NEW MEXICO RESIDENTIAL BUILDING CONTRACTOR
(GB-2) – 200 PRACTICE QUESTIONS WITH ANSWERS &
RATIONALES
EXAM SECTION 1: NEW MEXICO CONSTRUCTION
INDUSTRIES DIVISION (CID) RULES (Questions 1-30)
1. What is the minimum bond amount required for a New Mexico GB-2 Residential
Building Contractor license?
A) $5,000
B) $10,000
C) $15,000
D) $20,000
**Answer: B) $10,000**
*Rationale: The New Mexico Construction Industries Division (CID) requires a $10,000
surety bond for a GB-2 Residential Building Contractor license. This bond protects the
public from financial loss due to contractor negligence or failure to complete a project.
2. How many years of work experience are required to qualify for a GB-2 license in
New Mexico?
A) 1 year
B) 2 years
C) 3 years
D) 4 years
*Answer: B) 2 years
Rationale: Applicants for a GB-2 license must have a minimum of 2 years of full-time work
,experience in residential building construction within the past 10 years. This experience
must be verified by a licensed contractor or employer.
3. Which New Mexico agency is responsible for issuing contractor licenses?
A) Department of Labor
B) Construction Industries Division (CID)
C) Department of Transportation
D) Environmental Department
*Answer: B) Construction Industries Division (CID)
Rationale: The New Mexico Construction Industries Division (CID), under the Regulation
and Licensing Department (RLD), is responsible for issuing contractor licenses,
administering exams, and enforcing construction codes.
4. How often must a GB-2 license be renewed in New Mexico?
A) Annually
B) Every 2 years
C) Every 3 years
D) Every 5 years
*Answer: A) Annually
Rationale: New Mexico contractor licenses, including the GB-2, must be renewed annually.
The renewal date is typically June 30 each year. Late renewals are subject to penalties and
fees.
5. What is the maximum penalty for contracting without a license in New Mexico?
A) $500 fine
B) $1,000 fine
C) $5,000 fine and/or imprisonment
D) License suspension only
,**Answer: C) $5,000 fine and/or imprisonment**
*Rationale: Contracting without a license in New Mexico is a misdemeanor punishable by
a fine of up to $5,000 and/or imprisonment of up to 6 months. The CID takes unlicensed
contracting seriously to protect consumers.
6. Which of the following is NOT a requirement to maintain a GB-2 license in New
Mexico?
A) Active bond
B) Liability insurance
C) Workers' compensation insurance (if applicable)
D) Passing a drug test
*Answer: D) Passing a drug test
Rationale: New Mexico does NOT require a drug test to maintain a contractor license.
Requirements include an active surety bond, general liability insurance, and workers'
compensation insurance if you have employees.
7. What is the statute of limitations for filing a claim against a contractor in New
Mexico?
A) 1 year
B) 2 years
C) 4 years
D) 6 years
*Answer: C) 4 years
Rationale: The statute of limitations for filing a construction defect claim in New Mexico is
4 years from the date the defect was discovered or should have been discovered. This is
important for homeowners and contractors regarding liability and warranty claims.
8. A GB-2 contractor in New Mexico may perform work on which type of
structure?
A) Commercial buildings up to 3 stories
, B) Residential structures up to 3 stories
C) Industrial buildings
D) High-rise condominiums
*Answer: B) Residential structures up to 3 stories
Rationale: The GB-2 Residential Building Contractor license allows work on residential
structures up to 3 stories above grade. The GB-98 is for commercial buildings. Residential
structures include single-family homes, townhomes, and residential condos up to 3 stories.
9. Which of the following is NOT a required part of a written contract for a
residential project in New Mexico?
A) Scope of work
B) Total contract price
C) Contractor's social security number
D) Timeline or completion date
*Answer: C) Contractor's social security number
Rationale: A written contract for a residential project must include the scope of work, total
contract price, timeline, and payment schedule. The contractor's social security number is
NOT required to be in the contract. The contractor's license number must be included.
10. What is the maximum down payment a contractor can collect on a residential
project in New Mexico?
A) 10% of the contract price
B) 15% of the contract price
C) 30% of the contract price
D) No legal limit
*Answer: C) 30% of the contract price
Rationale: New Mexico law prohibits contractors from collecting more than 30% of the
total contract price as a down payment or deposit before work begins. This law protects
consumers from contractors who take large deposits and fail to complete the work.
