[of] not to exceed one hundred eighty dollars ($180) and for
each renewal thereof, a fee [of] not to exceed one hundred
eighty dollars ($180);
(3) for each salesperson's license issued, a
fee [of] not to exceed one hundred eighty dollars ($180) and
for each renewal thereof, a fee [of] not to exceed one hundred
eighty dollars ($180);
(4) subject to the provisions of Paragraph
[(11)] (10) of this subsection, for each change of place of
business or change of employer or contractual associate, a fee
[of] 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 [of] not to exceed twenty dollars ($20.00);
(6) for each license history, a fee [of] not
to exceed twenty-five dollars ($25.00);
(7) for copying of documents by the
commission, a fee [set by the commission] not to exceed one
dollar ($1.00) per copy;
(8) for each [additional] license law and
rules and regulations booklet, a fee [set by the commission]
not to exceed ten dollars ($10.00) per booklet;
(9) for each [additional directory] hard copy
or electronic list of licensed real estate brokers and
salespersons, a fee [set by the commission] not to exceed
twenty dollars ($20.00); and
[(10) for each supplement to the directory of
licensed real estate brokers and salespersons, a fee set by
the commission not to exceed twenty dollars ($20.00); and
(11)] (10) when a license must be reissued
for a salesperson because of change of address of the broker's
office, death of the licensed broker when a successor licensed
broker is replacing the decedent and the salesperson remains
in the office or because of a change of name of the office or
the entity of the licensed broker, the licensed broker or
successor licensed broker as the case may be shall pay to the
commission as the affected salesperson's license reissue fee
an amount not to exceed twenty dollars ($20.00); but if there
are eleven or more affected salespersons in the licensed
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 [or regulation] and only after all requirements have been
met as prescribed by Chapter 61, Article 29 NMSA 1978. Any
changes or amendments to the rules [and regulations] 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 fund upon the vouchers
of the [president and secretary] 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 [regulation] 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 [two or] three years pursuant to Section
61-29-11 NMSA 1978 and is terminated with more than one year
remaining."
Section 4. 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 broker or salesperson in a manner that safeguards the interests of the public.
B. [Each] An applicant for a 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
applicant for a [real estate] broker's license shall have
passed the real estate examination approved by the commission
and shall:
(1) have performed actively as a real estate
salesperson for at least twenty-four months out of the
preceding thirty-six months immediately prior to filing
application and furnish the commission a certificate that he
has completed successfully [ninety classroom hours of
instruction in basic real estate courses] 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) 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) 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 applicant for a salesperson'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 [shall] furnish the commission
a certificate that he has completed successfully sixty
classroom hours of instruction in basic real estate courses
approved by the commission.
D. The commission shall require the information
[as it may deem] it deems necessary from every applicant to
determine his honesty, trustworthiness and competency.
Corporations, partnerships or associations [shall be entitled
to] may hold a broker's license issued in the name of the
corporation, partnership or association, provided 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 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 5. 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 salesmen shall be made in
writing to the [New Mexico real estate] commission and shall
contain such data and information as may be required upon a
form to be prescribed and furnished by the commission. [Such
applications] 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 [or has his place of business], which
recommendation shall certify that the applicant is of good
moral character, honest and trustworthy; and
(2) the [annual] triennial license fee
prescribed by the commission [which shall not be refunded in
any event].
B. In addition to proof of honesty,
trustworthiness and good reputation, [each] an applicant shall
pass satisfactorily a written examination [prepared by or
under the supervision of] approved by the commission. The
examination shall be given at [such] the time and [such]
places within the state as the commission shall prescribe;
however, the examination [for brokers] shall be given not less
than two times during each calendar year [and the examination
for salesmen shall be given not less than six times during
each calendar year]. The examination [for a broker's license]
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 [Sections 61-29-1 through
61-29-18 NMSA 1978. The examination for a broker's license
shall be of a more exacting nature and scope and more
stringent than the examination for a salesman's license]
Chapter 61, Article 29 NMSA 1978.
