New Mexico Real Estate Practices
- Attorney Involvement
- Cancellation/Commitment Fee
- Certificate of Release (of Mortgage)
- Joinder of Spouses
- Mortgage Tax
- Payment Customs
- Policy Countersignatures
- Real Estate Taxes
- Search and Examination Fees
- Search Requirements
- Security Instruments (Deed of Trust vs. Mortgage)
- Standard Exceptions and Requirements
- State-specific Policy Variations
- Title Insurance Form and Filing Regulations
- Transfer Taxes
- Withholding Taxes
- Witness Requirements
Please describe any requirements under applicable state law for attorney, abstractor or other special professional involvement, for example, in the search, examination, opinion of title, signing, closing, disbursement, recording, preparation of documents, and/or policy-issuance.
Title insurance agents provide universal, comprehensive, and complete service on all aspects of escrow and title in the closing of a real estate transaction. No state law requires the involvement of an attorney, abstractor or other special professional in any aspect of this process. Attorneys are infrequently involved in a typical residential transaction in either a representative or closing agent capacity. Some agents choose to contract closing deed and real estate contract document preparation to attorneys. Attorneys may be involved in a representative capacity for a party for commercial transactions, but usually not as closing agent.
Does your state permit or require a cancellation fee or commitment fee upon cancellation?
Title insurance regulations permit a title insurance agent to charge an unspecified “reasonable and appropriate” fee for cancellation of an issued title insurance binder/ commitment. See Rule 184.108.40.206B NMAC. Due to market pressures, it is rarely charged or enforced in practice.
Certificate of Release (of Mortgage)
If anyone other than the lender (such as a title agent, settlement agent, underwriter or attorney) has the authority to release the security instrument, please describe.
Title insurance underwriters (not agents) have the authority pursuant to state statute to execute and record releases of mortgages or deeds of trust subsequent to a 90-day period after payment in full of the mortgage or deed of trust and upon 10-day prior written notice to the lender. See Section 48-7-4.1 NMSA 1978.
Please describe the kinds of deeds that are customary for commercial and residential transactions. Please describe the kinds of deeds that are generally not insurable.
The available kinds of deeds are warranty deed, special warranty deed and quitclaim deed. The statutory forms of these deeds are found at Section 47-1-44 NMSA 1978. The warranty deed provides general warranty covenants as defined by state statute (Section 47-1-37 NMSA 1978) and is acceptable and customary for all commercial and residential transactions. The special warranty deed provides extremely limited warranty covenants. (See Section 47-1-38 NMSA 1978). The quit claim deed is sufficient to convey any title interest in the real property held by the grantor, but without any warranty covenants whatsoever. A quitclaim deed will not convey after-acquired title. Use of the special warranty deed is growing especially by sophisticated sellers in commercial transactions. Quitclaim deeds are common in governmental sales or transfers and in gift or intra-family transactions. In addition, personal representative deeds and special master deeds are usually in the nature of quitclaim deeds, even if they are not called such. Acceptance of special warranty deeds and quitclaim deeds in their various forms for insurability purposes is becoming more common; absent special circumstances, those forms of deeds are acceptable for insurability. If you have questions in a particular transaction about the kind of deed, please contact your underwriter.
Joinder of Spouses
If a non-title holding spouse is required to join in the execution of a deed or a security instrument, please describe. Any analogous rights, such as those in a civil union or equivalent, should also be addressed.
New Mexico is a community property state. All property acquired by husband and wife is presumed to be community property. Sections 40-3-8B and 40-3-12A NMSA 1978. Joinder of title-holding spouse is required by state statute in the execution of a conveyance deed or a security instrument. If joinder is lacking, the transaction may be ratified by the non-joining title-holding spouse, otherwise the deed or security instrument is void. See Section 40-3-13 NMSA 1978. Joinder of the non-title holding spouse is typically added to a conveyance deed and to the security instrument “pro forma”. No analogous rights or issues with partners to a civil union or equivalent. NM does not currently recognize civil unions or equivalent. It is expected but unclear how NM will recognize foreign civil unions lawfully established in another state and apply its law for conveyance of real property within the state to such civil unions.
Is there a mortgage tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe.
Who customarily pays for:
(a) Owner’s Policy?
(b) Transfer Tax & Recording Fee?
(c) Survey Charges?
(d) Closing/Settlement Fees?
(a) Seller, except in Los Alamos County, but always subject to negotiation between the parties in the sales/ purchase agreement.
(b) No transfer tax in NM. Recording fees are negotiable, but are typically split between the parties with the seller paying the recording fee for the deed and release of existing seller's mortgage and the purchaser paying all recording fees associated with mortgage, deed of trust and any other recorded loan documents.
(c) Typically, seller will pay for an Improvement Location Report (ILR) which is a discounted type of surveyor product for improved residential property. Survey charges are negotiable but customarily paid by the seller for NM boundary surveys or ALTA/ ASCM surveys where an ILR is not acceptable to the title insurance agent or for commercial transactions.
(d) Usually split equally between seller and purchaser.
Please describe any statutory or regulatory requirements for countersignatures in order to issue the policy (for example, residency requirements).
Countersignatures on policies are customarily signed by a NM licensed person appointed by the title insurance underwriter.
Real Estate Taxes
Please describe the general tax year, due dates, and delinquency dates, including lien dates and payment cycle.
