44TH LEGISLATURE - STATE OF NEW MEXICO - FIRST SESSION, 1999

RELATING TO REAL ESTATE LICENSEES; CHANGING CERTAIN PROVISIONS FOR LICENSING, FEES AND MISCONDUCT OF LICENSEES; ELIMINATING THE SALESPERSON CATEGORY OF REAL ESTATE LICENSURE; PROVIDING FOR THE TRANSITION OF SALESPERSONS TO ASSOCIATE BROKERS; AMENDING THE REAL ESTATE RECOVERY FUND ACT.

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] No person [business association or corporation to] may engage in the business of, 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 within] in this state without a license issued by the [New Mexico real estate] commission."

Section 2. Section 61-29-2 NMSA 1978 (being Laws 1959, Chapter 226, Section 2, as amended) is amended to read:

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

A. [A real estate] As used in Chapter 61, Article 29 NMSA 1978:

(1) "associate broker" [within the meaning of Chapter 61, Article 29 NMSA 1978, is] means a person [business association or corporation] who for [a salary, fee, commission or valuable] compensation or other consideration [lists, sells or offers for sale, buys or offers to buy or negotiates the purchase or sale or exchange of real estate or who leases or offers to lease, or rents or offers for rent or auctions or offers or attempts or agrees to auction real estate or who buys or offers to buy, sell or offers to sell or otherwise deals in options on real estate or advertises or holds himself out as being engaged in the business of buying, selling, exchanging, renting, leasing, auctioning or dealing with options on any real estate or the improvement thereon for others, as a whole or partial vocation. The term "broker" also includes any person employed by or on behalf of the owner of real estate to conduct the sale, leasing or other disposition thereof at a salary or fee, commission or any other consideration. It also includes any person who engages in the business of charging an advance fee or contracting for collection of a fee in connection with any contract whereby he undertakes primarily to promote the sale of real estate through its listing in a publication issued primarily for such purpose or for referral of information concerning such real estate to brokers, or both. The term] is associated with or engaged under contract by a qualifying broker to participate in an activity described in Subparagraph (a) or (b) of Paragraph (4) of this subsection or to carry on the qualifying broker's business as a whole or partial vocation;

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

(3) "license" means a real estate broker's license issued by the commission;

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

(a) for 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) 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;

(e) has been licensed and actively engaged in the real estate business for at least three years;

(f) is a licensed real estate qualifying broker who has qualified as an individual proprietorship, a corporation, partnership or association to do business as a real estate brokerage in the state of New Mexico, or 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 Chapter 61, Article 29-2, NMSA 1978;

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

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

(5) "real estate" [as used in Chapter 61, Article 29 NMSA 1978, shall include] includes leaseholds and other interest less than leaseholds, including rights to use property. [Resident managers of apartment buildings are not required to be licensed, provided they do not carry on any other real estate activity and do not serve as a resident manager for more than one employer.

B. A real estate "salesperson", within the meaning of Chapter 61, Article 29 NMSA 1978, is any person who for a compensation or valuable consideration is associated with or engaged under contract either directly or indirectly by or on behalf of a licensed broker to participate in any activity included in Subsection A of this section or in the pursuance of such broker's business, as a whole or partial vocation.

C. Any one] B. A single act of a person [business association or corporation] in performing or attempting to perform an activity [set forth] described in Subparagraphs (a) through (d) of Paragraph (4) of Subsection A of this section [shall constitute] constitutes the person [business association or corporation a real estate] a qualifying broker [or real estate salesperson]. A single act of a person in performing or attempting to perform an activity described in Paragraph (4) of Subsection A of this section constitutes the person an associate broker.

[D.] C. The provisions of Chapter 61, Article 29 NMSA 1978 [shall] do not apply to [be construed to include, held to include or apply to]:

(1) [any] a person [business association or corporation] who as owner or lessor performs any of the activities included in this section with reference to property owned or leased by him and the employees of the owner or lessor, [or the employees of a real estate broker acting on behalf of the owner or lessor, with respect to the property owned or leased, where] 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 [where] 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 have not used a power of attorney for the purpose of evading the provisions of Chapter 61, Article 29 NMSA 1978;

(3) transactions [where] 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 [by up to] 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 61-29-4 NMSA 1978 (being Laws 1959, Chapter 226, Section 3, as amended) is amended to read:

"61-29-4. CREATION OF COMMISSION--POWERS AND DUTIES.--[There is created]

