NM Stat § 61-29-12 (2021)
2021 New Mexico Statutes|Chapter 61 - Professional and Occupational Licenses|Article 29 - Real Estate Brokers and Salesmen|Section 61-29-12 - Refusal, suspension or revocation of license for causes enumerated.

A. The commission may refuse to issue a license or may suspend, revoke, limit or condition a license if the applicant or licensee has by false or fraudulent representations obtained a license or, in performing or attempting to perform any of the actions specified in Chapter 61, Article 29 NMSA 1978, an applicant or licensee has: (1) made a substantial misrepresentation; (2) pursued a continued and flagrant course of misrepresentation; made false promises through agents, salespersons, advertising or otherwise; or used any trade name or insignia of membership in any real estate organization of which the licensee is not a member; (3) paid or received a rebate, profit, compensation or commission to or from any unlicensed person, except the licensee's principal or other party to the transaction, and then only with that principal's written consent; (4) represented or attempted to represent a qualifying broker other than a qualifying broker with whom the licensee is associated without the express knowledge and consent of that qualifying broker; (5) failed, within a reasonable time, to account for or to remit any money coming into the licensee's possession that belongs to others, commingled funds of others with the licensee's own or failed to keep funds of others in an escrow or trustee account or failed to furnish legible copies of all listing and sales contracts to all parties executing them; (6) been convicted in any court of competent jurisdiction of a felony or any offense involving moral turpitude; (7) employed or compensated, directly or indirectly, a person for performing any of the acts regulated by Chapter 61, Article 29 NMSA 1978 who is not a licensed qualifying broker or an associate broker; provided, however, that a qualifying broker may pay a commission to a qualifying broker of another state as provided in Section 61-29-16.1 NMSA 1978; (8) failed, if a qualifying broker, 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 the qualifying broker in a real estate transaction in a custodial, trust or escrow account, maintained by the qualifying broker 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 qualifying broker. Records relative to the deposit, maintenance and withdrawal of the funds shall contain information as may be prescribed by the rules of the commission. Nothing in this paragraph prohibits a 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. The minimum balance deposit shall not be considered commingling and shall not be subject to levy, attachment or garnishment. This paragraph does not prohibit a qualifying broker from depositing any deposit money or other money received by the qualifying broker in a real estate transaction with another cooperating broker who shall in turn comply with this paragraph; (9) failed, if an associate broker, to place as soon after receipt as is practicably possible in the custody of the associate broker's qualifying broker, after securing signatures of all parties to the transaction, any deposit money or other money entrusted to the associate broker by any person dealing with the associate broker as the representative of the qualifying broker; (10) violated a provision of Chapter 61, Article 29 NMSA 1978 or a rule promulgated by the commission; (11) committed an act, whether of the same or different character from that specified in this subsection, that is related to dealings as a qualifying broker or an associate broker and that constitutes or demonstrates bad faith, incompetency, untrustworthiness, impropriety, fraud, dishonesty, negligence or any unlawful act; or (12) been the subject of disciplinary action as a licensee while licensed to practice real estate in another jurisdiction, territory or possession of the United States or another country. B. An unlawful act or violation of Chapter 61, Article 29 NMSA 1978 by an associate broker, employee, partner or associate of a qualifying broker shall not be cause for the revocation of a license of the qualifying broker unless it appears to the satisfaction of the commission that the qualifying broker had guilty knowledge of the unlawful act or violation. History: 1953 Comp., § 67-24-29, enacted by Laws 1959, ch. 226, § 11; 1965, ch. 304, § 7; 1981, ch. 