C. No applicant is permitted to engage in the real
estate business [either as a broker or salesman] until he has
satisfactorily passed the approved examination, complied with
the other requirements of [Sections 61-29-1 through 61-29-18]
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 [each] 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
[real estate] brokers or salesmen or desiring to improve their
proficiency as [real estate] brokers or salesmen. 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 [enabled
under the provisions of] authorized pursuant to this
subsection shall not exceed the total revenues received and
accumulated by the commission."
Section 6. Section 61-29-10.3 NMSA 1978 (being Laws 1999, Chapter 127, Section 4) is amended to read:
"61-29-10.3. BROKERAGE NONAGENCY RELATIONSHIPS
[CREATION].--
[A. For all regulated real estate transactions
first executed on or before January 1, 2000, a buyer, seller,
landlord or tenant using real estate services without entering
into an express written agreement will be a customer of the
brokerage providing the real estate services, and no agency
relationship or agency duties will be imposed.
B.] A. For all regulated real estate transactions,
[first executed on or after January 1, 2000] a buyer, seller,
landlord or tenant may enter into an express written agreement
to become a client of a brokerage, without creating an agency
relationship, and no agency duties will be imposed.
[C.] B. The commission shall promulgate rules
governing the rights and responsibilities of clients and
customers and the rights, responsibilities and duties of the
brokerage in a nonagency relationship. All licensees will
perform the duties of licensees as prescribed 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 [permanent] license in [such] the form and size
[as shall be] prescribed by the commission.
B. [This] The license shall show the name and
address of the licensee. [and, in the case of a real estate
salesperson's] A real estate salesperson's license shall show
the name of the [real estate] broker by whom he is engaged.
The license of [each] the real estate salesperson shall be
delivered or mailed to the [real estate] broker by whom [such]
the real estate salesperson is engaged and shall be kept in
the custody and control of that broker.
C. Every license shall be renewed every three
years on or before the last day of the month following the
licensee's month of birth. [The] Upon written request for
renewal by the licensee, the commission shall certify renewal
of [each] a license [in the absence of any] if there is no
reason or condition that might warrant the refusal of the
renewal of a license [upon written request for renewal by the
licensee]. The licensee shall provide proof of compliance
with continuing education requirements and [receipt of] pay
the renewal fee. [In the event any] 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 [his] the license renewal date, the license
shall expire. The commission may [in its discretion] require
[the] 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 [the] 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] person's or his spouse's military orders or a
certificate from the applicant's physician shall accompany the
application. [Any] 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
broker's license [shall] automatically [suspend] suspends
every real estate salesperson's license granted to any person
by virtue of [his] association with the broker whose license
has been revoked, pending a change of broker [and the issuance
of a new license. Such new license shall be issued]. Upon
the naming of a new broker, the suspended license will be
reactivated without charge if granted during the [same year in
which the license was granted] three-year renewal cycle.
D. Each resident licensed 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 broker [under Chapter 61, Article 29 NMSA 1978] shall
have a licensed broker in charge who is a natural person. The
license of the broker and [the license of] each salesperson
associated with [or under contract to] that broker shall be
prominently displayed in the office. The address of the
office shall be designated in the broker's license, and no
license issued shall authorize the licensee to transact real
estate business at any other address [except a licensed branch
office]. In case of removal from the designated address, the
licensee shall make application to the commission before
[such] 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. [Each] A licensed 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 shall verify
that his office conforms with local regulations.
E. When [any] a real estate salesperson is
discharged or terminates his association or employment with
[the real estate] broker with whom he is associated, it is the
duty of that [real estate] broker to [immediately] deliver or
mail to the commission that real estate salesperson's license
within forty-eight hours. The commission shall hold the
license on inactive status. It is unlawful for [any] a real
estate salesperson to perform any of the acts [contemplated]
authorized by Chapter 61, Article 29 NMSA 1978 either directly
or indirectly under authority of [such] 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.
