New Mexico Contractor License Exam — All Questions

An unlicensed operator performs contracting work in New Mexico and then sues the owner for payment. Under NMSA §60-13-30, what is the result?

• a.The operator cannot bring or maintain an action in any court to collect compensation for the work✓
• b.The operator may collect materials costs only
• c.The owner owes the contract price plus a bonus penalty
• d.The operator may collect the full contract price

NMSA §60-13-30 bars a person who was not a duly licensed contractor when contracting from bringing or maintaining any court action to collect compensation for the work. The loss of the right to sue for payment is New Mexico's strongest civil deterrent to unlicensed contracting.NMSA §60-13-30

Under the Construction Industries Licensing Act, when is a license required to perform construction work in New Mexico?

• a.Never; New Mexico registers but does not license contractors
• b.A license is required to engage in contracting, subject only to limited statutory exemptions✓
• c.Only for projects over $500,000
• d.Only for projects owned by the state

The Construction Industries Licensing Act requires a license to engage in contracting in New Mexico, with only limited statutory exemptions. Licensure is the gateway requirement, and unlicensed contracting carries penalties and the loss of the right to sue for payment.NMSA Ch. 60, Art. 13 (licensing requirement)

Under NMSA §48-2-6, within what time after completion must an original (general) contractor file a claim of lien in New Mexico?

• a.Within 10 days
• b.Within two years
• c.Within 120 days✓
• d.Within 30 days

New Mexico's lien statute gives an original contractor 120 days after completion to file the claim of lien, while other claimants such as subcontractors and suppliers must file within 90 days. Missing the deadline defeats the lien.NMSA §48-2-6

A subcontractor in New Mexico wants to preserve lien rights. Within what time after completion must the subcontractor file the claim of lien?

• a.Within one year
• b.Within 90 days✓
• c.Within 30 days
• d.Within 120 days, the same as an original contractor

Under NMSA §48-2-6, claimants other than the original contractor — including subcontractors, laborers, and suppliers — must file the claim of lien within 90 days after completion. The original contractor has the longer 120-day window.NMSA §48-2-6 (subcontractor deadline)

Instead of a conventional sales tax, New Mexico imposes which tax that applies to a contractor's business receipts?

• a.A federal construction excise tax
• b.A flat 5% statewide sales tax collected only from homeowners
• c.No transaction tax of any kind
• d.The Gross Receipts Tax (GRT), reported through a state business tax account✓

New Mexico levies a Gross Receipts Tax (GRT) under NMSA Chapter 7 rather than a conventional sales tax. Contractors register for a state business tax account and report GRT on their gross receipts at the state-plus-local rate for the job location.NMSA Ch. 7 (Gross Receipts Tax)

Beyond losing the right to sue for payment, how is unlicensed contracting generally treated under the New Mexico Construction Industries Licensing Act?

• a.As a violation subject to penalties, including misdemeanor prosecution✓
• b.As a purely private matter with no penalty
• c.As a federal offense enforced by OSHA
• d.As grounds for an automatic license

The Construction Industries Licensing Act treats unlicensed contracting as a violation subject to penalties, including misdemeanor prosecution under NMSA §60-13-52. This is in addition to the §60-13-30 bar on bringing an action to collect.NMSA §60-13-52 (unlicensed practice)

After recording a valid claim of lien in New Mexico, within what general period must the claimant bring an action to enforce (foreclose) the lien?

• a.Within ten years
• b.Within 30 days
• c.Within two years✓
• d.There is no deadline to foreclose

New Mexico generally requires the lien claimant to bring suit to enforce the lien within two years after recording the claim of lien. If no action is filed within that period, the lien expires.NMSA §48-2 (lien enforcement)

Why does New Mexico's licensing law matter to a contractor's ability to be paid and to file a lien?

• a.It has no effect on payment or lien rights
• b.Because an unlicensed contractor cannot sue to collect, unlicensed status undermines both ordinary collection and reliance on the courts to enforce a claim✓
• c.It only changes the filing fee for a lien
• d.It merely speeds permit approval

Because NMSA §60-13-30 bars an unlicensed contractor from bringing an action to collect compensation, unlicensed status leaves the contractor unable to use the courts to enforce payment or, practically, a lien claim. Licensure is a precondition to New Mexico's collection tools.NMSA Ch. 60, Art. 13 (owner protections)