NEW MEXICO RESIDENTIAL BUILDING CONTRACTOR
(GB-2) – 300 PRACTICE QUESTIONS WITH ANSWERS &
RATIONALES
1. Under New Mexico law, which of the following is required for a contractor to
file a mechanic's lien?
A) A written contract with the owner
B) A valid contractor's license at the time of the work
C) A notarized affidavit of completion
D) A court order
*Answer: B) A valid contractor's license at the time of the work
Rationale: New Mexico law requires a contractor to hold a valid license at the time the
work was performed in order to file a mechanic's lien. Failure to maintain a valid license
during the project invalidates the contractor's lien rights. This is a critical requirement that
many contractors overlook.
2. A GB-2 contractor is performing a residential project and discovers an
unmarked underground utility line. What is the contractor's legal obligation?
A) Continue working around it
B) Stop work immediately and call the utility locating service (811)
C) Remove the utility line
D) Cover it with gravel and continue
*Answer: B) Stop work immediately and call the utility locating service (811)
Rationale: New Mexico law requires contractors to call 811 (the national utility locating
service) before excavating. If an unmarked utility line is discovered, work must stop
immediately, and the contractor must contact the utility company or 811 to have the line
properly marked. Damaging an unmarked utility line can result in significant liability and
penalties.
,3. According to New Mexico CID regulations, which of the following is a valid
reason for license revocation?
A) A single minor code violation
B) Fraud or misrepresentation in obtaining the license
C) Failure to renew on time
D) Change of business address without notification
*Answer: B) Fraud or misrepresentation in obtaining the license
Rationale: The CID can revoke a contractor's license for fraud, misrepresentation, or deceit
in obtaining the license. A single minor code violation typically results in a fine, not
revocation. Failure to renew on time results in expiration, not revocation (the contractor
can reapply). Address changes must be reported but do not result in revocation.
4. What is the minimum amount of general liability insurance required for a New
Mexico GB-2 contractor?
A) $300,000 per occurrence
B) $500,000 per occurrence
C) $1,000,000 per occurrence
D) $2,000,000 per occurrence
**Answer: B) $500,000 per occurrence**
*Rationale: New Mexico requires GB-2 contractors to carry general liability insurance with
a minimum coverage of $500,000 per occurrence and $1,000,000 aggregate. This protects
the public from property damage or bodily injury caused by the contractor's work. The
insurance certificate must be provided to the CID upon request.
**5. A GB-2 contractor is working on a residential addition. The project is valued at
$75,000. What is the maximum down payment allowed?**
A) $15,000
B) $22,500
C) $25,000
D) $30,000
,**Answer: B) $22,500**
*Rationale: New Mexico law limits the down payment to 30% of the total contract price.
For a $75,000 project, 30% equals $22,500. This law protects consumers from contractors
who take large deposits and fail to perform work. Progress payments are allowed as work
is completed.
6. According to New Mexico law, how long does a contractor have to complete a
project if the contract does not specify a completion date?
A) 60 days
B) 90 days
C) A reasonable time based on the scope of work
D) 180 days
*Answer: C) A reasonable time based on the scope of work
Rationale: If a contract does not specify a completion date, New Mexico law requires the
contractor to complete the work within a "reasonable" time based on the scope and
complexity of the project. Courts consider factors such as the type of work, weather
conditions, and availability of materials. Best practice is to always include a specific
timeline in the contract to avoid disputes.
7. Which of the following is NOT a requirement for a valid mechanic's lien in New
Mexico?
A) The lien must be filed within 90 days of the last work
B) The lien must be recorded with the county clerk
C) The lien must be filed in the county where the property is located
D) The lien must be for more than $10,000
*Answer: D) The lien must be for more than $10,000
Rationale: New Mexico law has no minimum amount for filing a mechanic's lien. Even a
small claim can be filed as a mechanic's lien, provided it meets all other requirements. The
lien must be filed within 90 days, recorded with the county clerk in the property's county,
and a copy sent to the property owner.
, 8. A GB-2 contractor is bidding on a residential project. Which of the following
must be included in the bid?
A) The contractor's license number
B) A detailed scope of work
C) An estimated timeline and cost
D) All of the above
*Answer: D) All of the above
Rationale: A complete bid should include the contractor's license number, a detailed scope
of work, an estimated timeline, and the total cost. This provides transparency and helps
the owner make an informed decision. A bid is not a contract but becomes a binding
contract when accepted by the owner.
9. According to the NMBC, what is the minimum required width for a residential
front door?
A) 28 inches
B) 30 inches
C) 32 inches
D) 36 inches
*Answer: C) 32 inches
Rationale: The NMBC requires exterior doors to have a minimum clear opening of 32
inches for residential buildings. This ensures accessibility and emergency egress. The door
height must be at least 80 inches. Door frames must be properly anchored and weather-
sealed.
10. What is the minimum required distance between a residential wood-burning
stove and a combustible floor?