22, § 3; 1983, ch. 261, § 5; 1984, ch. 56, § 1; 1987, ch. 90, § 5; 1991, ch. 13, § 1; 2001, ch. 163, § 8; 2005, ch. 35, § 14; 2011, ch. 85, § 6. ANNOTATIONSThe 2011 amendment, effective July 1 2011, permitted the payment of a commission to a qualified broker or another state if, pursuant to Section 61-29-16.1 NMSA 1978, the nonresident broker has entered in to a transaction-specific contract with a resident broker and has consented to being sued in New Mexico. The 2005 amendment, effective January 1, 2006, permits the real estate commission to issue license with limitations or conditions if the applicant or licensee has obtained a license by false or fraudulent representations or performed or attempted to perform the prescribed acts specified in this section and provides that an unlawful act or violation of Chapter 61, Article 29 NMSA 1978 by an associate broker is not cause for revocation of a qualifying broker's license unless the qualifying broker had guilty knowledge of the act. The 2001 amendment, effective July 1, 2001, inserted the Subsection A and B designations and redesignated former Subsections A to K as Paragraphs A(1) to A(11); deleted "real estate" preceding "broker" throughout the section; in Subsection A, substituted "refuse to issue or may suspend" for "refuse a license for cause or suspend", and "an applicant or licensee has:" for "is deemed to be guilty of:" in the introductory language; substituted "with whom he is associated" for "with whom he is licensed" in Paragraph (4), inserted "after securing signatures of all parties to the transaction" in Paragraphs (8) and (9); deleted "in the interests of the public and in conformance with the provisions of Chapter 61, Article 29 NMSA 1978" from the end of Paragraph (10); substituted "committed an act" for "any other conduct" in Paragraph (11); and added Paragraph (12). The 1991 amendment, effective June 14, 1991, substituted "in Chapter 61, Article 29 NMSA 1978" for "herein" in the introductory paragraph; substituted the language beginning with "unlicensed person" for "person other than his principal" at the end of Subsection C; and made minor stylistic changes in Subsections E and K. Revocation for "substantial misrepresentations". — The commission may suspend a license on the grounds that the licensee misrepresented to prospective buyers both the size of the property in question and the age of the roof. Wolfley v. Real Estate Comm'n, 1983-NMSC-064, 100 N.M. 187, 668 P.2d 303. If the subjects of misrepresentations on application forms are material, i.e., "substantial misrepresentations", the real estate commission can, absent intervening equities, revoke the license even though there is no actual or intentional fraud. Padilla v. Real Estate Comm'n, 1987-NMSC-056, 106 N.M. 96, 739 P.2d 965. The test of whether a misrepresentation is substantial is if it operates as an inducement to the real estate commission to do that which it should not otherwise have done. Padilla v. Real Estate Comm'n, 1987-NMSC-056, 106 N.M. 96, 739 P.2d 965. Where a license to sell real estate was revoked for false or fraudulent representations in applications with respect to unpaid liens or judgments, but the real estate commission's findings and conclusions did not resolve in any meaningful way whether licensee intended to deceive and to induce the commission to act in reliance upon a misrepresentation of fact known by him to be untrue, and there were no specific findings and conclusions by the commission to afford the supreme court a clear understanding that the decision was based upon false representations relevant and material to facts bearing upon the good repute and competence of the licensee in the public interest, the cause was remanded to the commission with express directions to enter proper findings of fact and conclusions of law, together with a final order. Padilla v. Real Estate Comm'n, 1987-NMSC-056, 106 N.M. 96, 739 P.2d 965. Substantial evidence to support commission's suspension of broker's license based on Paragraph A(5). Elliott v. N.M. Real Estate Comm'n, 1985-NMSC-078, 103 N.M. 273, 705 P.2d 679. Broker to have knowledge of building code and zoning ordinances. — It is incumbent upon the broker to have a general knowledge of the building code and the zoning ordinances which deal with the particular property being offered for sale or which is being purchased. Amato v. Rathbun Realty, Inc., 1982-NMCA-095, 98 N.M. 231, 647 P.2d 