NM Real Estate Commission Adopts New Rules Effective January 1, 2019
If you are a Qualifying Broker or Associate Broker, you need to read this.
If you manage residential rental property, you need to read this.
If you are a Qualifying Broker or Associate Broker that manages residential rental property, you need to read this.
On October 29th, the New Mexico Real Estate Commission adopted new rules, several of which have a direct impact on residential property management. These newly adopted rules go into effect on January 1, 2019. Below is a summary of rules, provided by Bill Hallet, Chair of the Property Management Advisory Committee, specifically affecting property management in New Mexico.
The Apartment Association of New Mexico will be revising the residental lease agreement to accommodate the delivery of the NM Uniform Owner Resident Relations Act as well as create a link for our members to deliver that electronically and avoid costs associated with printed hard copies. Printed copies will still be available, if needed. All of these steps will be effective well before the Janaury 1st, and members will be notified as soon as the new tools are available.
Self-reporting audit declaration
This remains in Part 23 (Trust Accounts) but is worded differently. QBs must declare to the REC that they are offering property management services, and that they are responsible for everything. Then, they must maintain in their office all the records that we had asked be submitted annually to the REC, including monthly trust account reconciliations (including three-way reconciliation), and make these records available upon request. Failure to have available for the REC makes the broker subject to disciplinary action.
So, bottom line, instead of submitting it annually, QB must still do it but must retain it until asked.
QBs and ABs offering property management must still take the 6-hour UORRA CE class once every three years. In addition, QBs must take 12 hours, and ABs must take 6 hours, of approved property management CE classes every three years.
All brokers hiring vendors or employees to perform maintenance, repair or renovation activities shall use only vendors and employees who are certified, licensed, insured and/or bonded as required by local, state and/or federal laws.
Management and resident agreements
QBs must include, either in hard copy form or electronically, a copy of the UORRAct with every residential management agreement and every residential tenancy agreement. QB must receive confirmation of delivery.
Assignment of management agreements
QBs must execute a written assignment agreement, with owner's written consent, before transferring a management agreement to another brokerage. Otherwise, receiving QB must execute a new management agreement.
We have done away with "short term" rentals; it is all under "Vacation Rentals" now. The person occupying a vacation rental is now called a "renter." Management agreement must specific who is to collect GRTaxes and local taxes.
And finally, for the benefit of our vacation rental brokers, there are these new three specific languages
- Compensation retained by or paid to third parties who engage in advertising and/or taking reservations for vacation rental properties shall not be considered to be in violation of Section 61-29-12 A(3) of the real estate license law which prohibits real estate brokers from paying or receiving rebate, profit, compensation or commission to or from any unlicensed person.
- If a broker uses an online travel agent or third party advertising entity which prohibits disclosure of the brokerage name and/or telephone number as registered with the commission, such displays are exempt from the disclosure requirement in 126.96.36.199B NMAC. In this event, the broker shall ensure that the tenant [... should be renter, but it looks like this word got past everyone ...] receives this disclosure promptly upon completing a rental reservation.
- The broker shall not be required to deliver a copy of the Uniform Owner Resident Relations Act to a renter of a vacation rental.
In addition to these three new statements, the Part 1 definition of "Property management" now includes: "Advertising and taking reservations for vacation rental properties shall not be considered property management.