[F. During the period from July 1, 1995 through
June 30, 1998, the commission in its discretion may renew
licenses for periods of one, two or three years for the
purpose of coordinating continuing education requirements with
license renewal requirements.]"
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 [shall have the power to] may
refuse [a license for cause or] to issue or may suspend or
revoke a license [at any time where] if the licensee has by
false or fraudulent representations obtained a license or,
[where the licensee] in performing or attempting to perform
any of the actions [mentioned] specified in Chapter 61,
Article 29 NMSA 1978, [is deemed to be guilty of: A. making]
an applicant or licensee has:
(1) made a substantial misrepresentation;
[B. pursuing] (2) pursued a continued and
flagrant course of misrepresentation; [making] made false
promises through agents, salespersons, advertising or
otherwise; or [using] used any trade name or insignia of
membership in any real estate organization of which the
licensee is not a member;
[C. paying or receiving any]
(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;
[D. representing or attempting]
(4) represented or attempted to represent a
[real estate] broker other than [the] a broker with whom he is
[licensed] associated without the express knowledge and
consent of [the] that broker;
[E. failing] (5) failed, within a reasonable
time, to account for or to remit any money coming into his
possession that belongs to others, [commingling] commingled
funds of others with his own or [failing] failed to keep
[such] funds of others in an escrow or trustee account or
[failing] failed to furnish legible copies of all listing and
sales contracts to all parties executing them;
[F. conviction] (6) been convicted in any
court of competent jurisdiction of a felony or any offense
involving moral turpitude;
[G. employing or compensating]
(7) employed or compensated directly or
indirectly [any] 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; provided, however,
that a licensed broker may pay a commission to a licensed
broker of another state; provided further that the nonresident
broker [does] 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 broker of this
state;
[H. failing, if a broker]
(8) failed, if a 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 broker. Records relative to the
deposit, maintenance and withdrawal of [such] the funds shall
contain information as may be prescribed by the rules [and
regulations] of the commission. Nothing in this [subsection
shall prohibit any] paragraph prohibits a 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. [This] The minimum
balance deposit shall not be considered commingling and shall
not be subject to levy, attachment or garnishment. This
[subsection, however, shall] paragraph does not prohibit a
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
[subsection;
I. failing, if a salesperson] paragraph;
(9) failed, if a salesperson, to place as
soon after receipt as is practicably possible in the custody
of his [registered] 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 [registered] broker;
[J. violating any provisions]
(10) violated a provision of Chapter 61,
Article 29 NMSA 1978 or [any reasonable] a rule [or
regulation] promulgated by the commission; [in the interests
of the public and in conformance with the provisions of
Chapter 61, Article 29 NMSA 1978; or
K. any other conduct]
(11) committed an act, whether of the same or
different character from that specified in this [section]
subsection, that is related to dealings as a [real estate]
broker or real estate salesperson and that constitutes or
demonstrates bad faith, incompetency, untrustworthiness,
impropriety, fraud, dishonesty, negligence or any unlawful
act; [Any] or
(12) was licensed to practice real estate in another jurisdiction, territory or possession of the United States or another country and was the subject of disciplinary action as a licensee.
B. An unlawful act or violation of [any of the
provisions of] Chapter 61, Article 29 NMSA 1978 by [any] a
real estate salesperson, employee, partner or associate of a
licensed [real estate] broker shall not be cause for the
revocation of a license of [any real estate] the broker unless
it appears to the satisfaction of the commission that the
[real estate] broker had guilty knowledge of the unlawful act
or violation."
