1. A. When an aggrieved person claims a pecuniary loss caused by a state-licensed qualifying broker or associate broker based upon fraud, knowing or willful misrepresentation or wrongful conversion of funds entrusted to the qualifying broker or associate broker, involving a transaction for which a qualifying broker's or an associate broker's license is required and which arose out of or during the course of a transaction involving the sale, lease, exchange or other disposition of real estate or property management, where the cause of action arose on or after July 1, 1980, that person may, within two years after obtaining a final judgment based upon fraud, knowing or willful misrepresentation or wrongful conversion of funds entrusted to the qualifying broker or associate broker from a court of competent jurisdiction, file a verified petition with the commission for recovery pursuant to the Real Estate Recovery Fund Act. The real estate recovery fund reimburses the claimant for unpaid actual damages included in the judgment, but not more than fifty thousand dollars ($50,000) per judgment regardless of the number of persons aggrieved or parcels of real estate involved in the transaction. The aggregate amount recoverable by all claimants for losses against any one licensee during one calendar year shall not exceed one hundred thousand dollars ($100,000).
2. B. A copy of the verified petition with the judgment attached shall be served upon the commission by United States postal service certified return receipt or in the manner provided by law for service of a civil summons.
3. C. The commission shall serve the petition and notice of hearing on the licensee in substantially the same manner as required pursuant to the Uniform Licensing Act [61-1-1 to 61-1-31 NMSA 1978].

4. D. The commission shall conduct a hearing on the petition after service of the petition upon the commission and the licensee. At the hearing, the petitioner shall be required to show that the petitioner:

   1. (1) is not the spouse of the judgment debtor, the personal representative of the spouse or related to the third degree of consanguinity or affinity to the licensee whose conduct is alleged to have caused the loss;
   2. (2) has complied with all the requirements of the Real Estate Recovery Fund Act; and
   3. (3) has a judgment that is not covered by a bond, insurance, surety agreement or indemnity agreement.
5. E. At the hearing, the licensee shall be permitted to raise all affirmative defenses.

History: Laws 1980, ch. 82, § 4; 1987, ch. 90, § 7; 2005, ch. 35, § 18; 2021, ch. 106, § 2.

ANNOTATIONS

The 2021 amendment, effective July 1, 2021, clarified the procedures for recovery pursuant to the Real Estate Recovery Fund Act, and increased recovery limits; in Subsection A, after "disposition of real estate", added "or property management", after "qualifying broker or associate broker", deleted "and the termination of all proceedings, including appeals in connection with the judgment, file a verified petition with the commission for payment", after "from", added "a court of competent jurisdiction, file a verified petition with the commission for recovery pursuant to the Real Estate Recovery Fund Act", after "The real estate recovery fund", added "reimburses the claimant", after "for", added "unpaid", after "included in the judgment", deleted "and unpaid", after "but not more than", deleted "ten thousand dollars ($10,000)" and added "fifty thousand dollars ($50,000)", after "licensee", added "during one calendar year", and after "shall not exceed", changed "thirty thousand dollars ($30,000)" to "one hundred thousand dollars ($100,000)"; in Subsection B, after "A copy of the", added "verified", after "petition", added "with the judgment attached", and after "upon the commission", added "by the United States postal service certified return receipt or"; added new Subsection C and redesignated former Subsection C as Subsection D; in Subsection D, after "upon the commission", added "and the licensee", deleted former Paragraphs C(3) through C(5) and redesignated former Paragraph C(6) as Paragraph D(3), in Paragraph D(3), deleted subsection designation "(a)" and deleted former Subparagraphs C(6)(b) and C(6)(c); and added Subsection E.

The 2005 amendment, effective January 1, 2006, provides that a person who has obtained a judgment against a qualifying broker or an associate broker under this section may petition the real estate commission for payment from the real estate recover fund.

Am. Jur. 2d, A.L.R. and C.J.S. references. — Real estate broker's rights and liabilities as affected by failure to disclose financial information concerning purchaser, 34 A.L.R.4th 191.

Real-estate broker's liability to purchaser for misrepresentation or nondisclosure of physical defects in property sold, 46 A.L.R.4th 546.