Key Takeaways
- NMREC can investigate complaints, conduct hearings, and impose disciplinary actions
- Practicing real estate without a license is a criminal offense in New Mexico
- Violations can result in license denial, suspension, revocation, fines, or required education
- Licensees have due process rights including notice and hearing before disciplinary action
- Inactivating a license does not prevent NMREC from taking disciplinary action
License Law Violations & Discipline
NMREC has authority to investigate complaints and take disciplinary action against licensees who violate the New Mexico Real Estate License Law (Chapter 61, Article 29 NMSA 1978).
Unlicensed Activity
Prohibition
It is unlawful for a person to engage in the business or act in the capacity of real estate associate broker or qualifying broker in New Mexico without a license.
Consequences
A person who engages in unlicensed activity:
- Is subject to the jurisdiction of the state
- Is subject to the administrative jurisdiction of NMREC
- Is subject to all penalties and remedies under the law
Important: Practicing real estate without a license is a criminal offense in New Mexico, not just an administrative violation.
Common Violations
Misrepresentation and Fraud
| Violation | Description |
|---|---|
| Material misrepresentation | False statements about important facts |
| Omission | Failing to disclose known material defects |
| Fraud | Intentional deception for personal gain |
| False advertising | Misleading marketing or claims |
Trust Account Violations
| Violation | Description |
|---|---|
| Commingling | Mixing client and broker funds |
| Conversion | Using client funds without authorization |
| Failure to deposit | Not depositing funds timely |
| Poor records | Inadequate documentation |
Agency and Disclosure Violations
| Violation | Description |
|---|---|
| Disclosure failures | Failing to provide required broker duties disclosure |
| Undisclosed dual agency | Acting for both parties without proper consent |
| Breach of duty | Violating duties owed to clients or all parties |
| Undisclosed interest | Failing to disclose personal interest |
Professional Conduct Violations
| Violation | Description |
|---|---|
| Practicing without license | Unlicensed activity |
| Practicing on expired license | Continuing after expiration |
| Advertising violations | Non-compliant marketing |
| Failure to supervise | Qualifying broker not supervising associate brokers |
Disciplinary Process
Investigation Phase
- Complaint filed with NMREC (or NMREC initiates investigation)
- Investigation conducted by commission staff
- Evidence gathered (documents, interviews, audits)
- Determination made whether to proceed
Hearing Process
If NMREC proceeds with disciplinary action:
| Step | Description |
|---|---|
| Notice | Licensee notified of charges |
| Hearing | Formal hearing before administrative law judge |
| Evidence | Both sides present evidence |
| Decision | Commission issues written decision |
| Appeal | Licensee may appeal to court |
Due Process Rights
Licensees have the right to:
- Notice of charges
- Hearing before adverse action
- Representation by attorney
- Present evidence and witnesses
- Appeal unfavorable decisions
Appeal Timeline
To appeal, a licensee must file a request for a hearing within 20 days from the date of the commission's decision.
Disciplinary Actions
NMREC may impose various sanctions:
| Action | Description |
|---|---|
| Denial | Refuse to issue license |
| Suspension | Temporary loss of license |
| Revocation | Permanent loss of license |
| Reprimand | Formal warning |
| Fine | Monetary penalty |
| Probation | Conditional license with restrictions |
| Required education | Mandatory additional training |
Factors Considered
| Factor | Impact |
|---|---|
| Severity of violation | More serious = harsher penalty |
| Prior disciplinary history | Repeat violations = stricter |
| Harm to consumers | Consumer damage = more serious |
| Cooperation | Cooperation may reduce penalty |
| Remediation | Steps taken to correct issue |
Inactive License and Discipline
Key Point: The voluntary inactivation of a license does not prevent NMREC from taking disciplinary action against that license.
Going inactive does not shield a licensee from:
- Pending investigations
- Disciplinary proceedings
- Sanctions for past conduct
In New Mexico, practicing real estate without a license is:
What rights does a New Mexico licensee have before NMREC takes disciplinary action?
If a licensee voluntarily inactivates their license while under investigation, what happens?
Which of the following is NOT a disciplinary action NMREC can impose?
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