(GB-2) – 200 PRACTICE QUESTIONS WITH ANSWERS &
RATIONALES
EXAM SECTION 1: NEW MEXICO CONSTRUCTION
INDUSTRIES DIVISION (CID) RULES (Questions 1-30)
1. What is the minimum bond amount required for a New Mexico GB-2 Residential
Building Contractor license?
A) $5,000
B) $10,000
C) $15,000
D) $20,000
**Answer: B) $10,000**
*Rationale: The New Mexico Construction Industries Division (CID) requires a $10,000
surety bond for a GB-2 Residential Building Contractor license. This bond protects the
public from financial loss due to contractor negligence or failure to complete a project.
2. How many years of work experience are required to qualify for a GB-2 license in
New Mexico?
A) 1 year
B) 2 years
C) 3 years
D) 4 years
*Answer: B) 2 years
Rationale: Applicants for a GB-2 license must have a minimum of 2 years of full-time work
,experience in residential building construction within the past 10 years. This experience
must be verified by a licensed contractor or employer.
3. Which New Mexico agency is responsible for issuing contractor licenses?
A) Department of Labor
B) Construction Industries Division (CID)
C) Department of Transportation
D) Environmental Department
*Answer: B) Construction Industries Division (CID)
Rationale: The New Mexico Construction Industries Division (CID), under the Regulation
and Licensing Department (RLD), is responsible for issuing contractor licenses,
administering exams, and enforcing construction codes.
4. How often must a GB-2 license be renewed in New Mexico?
A) Annually
B) Every 2 years
C) Every 3 years
D) Every 5 years
*Answer: A) Annually
Rationale: New Mexico contractor licenses, including the GB-2, must be renewed annually.
The renewal date is typically June 30 each year. Late renewals are subject to penalties and
fees.
5. What is the maximum penalty for contracting without a license in New Mexico?
A) $500 fine
B) $1,000 fine
C) $5,000 fine and/or imprisonment
D) License suspension only
,**Answer: C) $5,000 fine and/or imprisonment**
*Rationale: Contracting without a license in New Mexico is a misdemeanor punishable by
a fine of up to $5,000 and/or imprisonment of up to 6 months. The CID takes unlicensed
contracting seriously to protect consumers.
6. Which of the following is NOT a requirement to maintain a GB-2 license in New
Mexico?
A) Active bond
B) Liability insurance
C) Workers' compensation insurance (if applicable)
D) Passing a drug test
*Answer: D) Passing a drug test
Rationale: New Mexico does NOT require a drug test to maintain a contractor license.
Requirements include an active surety bond, general liability insurance, and workers'
compensation insurance if you have employees.
7. What is the statute of limitations for filing a claim against a contractor in New
Mexico?
A) 1 year
B) 2 years
C) 4 years
D) 6 years
*Answer: C) 4 years
Rationale: The statute of limitations for filing a construction defect claim in New Mexico is
4 years from the date the defect was discovered or should have been discovered. This is
important for homeowners and contractors regarding liability and warranty claims.
8. A GB-2 contractor in New Mexico may perform work on which type of
structure?
A) Commercial buildings up to 3 stories
, B) Residential structures up to 3 stories
C) Industrial buildings
D) High-rise condominiums
*Answer: B) Residential structures up to 3 stories
Rationale: The GB-2 Residential Building Contractor license allows work on residential
structures up to 3 stories above grade. The GB-98 is for commercial buildings. Residential
structures include single-family homes, townhomes, and residential condos up to 3 stories.
9. Which of the following is NOT a required part of a written contract for a
residential project in New Mexico?
A) Scope of work
B) Total contract price
C) Contractor's social security number
D) Timeline or completion date
*Answer: C) Contractor's social security number
Rationale: A written contract for a residential project must include the scope of work, total
contract price, timeline, and payment schedule. The contractor's social security number is
NOT required to be in the contract. The contractor's license number must be included.
10. What is the maximum down payment a contractor can collect on a residential
project in New Mexico?
A) 10% of the contract price
B) 15% of the contract price
C) 30% of the contract price
D) No legal limit
*Answer: C) 30% of the contract price
Rationale: New Mexico law prohibits contractors from collecting more than 30% of the
total contract price as a down payment or deposit before work begins. This law protects
consumers from contractors who take large deposits and fail to complete the work.