Section 9. Section 61-29-14 NMSA 1978 (being Laws 1959, Chapter 226, Section 13, as amended) is amended to read:
"61-29-14. NONRESIDENT BROKERS.--[No]
A. An application for issuance of a license or
renewal of an existing [broker's] license shall be accepted
from a nonresident applicant who is a [resident of] broker
licensed in another state [which does not extend] only if the
other state extends the privilege of reciprocal licensure to
[real estate brokers licensed] licensees in New Mexico. A
qualifying nonresident may become a [real estate broker] New
Mexico nonresident licensee by conforming to all the
conditions of Chapter 61, Article 29 NMSA 1978.
B. In its discretion, the commission may
recognize, in lieu of the recommendations and certificates
required to accompany an application for a [broker's] license,
the [broker's] license issued to a nonresident in another
state, provided the other state extends the privilege of
licensure to [real estate brokers licensed] licensees in New
Mexico. The license shall be issued upon payment of the
license fee, verification that the applicant has complied with
his resident state's current education requirements, of which
ninety classroom hours for a nonresident broker must be
approved by the [New Mexico real estate] commission and thirty
of which shall have been a broker basics course, and the
filing by the applicant with the commission of a certified
copy of the applicant's license issued by the other state,
[provided that: A. the applicant shall have maintained] if
the applicant:
(1) maintains an active place of business in
the state by which he is licensed and [shall pass the written
examination required by] meets the licensing requirements of
Section 61-29-10 NMSA 1978; and
[B. the applicant shall file] (2) files with
the commission an irrevocable consent that suits and actions
may be commenced against him in the proper court of any county
of this state in which a cause of action may arise or in which
the plaintiff may reside, by the service of any process or
pleadings authorized by the laws of this state on the
commission, the consent stipulating and agreeing that such
service of process or pleadings on the commission [shall be
taken and held in all courts to be] is as valid and binding as
if personal service had been made upon the applicant in New
Mexico. The instrument containing the consent shall be [duly]
acknowledged and, if [the applicant is] executed on behalf of
a corporation or association, shall be accompanied by [the
duly] a certified copy of the resolution of the proper
officers or managing board authorizing the [proper] executing
officer to execute the instrument. [In case any process or
pleading mentioned in the case is served upon the board, it
shall be by duplicate copies, one of which] Service of process
or pleadings shall be served in duplicate upon the commission;
one shall be filed in the office of the commission and the
other immediately forwarded by registered mail to the main
office of the applicant against which the process or pleadings
are directed [and
C. the applicant shall file a bond in form and
content the same as is required of resident applicants under
Chapter 61, Article 29 NMSA 1978]."
Section 10. Section 61-29-15 NMSA 1978 (being Laws 1959, Chapter 226, Section 14) is amended to read:
"61-29-15. [PUBLICATION] MAINTENANCE OF LIST OF
LICENSEES.--The commission shall [at least annually, publish]
maintain a list of the names and addresses of all licensees
licensed by it under the provisions of [this act] Chapter 61,
Article 29 NMSA 1978, and of all persons whose license has
been suspended or revoked within that year, together with such
other information relative to the enforcement of the
provisions of [this act] Chapter 61, Article 29 NMSA 1978 as
it may deem of interest to the public. The commission shall
also [prepare] maintain a statement of all funds received and
a statement of all disbursements, and copies of [such] the
statements shall be mailed by the commission to any person in
this state upon request."
Section 11. A new section of Chapter 61, Article 29 NMSA 1978 is enacted to read:
"[NEW MATERIAL] UNLICENSED ACTIVITY--CIVIL PENALTY.--The commission may impose a civil penalty in an amount not to exceed one thousand dollars ($1,000) for each violation and assess administrative costs for any investigation and administrative or other proceedings against any person who is found, through a court or administrative proceeding, to have acted without a license in violation of Chapter 61, Article 29 NMSA 1978."
Section 12. A new section of Chapter 61, Article 29 NMSA 1978 is enacted to read:
"[NEW MATERIAL] REGULATION AND LICENSING DEPARTMENT--ADMINISTRATIVELY ATTACHED.--The commission is administratively attached to the regulation and licensing department."
Section 13. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2001.