Real property ad valorem taxes are a super-priority lien under state statute as of January 1 of each calendar year. See Section 7-38-48 NMSA 1978. Assessments of the value of real property are mailed to property owners each April. Taxes may be paid in two equal installments. Tax bills are mailed to property owners each October. The first half payment installment is due on November 10 and is delinquent after December 10. The second half payment installment is due on April 10 of the following year and is delinquent after May 10. Property with unpaid taxes for 3 years or more as of each June 30 is subject to being sold at a tax auction. Section 7-38-60 NMSA 1978.
Search and Examination Fees
Is it permissible and/or customary to charge a separate search and/or examination fee, and under what circumstances? If your jurisdiction is all-inclusive, please state that.
NM’s title insurance premium is a promulgated all-inclusive rate and no separate charge for a title search and examination fee for a policy is permitted. Section 59A-30-6A NMSA 1978. Title insurance agents may provide other non-regulated ancillary title search and examination services such as title searches and reports for an unregulated fee negotiated between the parties.
Is there a minimum period of time for a title search required: (a) by state law, (b) pursuant to marketable record title acts, or (c) by any other applicable title examination standards (e.g., state bar association)? Please respond to each category. If a minimum search period exists for any category, please state it.
No minimum title search period is required by state law, marketable record title acts or other applicable title examination standards. See Section 59A-30-11A NMSA 1978. NM law and regulations require all title insurance agents to own, operate or control a title plant with at least 20 years of historical real estate records, which is certified by the state Insurance Division. See Section 59A-12-13 NMSA 1978.
Security Instruments (Deed of Trust vs. Mortgage)
Please describe the customary and permissible form(s) of security instruments used in your state.
Who can be listed as the trustee on the Deed of Trust (e.g., residency and/or natural person requirements, etc.)? Can an underwriter or title agent be designated as the trustee, and, if so, is it customary?
Mortgage has been historically customary but use of Deed of Trust is expanding. Deed of Trust is permissible under state statute on all loan transactions except for farm, dairy and ranch properties and minerals (including oil and gas) that are not severed from the real estate. See Section 48-10-3H NMSA 1978.
Standard Exceptions and Requirements
Please identify the standard exceptions and requirements that are customarily used in your state.
Standard exceptions are promulgated by the Superintendent of Insurance and cannot be deleted, modified, changed or amended other than in accordance with the provisions of the New Mexico Title Insurance Regulations.
Rights or claims of parties in possession not shown by the public records.
Easements, or claims of easements, not shown by the public records.
Encroachments, overlaps, conflicts in boundary lines, shortages in area, or other matter which would be disclosed by an accurate survey and inspection of the premises.
Any lien, claim or right to a lien, for services, labor or material heretofore or hereafter furnished, imposed by law and not shown by public records.
Community property, survivorship or homestead rights, if any, of any spouse of the insured (or vestee in a leasehold or loan policy).
Water rights, claims or title to water.
Taxes for the year ____, and thereafter. (See Rule 220.127.116.11 NMAC.)
Defects, liens, encumbrances, adverse claims or other matters, if any, created first appearing in the public records or attaching subsequent to the effective date hereof but prior to the date the proposed insured acquires for value of record the estate or interest or mortgage thereon covered by this commitment.
The NM standard exceptions are promulgated by Rule 18.104.22.168A NMAC and cannot be changed, varied or amended.
State-specific Policy Variations
If there are state-specific changes to the provisions in the ALTA policies (e.g., Arbitration, Minerals), please describe.
Unilateral exercise of mandatory arbitration clause contained within ALTA policy forms has been found unconstitutional under NM case law. Arbitration clauses from ALTA policy forms are amended by a narrative note in Schedule B of the policy which states: "In compliance with Subsection D of 22.214.171.124 NMAC, the company hereby waives its right to demand arbitration pursuant to the title insurance arbitration rules of the American arbitration association. Nothing herein prohibits the arbitration of all arbitrable matters when agreed to by both the company and the insured." Otherwise, New Mexico has adopted the ALTA 2006 owner's and loan policy forms as its promulgated forms.
Title Insurance Form and Filing Regulations
Please describe the form and/or rate filing requirements, if any, related to policies and endorsements. Please describe any applicable rating bureau.
All forms (commitments, policies and endorsements as well as all other title insurance forms such as Closing Protection Letter) and all rates are promulgated by the Superintendent of Insurance. No exceptions or deviations of any forms or rates are permitted. See Rule 126.96.36.199 NMAC. Table of all promulgated forms are available at Rule 188.8.131.52 NMAC and all approved forms of commitments, policies, endorsements and other title insurance forms are available at Rule 13.14.18. NMAC et seq. No rating bureau. Rates are established by Superintendent of Insurance by order subsequent to biennial title insurance hearing. Standard rates are set forth in Rule 13.14.9 NMAC and endorsement rates are set forth in Rule 13.14.10 NMAC. The New Mexico Administrative Code (NMAC) is available at nmcpr.state.nm.us/NMAC/.
Is there a transfer tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe.
Is usury coverage available?
No. Not promulgated coverage. Coverage is not necessary. Usury statutes were repealed in 1983.
What are your state’s requirements, if any, with regard to withholding proceeds from a sale, similar to but not including FIRPTA?
No state requirements.
Are witnesses required on a deed or security instrument? If so, please describe.