A) 6 inches
B) 12 inches
C) 18 inches
D) 24 inches
*Answer: C) 18 inches
Rationale: The NMBC requires a minimum clearance of 18 inches between a wood-
(GB-2) – 300 PRACTICE QUESTIONS WITH ANSWERS &
RATIONALES
1. Under New Mexico law, which of the following is required for a contractor to
file a mechanic's lien?
A) A written contract with the owner
B) A valid contractor's license at the time of the work
C) A notarized affidavit of completion
D) A court order
*Answer: B) A valid contractor's license at the time of the work
Rationale: New Mexico law requires a contractor to hold a valid license at the time the
work was performed in order to file a mechanic's lien. Failure to maintain a valid license
during the project invalidates the contractor's lien rights. This is a critical requirement that
many contractors overlook.
2. A GB-2 contractor is performing a residential project and discovers an
unmarked underground utility line. What is the contractor's legal obligation?
A) Continue working around it
B) Stop work immediately and call the utility locating service (811)
C) Remove the utility line
D) Cover it with gravel and continue
*Answer: B) Stop work immediately and call the utility locating service (811)
Rationale: New Mexico law requires contractors to call 811 (the national utility locating
service) before excavating. If an unmarked utility line is discovered, work must stop
immediately, and the contractor must contact the utility company or 811 to have the line
properly marked. Damaging an unmarked utility line can result in significant liability and
penalties.
,3. According to New Mexico CID regulations, which of the following is a valid
reason for license revocation?
A) A single minor code violation
B) Fraud or misrepresentation in obtaining the license
C) Failure to renew on time
D) Change of business address without notification
*Answer: B) Fraud or misrepresentation in obtaining the license
Rationale: The CID can revoke a contractor's license for fraud, misrepresentation, or deceit
in obtaining the license. A single minor code violation typically results in a fine, not
revocation. Failure to renew on time results in expiration, not revocation (the contractor
can reapply). Address changes must be reported but do not result in revocation.
4. What is the minimum amount of general liability insurance required for a New
Mexico GB-2 contractor?
A) $300,000 per occurrence
B) $500,000 per occurrence
C) $1,000,000 per occurrence
D) $2,000,000 per occurrence
**Answer: B) $500,000 per occurrence**
*Rationale: New Mexico requires GB-2 contractors to carry general liability insurance with
a minimum coverage of $500,000 per occurrence and $1,000,000 aggregate. This protects
the public from property damage or bodily injury caused by the contractor's work. The
insurance certificate must be provided to the CID upon request.
**5. A GB-2 contractor is working on a residential addition. The project is valued at
$75,000. What is the maximum down payment allowed?**
A) $15,000
B) $22,500
C) $25,000
D) $30,000
,**Answer: B) $22,500**
*Rationale: New Mexico law limits the down payment to 30% of the total contract price.
For a $75,000 project, 30% equals $22,500. This law protects consumers from contractors
who take large deposits and fail to perform work. Progress payments are allowed as work
is completed.
6. According to New Mexico law, how long does a contractor have to complete a
project if the contract does not specify a completion date?
A) 60 days
B) 90 days
C) A reasonable time based on the scope of work
D) 180 days
*Answer: C) A reasonable time based on the scope of work
Rationale: If a contract does not specify a completion date, New Mexico law requires the
contractor to complete the work within a "reasonable" time based on the scope and
complexity of the project. Courts consider factors such as the type of work, weather
conditions, and availability of materials. Best practice is to always include a specific
timeline in the contract to avoid disputes.
7. Which of the following is NOT a requirement for a valid mechanic's lien in New
Mexico?
A) The lien must be filed within 90 days of the last work
B) The lien must be recorded with the county clerk
C) The lien must be filed in the county where the property is located
D) The lien must be for more than $10,000
*Answer: D) The lien must be for more than $10,000
Rationale: New Mexico law has no minimum amount for filing a mechanic's lien. Even a
small claim can be filed as a mechanic's lien, provided it meets all other requirements. The
lien must be filed within 90 days, recorded with the county clerk in the property's county,
and a copy sent to the property owner.
, 8. A GB-2 contractor is bidding on a residential project. Which of the following
must be included in the bid?
A) The contractor's license number
B) A detailed scope of work
C) An estimated timeline and cost
D) All of the above
*Answer: D) All of the above
Rationale: A complete bid should include the contractor's license number, a detailed scope
of work, an estimated timeline, and the total cost. This provides transparency and helps
the owner make an informed decision. A bid is not a contract but becomes a binding
contract when accepted by the owner.
9. According to the NMBC, what is the minimum required width for a residential
front door?
A) 28 inches
B) 30 inches
C) 32 inches
D) 36 inches
*Answer: C) 32 inches
Rationale: The NMBC requires exterior doors to have a minimum clear opening of 32
inches for residential buildings. This ensures accessibility and emergency egress. The door
height must be at least 80 inches. Door frames must be properly anchored and weather-
sealed.
10. What is the minimum required distance between a residential wood-burning
stove and a combustible floor?
A) 6 inches
B) 12 inches
C) 18 inches
D) 24 inches
*Answer: C) 18 inches
Rationale: The NMBC requires a minimum clearance of 18 inches between a wood-
