Landlord Atlas

What are the security deposit rules in New Mexico?

Verified July 11, 2026 All New Mexico topics →

New Mexico caps security deposits at one month's rent for any rental agreement shorter than one year — including month-to-month tenancies — while annual leases have no numeric cap but trigger a rare interest rule: if an annual-lease deposit exceeds one month's rent, the landlord must pay the tenant interest on it every year.

The deposit, less an itemized written list of lawful deductions (never normal wear and tear), is due back within 30 days of the later of lease termination or the tenant's departure, and mailing the statement and refund to the tenant's last known address counts as compliance. A landlord who misses the 30-day statement forfeits the entire right to withhold, loses any counterclaim or independent damages action, and owes the tenant's court costs and attorney's fees; bad-faith retention adds a $250 civil penalty. There is no escrow or separate-account requirement.

New Mexico security deposits at a glance

Maximum deposit 1 month's rent — The one-month cap applies only to rental agreements of a duration less than one year, which includes month-to-month residencies (NMSA 47-8-18(A)(2)). Under an annual rental agreement there is no numeric cap — the deposit must be 'reasonable' — but if it exceeds one month's rent the owner must pay the resident interest annually (47-8-18(A)(1)).
Return deadline 30 days
Deadline conditions Within thirty days of the date of termination of the rental agreement or resident departure, whichever is later (47-8-18(C)). If any portion is retained, the owner must deliver an itemized written list of deductions and the balance within that window. The owner is deemed to have complied by mailing the statement and any payment required to the resident's last known address.
Itemization required Yes
Itemization rules In the event actual cause exists for retaining any portion of the deposit, the owner shall provide the resident with an itemized written list of the deductions and the balance, if any, within the 30-day window (47-8-18(C)). Deductions are limited to rent, damages from noncompliance with the rental agreement or Section 47-8-22, unpaid utilities, repair work and other legitimate damages — never normal wear and tear.
Separate account required No
Interest owed to tenant Yes
Account & interest rules Conditional and narrow: interest is owed only under an ANNUAL rental agreement where the owner demands or receives a deposit greater than one month's rent; the owner must then pay the resident annually 'an interest equal to the passbook interest permitted to savings and loan associations in this state by the federal home loan bank board on such deposit' (47-8-18(A)(1)). Deposits of one month or less, and all deposits under agreements shorter than one year, carry no interest duty. The rate reference is an anachronism — the Federal Home Loan Bank Board was abolished in 1989 and no successor formula was ever enacted — but the duty itself remains on the books.
Pet deposits No pet-deposit statute exists. A refundable pet deposit is a 'deposit' under the 47-8-3 definition (a pledge to abide by the rental agreement), so it counts toward the one-month cap on agreements under one year and follows the same 30-day return, itemization and penalty rules.
Non-refundable fees allowed Not addressed by statute
Penalty for violation An owner who fails to provide the written deduction statement and balance within thirty days forfeits the right to withhold any portion of the deposit, forfeits the right to assert any counterclaim in an action to recover the deposit, is liable for the resident's court costs and reasonable attorneys' fees, and forfeits the right to bring an independent action against the resident for damages to the property (47-8-18(D)). An owner who in bad faith retains a deposit is additionally liable for a civil penalty of $250 payable to the resident (47-8-18(E)).
Tenant forwarding-address duty No affirmative statutory duty. The owner is deemed to have complied with the deposit-return section by mailing the itemized statement and any payment to the resident's last known address (47-8-18(C)), so a resident who leaves no forwarding address bears the practical risk of the refund going to the old address.

Notes and caveats

Encoding decisions: max_deposit.months_rent = 1 with the under-one-year condition carried in conditions, because the flat statements circulating ('NM caps deposits at one month' or 'NM has no deposit cap') are each half-wrong — 47-8-18(A) is a split regime. interest_required = true because the duty is statutory and load-bearing for annual leases over one month, with interest_rules confining it; the passbook/FHLBB rate reference is a dead-letter anachronism (agency abolished by FIRREA in 1989) and no NM statute supplies a successor rate — do not print a percentage. 47-8-18 last amended by Laws 1989, ch. 340 (history: 1975/1985/1989); 2025 edition text confirmed identical, and 2025 SB 267 did not touch it. 47-8-18(B): prepaid last month's rent is not a deposit and a deposit may not be construed as prepaid rent. Verified negatives from a full-chapter sweep of the official RLD compilation: no separate/trust-account or escrow rule, no pet-deposit provision, no tenant forwarding-address duty. nonrefundable_fees_allowed is null: UORRA neither authorizes nor bans nonrefundable fees, but post-SB 267 (Laws 2025, ch. 122, eff. 2025-06-20) any fee must be disclosed in the published listing (47-8-19.1) and charging fees not in the rental agreement or listing is an unfair or deceptive trade practice under the amended Unfair Practices Act — a real constraint on 'nonrefundable fee' drafting worth page copy.

Statute citations

How this record was verified: Verbatim reads of two independent official documents, each downloaded and text-extracted in full: (1) the NM Regulation & Licensing Department's official UORRA compilation PDF (rld.nm.gov, 2019 edition) for sections 47-8-15 (pre-2025 baseline), 47-8-18, 47-8-24, 47-8-37 and full-chapter negative sweeps (no escrow/interest-account rule, no grace period, no pet-deposit statute, no frequency limit); and (2) the final (enrolled, SJC substitute) version of 2025 SB 267 on nmlegis.gov (Laws 2025, ch. 122, signed 2025-04-08, effective 2025-06-20) for the current text of 47-8-15 (5% late fee), new sections 47-8-19.1 to 47-8-19.4, and amended 47-8-48. Every load-bearing figure reconciled against FindLaw (mirror stamped current 2024-01-01) and Justia 2025-edition amendment notes; the two officials agree with each other and the mirrors on the 1-month deposit cap for sub-annual agreements, annual-lease interest trigger, 30-day return, $250 bad-faith penalty, 5% late fee and its notice-to-assess mechanic, 30-days-before-the-rental-date increase rule, and 24-hour written entry notice. Section 47-8A-1 (rent control preemption) initially verified on two mirrors reconciled verbatim (Justia + FindLaw) because the official host nmonesource.com returns HTTP 403 to automated fetches; a same-day (2026-07-11) in-app browser-pane session then read the official compiled code directly on nmonesource.com (NMSA Unannotated, Chapter 47), sight-verifying 47-8A-1 verbatim (subsections A-C, History: Laws 1991, ch. 23, § 1), the compiled 47-8-15 text including the 5% subsection (D) and the 2025 ch. 122 history line, the compiled section numbers 47-8-19.1 through 47-8-19.4, and the unamended history lines of 47-8-18 (1975/1985/1989) and 47-8-24 (1975/1995) — all matching the encoding. Pending-bill sweep 2026-07-11: 2026 regular session (30-day) adjourned sine die 2026-02-19; SB 138 (repeal rent control prohibition) died in committee (Action Postponed Indefinitely, confirmed on the official nmlegis.gov bill page); no UORRA bill touching the four topics passed.