A. The New Mexico real estate commission [called "the commission" in Chapter 61, Article 29 NMSA 1978] is created. The commission [shall be appointed by the governor and shall consist] consists of five members [who shall have been] appointed by the governor. Members must have been residents of the state for three consecutive years immediately prior to their appointment. Four [of whom shall have been real estate] shall be qualifying brokers licensed in New Mexico and one [of whom] shall be a [member of the public] natural person who has never been licensed [as a real estate broker or salesperson provided] pursuant to Chapter 61, Article 29 NMSA 1978. Not more than one member [shall] may be from [any] one county [within the state]. The members of the commission shall serve for a period of five years or until their successors are appointed and qualified. Members appointed to fill vacancies shall [be appointed] serve for [any] the unexpired term. The governor may remove any member for cause.

B. The commission [shall possess all] has the powers and [perform all the] duties prescribed by Chapter 61, Article 29 NMSA 1978 and [as otherwise provided] prescribed by [law, and] other laws. It [is expressly vested with] has the power [and authority] to make and enforce [any] rules [and regulations] to carry out the provisions of [that article] Chapter 61, Article 29 NMSA 1978. Prior to [any] final action on any proposed changes or amendments to the rules [and regulations] of the commission, the commission [may] shall publish notice of the proposed action in its official publication, distribute the publication to each active licensee and give the time and place for a public hearing on the proposed changes. The hearing shall be held at least thirty days prior to any proposed final action. Any changes or amendments to the rules [and regulations] shall be filed [in accordance with the procedures of] pursuant to the State Rules Act and shall become effective thirty days after [notification to all active licensees of the] filing [of the changes or amendments] with the state records center. The commission may employ any staff it deems necessary to assist in carrying out its duties and in keeping its records."

Section 4. Section 61-29-4.1 NMSA 1978 (being Laws 1985, Chapter 89, Section 1, as amended) is amended to read:

"61-29-4.1. ADDITIONAL POWERS OF COMMISSION--CONTINUING EDUCATION PROGRAMS--MINIMUM REQUIREMENTS.--[In addition to the powers and duties granted the commission under the provisions of Section 61-29-4 NMSA 1978] The commission shall adopt [regulations] rules providing for continuing educational programs that offer courses in selling, leasing or managing residential, commercial and industrial property as well as courses reviewing basic real estate law and practice. The [regulations] rules shall require that every licensee except licensees who are sixty-five years of age or older and who have a minimum of twenty [years'] years of continuously licensed experience in the selling, leasing or managing of real property, as a condition of his license renewal, shall successfully complete thirty [classroom] credit hours of instruction every three years in courses approved by the commission. The [regulations] rules shall prescribe areas of specialty or expertise and may require that a certain part of the thirty credit hours of classroom instruction be devoted to courses in the area of a licensee's specialty or expertise."

Section 5. 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] constitutes 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] qualifying brokers and [as real estate salesmen] associate brokers, showing the name, place of business of each and the date and number of his [or her certificate] license 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 6. Section 61-29-7 NMSA 1978 (being Laws 1959, Chapter 226, Section 6, as amended) is amended to read:

"61-29-7. REIMBURSEMENT AND EXPENSES.--Each member of the commission shall receive per diem and mileage as provided in the Per Diem and Mileage Act and shall receive no other compensation, perquisite or allowance. The commission may select and appoint an administrator, who shall serve as executive secretary to the commission on annual salary, to perform the duties prescribed by [this act] Chapter 61, Article 29 NMSA 1978 and such additional duties as the commission may determine. The commission may employ subordinate officers, stenographers, clerks, an attorney and such other assistance as may be needed and fix their compensation to be paid from the real estate commission fund and [to] purchase such supplies, equipment and records and [to] incur such other expenses as may be necessary to carry out the provisions of [this act] Chapter 61, Article 29 NMSA 1978."