433. Nonresident broker may share in commission. — This section modifies Sections 61-29-1 and 61-29-16 NMSA 1978 to the extent that a nonresident broker may, in a limited situation, share in a commission. He may only do so, however, through cooperation with a New Mexico licensed broker. Hayes v. Reeves, 1977-NMSC-092, 91 N.M. 174, 571 P.2d 1177. Generally, as to establishing custodial, trust or escrow accounts. — No regulation of the real estate commission requires a custodial, trust or escrow account prior to the receipt of funds appropriate for deposit in such account. McCaughtry v. N.M. Real Estate Comm'n, 1970-NMSC-143, 82 N.M. 116, 477 P.2d 292. Jurisdiction where landowner claims acting as broker. — Under Section 61-29-2 NMSA 1978 if a landowner represents to either the buyer or seller that he is acting as a broker, the real estate commission has jurisdiction over the transaction. Poorbaugh v. N.M. Real Estate Comm'n, 1978-NMSC-033, 91 N.M. 622, 578 P.2d 323. Hiring of note broker for sale of real estate contract. — Because the seller of a real estate contract, who hired a note broker to handle the sale, was not acting as a real estate broker during the sale, the commission lacked jurisdiction to revoke the seller's license for misrepresentation. Vihstadt v. Real Estate Comm'n, 1988-NMSC-003, 106 N.M. 641, 748 P.2d 14. Applicability of Paragraph A(3) prohibition. — The prohibition of Subsection C (now Paragraph A(3)) is applicable to a broker or salesman representing the seller of real estate giving the purchaser trading stamps, free down payments on the property, moving costs, etc., when it can be shown that the real estate broker or salesman gave one or more of the items listed to the purchaser of the property as an integral part of a transaction involving the purchase and sale of the property. 1963 Op. Att'y Gen. No. 63-28 (rendered prior to 1991 amendment). Payment of commission to buyer who is not principal prohibited. — Subsection C (now Paragraph A(3)) precludes a licensed salesman or broker from paying any portion of his commission to a buyer who is not his principal, regardless of disclosure to the principal of the arrangement. 1981 Op. Att'y Gen. No. 81-25 (rendered prior to 1991 amendment). In order to properly make sense of the reference in Subsection C (now Paragraph A(3)) to "paying," and to give effect to the legislative intent indicated by that reference, the words "to or" may be read into that subsection preceding "from any person." 1981 Op. Att'y Gen. No. 81-25 (rendered prior to 1991 amendment). Criminal Offender Employment Act to be followed in suspension or revocation action. — The provisions of the Criminal Offender Employment Act must be followed by the real estate commission in any action by the commission to suspend or revoke a broker's or salesperson's license because of a conviction of a felony or misdemeanor involving moral turpitude. 1982 Op. Att'y Gen. No. 82-02. Law reviews. — For article, " 'To Purify the Bar': A Constitutional Approach to Non-Professional Misconduct," see 5 Nat. Res. J. 299 (1965). For 1984-88 survey of New Mexico administrative law, 19 N.M.L. Rev. 575 (1990). Am. Jur. 2d, A.L.R. and C.J.S. references. — 12 Am. Jur. 2d Brokers §§ 10, 21 to 29. Bias of members of license revocation board, 97 A.L.R.2d 1210. Suspension or revocation of real estate broker's license on ground of discrimination, 42 A.L.R.3d 1099. Revocation or suspension of real estate broker's license for violation of statutes or regulations prohibiting use of unlicensed personnel in carrying out duties, 68 A.L.R.3d 530. Real estate broker's liability for misrepresentations as to income from, or earnings of, property, 81 A.L.R.3d 717. Validity and application of regulation prohibiting licensed real-estate broker from negotiating sale or lease with owner known to have exclusive listing agreement with another broker, 17 A.L.R.4th 763. Real-estate broker's rights and liabilities as affected by failure to disclose agreement to loan purchase money to purchaser, 17 A.L.R.4th 788. Revocation or suspension of real estate broker's license for conduct not connected with business as broker, 22 A.L.R.4th 136. Real estate broker's or agent's misrepresentation to, or failure to inform, vendor regarding value of vendor's real property, 33 A.L.R.4th 944. Grounds for revocation or suspension of license of real-estate broker or salesperson, 7 A.L.R.5th 474. 12 C.J.S. Brokers §§ 16, 19, 21 to 24.