New Mexico Real Estate Broker Exam — All Questions

Real estate brokers in New Mexico are licensed and regulated by:

• a.The New Mexico Secretary of State
• b.The New Mexico Real Estate Commission✓
• c.The county clerk
• d.The New Mexico Association of Realtors

The New Mexico Real Estate Commission licenses and regulates real estate brokers and enforces the state's license law and rules. A trade association is a private membership organization and does not license practitioners.

In New Mexico, the entry-level real estate license is the:

• a.Salesperson
• b.Realtor
• c.Sales associate
• d.Associate broker, who works under a qualifying broker✓

New Mexico does not use the 'salesperson' title. The entry-level license is the associate broker, who must work under and be supervised by a qualifying broker. Each brokerage must have a qualifying broker responsible for supervision and trust accounts.

A New Mexico associate broker may lawfully accept compensation for brokerage services:

• a.Directly from the seller upon listing
• b.Directly from the buyer at closing
• c.From any cooperating firm in the transaction
• d.Only through the qualifying broker under whom the associate broker is licensed✓

An associate broker may accept compensation for brokerage services only through the qualifying broker under whom the associate broker is licensed, not directly from a client or another firm. The qualifying broker is responsible for supervision and for paying the associate broker.

A New Mexico broker was born in April. That broker's license expires:

• a.On April 30 every year
• b.Three years from the date the commission issued the license, regardless of birth month
• c.Every three years on the last day of the month following the broker's birth month✓
• d.On December 31 of every third year

Every New Mexico real estate license expires every three years on the last day of the month following the licensee's birth month, so an April birthday produces a May 31 expiration. Renewal is the sole responsibility of the broker. Cite: 16.61.11.8(A) NMAC; NMSA 1978 Section 61-29-11(D).

A New Mexico broker lets a license expire and reinstates it seven months later. Without reexamination, the broker pays:

• a.Three times the regular renewal fee✓
• b.The regular renewal fee plus a flat $50 penalty
• c.Double the regular renewal fee
• d.The regular renewal fee only

A broker may reinstate without reexamination up to one year after expiration by paying a renewal fee three times the regular fee. A broker may apply for an exemption from that late fee only for documented active military service or medical incapacity. Cite: 16.61.11.8(B) and (C) NMAC.

A New Mexico broker's license expired 18 months ago and was never reinstated. The broker now wants to practice again and must:

• a.Pay the accumulated late fees and request reactivation
• b.Complete all prelicensure requirements again, as a new applicant would✓
• c.Submit proof of the continuing education due during the expired cycle and pay the late fee
• d.Ask the commission for a hardship waiver

After one year from expiration the license can no longer be renewed or reinstated, and the broker must undergo all prelicensure requirements to become licensed again. The one-year window, not the payment of fees, is what controls. Cite: 16.61.11.8(D) NMAC.

The New Mexico Real Estate Commission is made up of:

• a.Seven members elected by the state's licensees
• b.Five members appointed by the governor, four licensed brokers and one public member✓
• c.Nine members appointed by the superintendent of regulation and licensing
• d.Five members, all of whom must be licensed brokers

The governor appoints five commissioners who have been state residents for three consecutive years: four licensed associate or qualifying brokers and one public member who has never been licensed. No more than one member may come from any single county, and members serve five-year terms. Cite: NMSA 1978 Section 61-29-4(A).

How often must the New Mexico Real Estate Commission meet, and how is a special meeting called?

• a.At least quarterly; the president may call one on five days' notice✓
• b.Monthly; a special meeting may be called by any two commission members
• c.Twice each year; a special meeting requires a unanimous vote of the members
• d.Once each year; the statute does not authorize special meetings at all

The commission must meet at least once each quarter-year at a time and place set by its president, and the president may call a special meeting on five days' written notice to each member. Cite: NMSA 1978 Section 61-29-6.

A New Mexico court enters one judgment against a licensee for fraud; four buyers were harmed and three parcels were involved. The most the real estate recovery fund can pay on that judgment is:

• a.$10,000
• b.$30,000
• c.$50,000✓
• d.$200,000

The fund reimburses unpaid actual damages up to $50,000 per judgment regardless of the number of persons aggrieved or parcels involved. Separately, all claimants against any one licensee in a calendar year may recover no more than $100,000 in the aggregate. Cite: NMSA 1978 Section 61-29-23(A).