Section 7. 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 charged by the commission and paid into the real estate commission fund:

(1) for each examination, a fee of sixty dollars ($60.00);

(2) for each broker's license issued, a fee of one hundred eighty dollars ($180) and for each renewal thereof, a fee of one hundred eighty dollars ($180);

(3) for each salesperson's license issued, a fee of one hundred eighty dollars ($180) and for each renewal thereof, a fee of one hundred eighty dollars ($180);

(4) subject to the provisions of Paragraph (11) of this subsection for each change of place of business or change of employer or contractual associate, a fee of twenty dollars ($20.00);

(5) for each duplicate license, where the license is lost or destroyed and affidavit is made thereof, a fee of twenty dollars ($20.00);

(6) for each license history, a fee of 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 of licensed real estate brokers and salespersons, a fee set by the commission not to exceed twenty dollars ($20.00);

(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) when a license must be reissued for a salesperson because of change of address of the licensed 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 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 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] charged 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 of the commission; 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.] but no fee shall exceed two hundred dollars ($200).

[D.] B. 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 8. 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 such] in a manner [as to] that will safeguard the interests of the public.

B. [Each] An applicant for a qualifying broker's license shall be a legal resident of the United States, have reached the age of majority and [have been an actual bona fide] be a resident of New Mexico [for six months next preceding the filing of application. Each] at the time of application for licensing. In addition to passing the state broker's exam, an applicant for a [real estate] qualifying broker's license shall:

(1) have [performed] been actively [as a] engaged in the real estate [salesperson in New Mexico] business for at least [twenty-four months out of the preceding thirty-six months immediately prior to filing application] three years as a licensed associate broker and shall 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)] (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] sixty classroom hours of instruction in basic real estate courses approved by the commission; 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] sixty classroom hours of instruction in basic real estate courses approved by the commission.

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 and be a resident of New Mexico [preceding the filing of] at the time of application [and] for licensing. As a prerequisite for licensing, an applicant shall furnish the commission a certificate that he has completed successfully [sixty] one hundred twenty hours of classroom [hours of] pre-licensing instruction in basic real estate courses approved by the commission.

D. The commission shall require [such] the information [as] it [may deem] 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] 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. Such 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 9. 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] The applications 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 the commission. The examination shall be given at [such] the time and [such] places within the state as the commission shall prescribe; however, the license 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.]

C. No applicant is permitted to engage in the real estate business [either as a broker or salesman] until he has satisfactorily passed the examination, complied with the other requirements of Sections 61-29-1 through 61-29-18 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] licensed qualifying brokers or [salesmen] licensed associate brokers or desiring to improve their proficiency as [real estate] licensed qualifying brokers or [salesmen] licensed 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 [enabled under] authorized pursuant to the provisions of this subsection shall not exceed the total revenues received and accumulated by the commission."

Section 10. 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] a 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] an associate broker's license shall show the name of the [real estate] qualifying broker by whom he is engaged. The license of [each real estate salesperson] an associate broker shall be delivered or mailed to the [real estate] licensed qualifying broker by whom [such real estate salesperson] the associate broker is engaged and shall be kept in the custody and control of that qualifying 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. 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 license renewal date, [the] his 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] reexamine. 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 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 [shall] automatically [suspend] suspends every [real estate salesperson's] associate broker's license granted to [any] a person by virtue of his association with the qualifying broker whose license has been revoked, pending a change of qualifying broker and the issuance of a new associate broker's license. [Such] The new associate broker's license shall be issued without charge if granted during the same year in which the suspended associate broker's license was granted.

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 [under Chapter 61, Article 29 NMSA 1978] shall have a licensed qualifying broker who is a natural person in charge. The license of the qualifying broker and the license of [each salesperson] an associate broker associated with or under contract to that qualifying 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 [except a licensed branch office]. In case of removal from the designated address, the licensee shall make application to the commission before such 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 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] licensed qualifying broker shall verify that his office conforms with local regulations.

E. When any [real estate salesperson] licensed associate broker is discharged or terminates his association or employment with the [real estate] licensed qualifying broker with whom he is associated, it is the duty of that [real estate] qualifying broker to [immediately] within forty-eight hours deliver or mail to the commission that [real estate salesperson's] associate broker's license. The commission shall hold the license on inactive status. It is unlawful for any [real estate salesperson] associate broker to perform any of the acts [contemplated] of an associate broker 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] an associate broker has been returned to the commission as provided in that article until the appropriate fee has been paid and the associate broker's 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 11. 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 by false or fraudulent representations 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] has:

[A. making] (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] (3) paid or [receiving] received any 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] (4) if the licensee is an associate broker, represented or [attempting] attempted to represent a [real estate] licensed qualifying broker other than the licensed qualifying broker with whom he is licensed without the express knowledge and consent of [the] that licensed qualifying 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] an offense involving moral turpitude;

