No action for the collection of a commission or compensation earned by any person as a qualifying broker or an associate broker required to be licensed under the provisions of Chapter 61, Article 29 NMSA 1978 shall be maintained in the courts of the state unless such person was a duly licensed qualifying broker or associate broker at the time the alleged cause of action arose. In any event, suit against a member of the public as distinguished from any person licensed under Chapter 61, Article 29 NMSA 1978 shall be maintained only in the name of the qualifying broker.
History: 1953 Comp., § 67-24-33, enacted by Laws 1959, ch. 226, § 15. 2005, ch. 35, § 16.
ANNOTATIONSThe 2005 amendment, effective January 1, 2006, provides that no action to collect a commission or compensation by a person as a qualifying broker or an associate broker shall be maintained unless the person was licensed as a qualifying broker or an associate broker on the date cause of action arose and requires that suits against a member of the public be in the name of the qualifying broker.
Section upholds legislative intent that brokers be licensed. — A person who simply brings two parties together in a real estate transaction must be licensed to sue for the recovery of a commission. To rule otherwise would be to violate the clear intent of the legislature in requiring that real estate "brokers" or salespersons be licensed. Watts v. Andrews, 1982-NMSC-080, 98 N.M. 404, 649 P.2d 472.
Texas broker barred from collecting a commission. — Where plaintiff, who was a licensed real estate broker in Texas, knew that an unlisted ranch was for sale; plaintiff and defendants, who were licensed real estate brokers in New Mexico, orally agreed to work together as co-brokers in the sale of the ranch and to share the commission on the purchase price; plaintiff and defendants never entered into a transaction-specific written agreement to share the commission; and plaintiff brought the sellers and the buyers together with the assistance of defendants, plaintiff was barred from collecting a real estate commission, because plaintiff was acting as a broker without a valid New Mexico broker's license or a written, foreign broker's agreement in violation of Section 61-29-16 NMSA 1978. PC Carter Co. v. Miller, 2011-NMCA-052, 149 N.M. 660, 253 P.3d 950.
Meaning of "arose". — The word "arose" used in this statute is used in its usual and ordinary meaning and denotes past completed action, not past continuing action. Lakeview Invs., Inc. v. Alamogordo Lake Vill., Inc., 1974-NMSC-027, 86 N.M. 151, 520 P.2d 1096.
Person claiming commission must prove license. — The statute casts no burden upon a defendant to prove absence of a license but does place upon one claiming a real estate commission the burden of establishing that he was duly licensed when the alleged cause of action arose and the inadvertent statement relative to the burden of proof in Southwest Motel Brokers, Inc. v. Alamo Hotels, Inc., 1963-NMSC-091, 72 N.M. 227, 382 P.2d 707, overruled by Star Realty Co. v. Sellers, 1963-NMSC-140, 73 N.M. 207, 387 P.2d 319.
Finding that plaintiff held license required. — A judgment for recovery of a real estate commission without a finding that the plaintiff held either a broker's or salesman's license when the cause of action arose is erroneous. Watts v. Andrews, 1982-NMSC-080, 98 N.M. 404, 649 P.2d 472.
Section prohibits action in quantum meruit to recover value of services rendered by person who is required to have license, in the absence of such license. Bank of N.M. v. Freedom Homes, Inc., 1980-NMCA-064, 94 N.M. 532, 612 P.2d 1343.
An unlicensed real estate broker or salesperson cannot recover a commission in an action in quantum meruit. Watts v. Andrews, 1982-NMSC-080, 98 N.M. 404, 649 P.2d 472.
Suit by corporation. — Since an action to recover a real estate commission may only be brought in the name of the licensed broker, evidence showing corporation may be entitled to a license, and that an officer thereof had a license, was insufficient to enable corporation to bring suit in its own name. Star Realty Co. v. Sellers, 1963-NMSC-140, 73 N.M. 207, 387 P.2d 319.
Action for breach of contract. — This section did not prevent real estate broker from maintaining action for breach of contract where broker was not licensed at time he entered into exclusive sales representation agreement with defendant but became licensed prior to breach of this agreement by defendant. Lakeview Invs., Inc. v. Alamogordo Lake Vill., Inc., 1974-NMSC-027, 86 N.M. 151, 520 P.2d 1096.
In estimating the commission on an exchange of real estate the actual and not the trade value of the property received in exchange should be taken as the basis, unless the contract of employment provides for some other basis, such as a fixed and agreed valuation of the property given in exchange. Maine v. Garvin, 1966-NMSC-140, 76 N.M. 546, 417 P.2d 40.
Allegation of licensing effective against motion to dismiss. — Allegation that the party seeking relief was licensed at the time the work or service was performed satisfies the requirements of this section as against a motion to dismiss. Lakeview Invs., Inc. v. Alamogordo Lake Vill., Inc., 1974-NMSC-027, 86 N.M. 151, 520 P.2d 1096.
In order to satisfy the requirements of this section as against a motion to dismiss, the party seeking relief must allege that he was licensed at the time the work or service was performed. Bosque Farms Home Ctr., Inc. v. Tabet Lumber Co., 1988-NMSC-027, 107 N.M. 115, 753 P.2d 894.