An aggrieved New Mexico buyer wins a final judgment against a broker for wrongful conversion of trust funds. To reach the real estate recovery fund, the buyer must file a verified petition with the commission:

• a.Before the judgment becomes final
• b.Within 90 days after the conversion is discovered
• c.Within six months after the judgment is entered by the district court
• d.Within two years after obtaining the final judgment✓

The claimant has two years from obtaining a final judgment based on fraud, knowing or willful misrepresentation, or wrongful conversion of entrusted funds to file the verified petition, with the judgment attached, served on the commission. Cite: NMSA 1978 Section 61-29-23(A) and (B).

At the commission hearing on a New Mexico recovery fund petition, the petitioner must show all of the following EXCEPT that the petitioner:

• a.Reported the licensee's conduct to the attorney general✓
• b.Is not the spouse of the judgment debtor or related within the third degree
• c.Has complied with all the requirements of the Real Estate Recovery Fund Act
• d.Holds a judgment not covered by a bond, insurance, surety or indemnity agreement

The statute lists three showings: relationship to the judgment debtor, compliance with the act, and the absence of bond, insurance, surety or indemnity coverage. Reporting the licensee to the attorney general is not among them. Cite: NMSA 1978 Section 61-29-23(D).

New Mexico funds its real estate recovery fund with an annual fee of not more than $10 per licensee. The statute directs that the fund be maintained at:

• a.$100,000, with any excess over $250,000 refunded to licensees
• b.$150,000, with any balance over $400,000 on July 1 moved to the real estate commission fund✓
• c.$250,000, with any excess returned to the general fund
• d.$400,000, with no upper limit

The fund level is fixed at $150,000; if it drops below that the commission may adjust the additional fee or draw on the real estate commission fund. If the balance exceeds $400,000 on July 1 of any year, the surplus is transferred to the real estate commission fund. Cite: NMSA 1978 Section 61-29-22(C).

If the New Mexico real estate recovery fund lacks the money to satisfy an authorized claim, the commission must later pay the unpaid claims:

• a.Largest claim first, without interest
• b.Pro rata among all pending claimants
• c.Only after the legislature appropriates new money
• d.In the order the claims were originally filed, with 8 percent annual interest✓

When sufficient money has been deposited, the commission satisfies unpaid claims in the order they were originally filed, together with accumulated interest at eight percent a year. Cite: NMSA 1978 Section 61-29-26.

After the New Mexico recovery fund pays a judgment creditor on account of a licensee's conduct, the commission may:

• a.Take no further action, because payment from the fund settles the matter
• b.Bill the licensee for the amount paid but take no action on the license
• c.Refuse to renew the license until the fund is reimbursed in full✓
• d.Require the licensee's qualifying broker to reimburse the fund instead

The commission is subrogated to the judgment creditor's rights and may revoke, suspend or refuse to renew the licensee's license. It may also refuse to issue or renew a license to that person until every payment made on the person's behalf is reimbursed. Cite: NMSA 1978 Section 61-29-27.

An unlicensed person in New Mexico negotiates the sale of a neighbor's house for a fee. Under the Real Estate Licensing Law that conduct is:

• a.A fourth degree felony✓
• b.A petty misdemeanor punishable by a $100 fine
• c.A civil infraction only
• d.A misdemeanor punishable by up to six months in jail

Acting in the capacity of an associate or qualifying broker without a commission-issued license is a fourth degree felony. Violating any other provision of the article is the misdemeanor, punishable by a fine of not more than $500 or up to six months, or both. Cite: NMSA 1978 Section 61-29-17(A).

Separately from any criminal case, the New Mexico commission may impose a civil penalty on a person found to have practiced without a license. That penalty is capped at:

• a.$500 for each violation, plus the commission's administrative costs
• b.$1,000 per violation, or the total commissions received✓
• c.$5,000 for each violation, payable to the general fund of the state
• d.Three times the commissions received for the unlicensed activity

The commission may impose a civil penalty not to exceed $1,000 for each violation or, if it can determine the figure, the total commissions received for the unlicensed activity. Money collected goes into the real estate recovery fund. Cite: NMSA 1978 Section 61-29-17.2.