[G. employing] (7) employed or [compensating] compensated directly or indirectly [any] a person for performing any of the acts regulated by Chapter 61, Article 29 NMSA 1978 [who is] if that person was not a licensed qualifying broker or a licensed [salesperson provided, however, that] associate broker at the time of employment or contractual relationship; except a licensed qualifying broker may pay a commission to a [licensed] broker [of] licensed in another state [provided further that], but 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 qualifying broker of this state;

[H. failing, if a broker] (8) if the licensee is a licensed qualifying broker, failed 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 licensed qualifying broker. Records relative to the deposit, maintenance and withdrawal of [such] those 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 licensed 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. This minimum balance deposit shall not be considered commingling and shall not be subject to levy, attachment or garnishment. This subsection [however, shall] does not prohibit a licensed 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 [subsection] paragraph;

[I. failing, if a salesperson] (9) if the licensee is an associate broker, failed to place as soon after receipt as is practicably possible in the custody of his [registered] licensed qualifying broker any deposit money or other money entrusted to him by any person dealing with him as the representative of his [registered] licensed qualifying broker;

[J. violating any provisions] (10) violated a provision of Chapter 61, Article 29 NMSA 1978 or [any reasonable] a rule [or regulation] adopted and 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 acts, whether of the same or different character from that specified in this section, that [is] were related to his dealings as a [real estate] licensed qualifying broker or [real estate salesperson] licensed associate broker and that [constitutes] constituted or [demonstrates] demonstrated bad faith, incompetency, untrustworthiness, impropriety, fraud, dishonesty, negligence or [any] an unlawful act; or

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

[Any] B. An unlawful act or violation of [any of the provisions] a provision of Chapter 61, Article 29 NMSA 1978 by any [real estate salesperson] licensed associate broker employee, partner or associate of a licensed [real estate] qualifying broker shall not be cause for the revocation of a license of [any real estate] a qualifying 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 12. 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 [any] a nonresident applicant who is [not] a broker licensed in another state [which] only if the other state extends the privilege of reciprocal licensure to [real estate] brokers licensed in New Mexico. A qualifying nonresident may become a [real estate] licensed broker 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 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] sixty classroom hours for a nonresident broker must be approved by the [New Mexico real estate] commission, 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] if the applicant:

(1) maintained an active place of business in the state by which he is licensed, [shall establish] establishes and [maintain] maintains an active place of business in this state and [shall pass] passes the written examination required by 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 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] pleadings in the case [is] shall be served in duplicate upon the [board, it shall be by duplicate copies] commission, and one [of which] 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] to 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 13. 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 by it and a statement of all disbursements [and] made by it. Copies of [such] these statements shall be mailed by the commission to any person in this state upon request."

Section 14. 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].--No action for the collection of commission or compensation earned by [any person as] a [real estate] broker [or salesman] 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] the broker [or salesman] was licensed as a qualifying broker 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 shall be maintained only in the name of the broker.]"

Section 15. Section 61-29-20 NMSA 1978 (being Laws 1980, Chapter 82, Section 1) is amended to read:

"61-29-20. SHORT TITLE.--Sections [1 through 10 of this act] 61-29-20 through 61-29-29 NMSA 1978 may be cited as the "Real Estate Recovery Fund Act"."

Section 16. Section 61-29-23 NMSA 1978 (being Laws 1980, Chapter 82, Section 4, as amended) is amended to read:

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

A. When any aggrieved person claims a pecuniary loss caused by a [state-licensed real estate] licensed qualifying broker or [salesperson] a licensed associate broker 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] qualifying broker's or [salesperson's] associate broker'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 17. 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 license of [any real estate] a licensed qualifying broker or [salesperson] a licensed associate broker 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 18. TEMPORARY PROVISION--TRANSITION.--

A. A person licensed as a salesperson pursuant to Chapter 61, Article 29 NMSA 1978, who has completed a broker basics course approved by the New Mexico real estate commission prior to June 30, 2002, shall be licensed as an associate broker on July 1, 2002.

B. A person licensed as a salesperson on June 30, 2002, pursuant to Chapter 61, Article 29 NMSA 1978, may, on or after July 1, 2002, be placed on inactive status pursuant to rules of the New Mexico real estate commission. On or after July 1, 2002, a person on inactive status may apply for and receive an associate broker's license if he has completed a broker basics course approved by the commission.

Section 19. DELAYED EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2002.