Parol evidence rule is fully applicable together with all the exceptions recognized in connection with any other writing in connection with written listing agreements. Parol evidence may not be received when its purpose and effect is to contradict, vary, modify or add to a written agreement, but is generally admissible to supply terms not in the written contract, to explain ambiguities in the written agreement, or to show fraud, misrepresentations or mistake. Maine v. Garvin, 1966-NMSC-140, 76 N.M. 546, 417 P.2d 40.
Compensation rule distinguished from that in fraud. — The rule applicable in determining the right of an agent to recover compensation from his principal differs from that which is applied when fraud is claimed as between a vendor and purchaser. Maine v. Garvin, 1966-NMSC-140, 76 N.M. 546, 417 P.2d 40.
Am. Jur. 2d, A.L.R. and C.J.S. references. — 12 Am. Jur. 2d Brokers §§ 217 to 222.
Failure, when refusing offer to purchase land, to state, as ground therefor, broker's failure to introduce or disclose name of customer, as affecting right to assert such ground in defense of broker's action for compensation, 156 A.L.R. 605.
Rights and obligations of real estate broker employed to sell property as affected by option to purchase for himself, 164 A.L.R. 1378.
Real estate broker's right to commission on sale, exchange or lease of property listed without statement of price or other terms, 169 A.L.R. 380.
Want of license as affecting broker's recovery of compensation for services, 169 A.L.R. 767.
Condemnation of property as affecting broker's right to compensation, 170 A.L.R. 1422.
Subagent, right of broker as against employer to commission on sale by, 3 A.L.R.2d 532.
Relative rights and liabilities of vendor and his broker to down payment or earnest money forfeited by vendee for default under real estate contract, 9 A.L.R.2d 495.
Real estate broker's right to commission where purchaser refuses to go through with the executory contract because of reckless misrepresentation made to him by broker respecting property, 9 A.L.R.2d 504.
Right of real estate broker to commission where customer repudiates or fails to complete contract or promise which is oral or not specifically enforceable, 12 A.L.R.2d 1410.
Effect of statement of real estate broker to prospective purchaser that property may be bought for less than list price as breach of duty to vendor, so as to bar claim for commission, 17 A.L.R.2d 904.
What deviation in prospective vendee's proposal from vendor's terms precludes broker from recovering commission for producing a ready, willing, and able vendee, 18 A.L.R.2d 376.
Broker's right to commission on sales consummated after termination of employment, 27 A.L.R.2d 1348.
Nondisclosure or misrepresentation of sale price of other property as affecting broker's rights as against principal, 32 A.L.R.2d 728.
Liability of broker to prospective purchaser for refund of deposit or earnest money where contract fails because of defects in vendor's title, 38 A.L.R.2d 1382.
Broker's right to commission where owner sells property to broker's customer at less than stipulated price, 46 A.L.R.2d 848.
Conveyance of real property to mortgagee or lien holder as constituting "sale or exchange" rendering owner liable for commissions to broker having exclusive agency or exclusive right to sell, 46 A.L.R.2d 1116.
Broker's right to commission for selling part of property, 47 A.L.R.2d 680.
Liability of vendor's real-estate broker or agent to purchaser or prospect for misrepresenting or concealing offer or acceptance, 55 A.L.R.2d 342.
Broker's return of deposit to purchaser as waiver of right to demand commission from seller, 69 A.L.R.2d 1244.
Commission on sale rejected by principal because of buyer's fraud or misrepresentation, 79 A.L.R.2d 1055.
Licensed real estate broker's right to compensation as affected by lack of license on the part of partners, co-adventurers, employees, or other associates, 8 A.L.R.3d 523.
Real estate broker's right to compensation as affected by failure or refusal of principal's spouse to join in contract of sale, 10 A.L.R.3d 665.
Broker's right to commission from principal upon procuring third party taking an option, 32 A.L.R.3d 321.
Right of real estate broker to commission where listing contract is for sale of property and it is subsequently leased to one with whom broker had negotiated, 42 A.L.R.3d 1430.
Construction of provision in real estate broker's listing contract that broker shall receive commission on sale after expiration of listing period to one with whom broker has "negotiated" during listing period, 51 A.L.R.3d 1149.
Real estate broker's right to commission for procuring lessee where lease terminates before contemplated term, 54 A.L.R.3d 1171.
Necessity of having real estate broker's license in order to recover commission as affected by fact that business sold includes real property, 82 A.L.R.3d 1139.
Right of real estate broker to recover commission from seller-principal where buyer defaults under valid contract of sale, 12 A.L.R.4th 1083.
Real estate broker's right to recover commission from seller where sale fails because of seller's failure to deliver good title - modern cases, 28 A.L.R.4th 1007.
Real estate broker's rights and liabilities as affected by failure to disclose financial information concerning purchaser, 34 A.L.R.4th 191.
What constitutes financial ability to perform within rule entitling broker to commission for producing ready, willing, and able purchaser of real property, 87 A.L.R.4th 11.
12 C.J.S. Brokers §§ 132 to 135.