SENATE BILL 449
56th legislature - STATE OF NEW MEXICO - first session, 2023
Gerald Ortiz y Pino
RELATING TO REAL PROPERTY; ENACTING THE REAL ESTATE CONTRACT ACT; DEFINING TERMS; PROVIDING REQUIREMENTS FOR RECORDING REAL ESTATE CONTRACTS; PROVIDING PROTECTION FOR THE INTERESTS OF BUYERS PURSUANT TO REAL ESTATE CONTRACTS; PROVIDING CIVIL REMEDIES FOR NONCOMPLIANCE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Real Estate Contract Act".
SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Real Estate Contract Act:
A. "buyer" means the person who is obligated to make payments to the seller pursuant to a real estate contract;
B. "date of sale" means the date that the seller and buyer execute a real estate contract;
C. "down payment" means a payment, other than the ordinary periodic payment, made at or near the time of the execution of the real estate contract;
D. "dwelling" means a private home or residence or a building or structure intended for residential use;
E. "real estate contract" means a written contract or agreement, including a contract for deed, bond for deed, rent-to-own agreement, rental agreement with option to purchase or any other legal device whereby a seller agrees to sell and a buyer agrees to buy a dwelling in which the consideration for the sale is payable in installments for a period of at least one year after the buyer takes possession of the dwelling and the seller continues to have an interest in the property; and
F. "seller" means the owner of a legal or beneficial interest in a dwelling who uses a real estate contract to transfer ownership of the dwelling.
SECTION 3. [NEW MATERIAL] RECORDING OF REAL ESTATE CONTRACT REQUIRED.--
A. Within thirty days after the date of sale and prior to any subsequent sale or other transfer of interest in a dwelling or real estate contract by a seller, the seller shall record the real estate contract with the county clerk.
B. If a seller fails to record the real estate contract as required by Subsection A of this section, the buyer has the right to terminate the real estate contract without penalty until such time as the seller records the real estate contract. In the event of such termination, the seller shall return to the buyer the full amount of any down payment made pursuant to the real estate contract.
C. If a seller fails to record a real estate contract as required by Subsection A of this section and title to the property becomes clouded for any reason, including another person buying the property, a judgment lien being placed on the property or a consensual mortgage or some other third-party interest affecting the title arises, the buyer has the option to terminate the real estate contract without penalty at any time within ninety days of discovering the cloud on the title. In the event of such termination, the seller shall return to the buyer the full amount of any down payment made pursuant to the real estate contract.
D. In the event of failure to record a real estate contract as required by Subsection A of this section, a buyer may be awarded civil damages not to exceed fifty dollars ($50.00) per day for each day of violation. Proof of monetary damage, loss of profits or intent to deceive or take unfair advantage of any person is not required.
E. The county clerk shall record a real estate contract presented for recording even if not presented within thirty days of the date of sale.
F. A seller shall have until November 1, 2023 to record any real estate contract executed before July 1, 2023. A seller's failure to record a real estate contract by November 1, 2023 shall constitute a failure to meet the requirement set forth in Subsection A of this section and the buyer may pursue the remedies set forth in Subsections B through D of this section as well as any other remedies to which the buyer may be entitled.
G. This section applies to residential real estate contracts entered into before, on or after July 1, 2023. However, real estate contracts entered into before July 1, 2023 shall not be subject to the provisions of the Real Estate Contract Act until November 1, 2023.
SECTION 4. [NEW MATERIAL] MORTGAGES.--
A. A seller shall not place or hold any mortgage on any property sold pursuant to a real estate contract in any amount greater than the balance due pursuant to the real estate contract, nor may any mortgage require payments in excess of the periodic payments required pursuant to the real estate contract.
B. A seller shall not mortgage any interest in a property subject to a real estate contract after the contract is executed without the express written permission of the buyer.
C. All periodic payments due pursuant to a real estate contract shall first be applied to any outstanding amounts due pursuant to any mortgage contract on the same property.
SECTION 5. [NEW MATERIAL] RIGHT TO CURE.--Prior to the initiation of any action to enforce a real estate contract due to an alleged default, a seller shall deliver to the buyer written notice of any alleged default and provide the buyer with thirty days from the date of delivery of that notice to cure any such alleged default.
SECTION 6. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2023.
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