Real Estate Practice in New Mexico
New Mexico practice includes handling client money through the qualifying broker's trust account and disclosing adverse material facts. This chapter covers trust funds and disclosure duties.
Trust Accounts and Client Money
Client money such as earnest money must be handled through the brokerage's trust (escrow) account, which the qualifying broker is responsible for maintaining, and kept separate from the broker's own funds. An associate broker who receives client money must deliver it to the qualifying broker for handling. Commingling or converting trust money is one of the most serious violations of New Mexico license law.
Disclosure of Adverse Material Facts
Under the broker-duties framework, a New Mexico broker must disclose to the parties any adverse material facts the broker actually knows about the property or the transaction, such as a known material defect. The broker is not required to independently inspect the property but may not conceal known problems or misrepresent the property. Honest disclosure protects consumers and reduces the broker's exposure to complaints.
Advertising and Honest Dealing
Advertising must be truthful and must be conducted under the qualifying broker; an associate broker may not advertise listed property independently of the firm. Brokers must avoid misrepresentation and comply with the broker duties. Accurate, supervised advertising protects consumers and limits the broker's exposure to discipline.