Source: https://ipropertymanagement.com/laws/new-mexico-security-deposit
Timestamp: 2020-04-08 17:36:18
Document Index: 136206777

Matched Legal Cases: ['§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47']

New Mexico Security Deposit Law [2020]: Refunds + FAQs
New Mexico landlords have a right to require a deposit from tenants before they occupy a rental unit. It’s meant to protect them in the instance a tenant causes financial loss during their tenancy. The state’s security deposit law provides protections to landlords and tenants alike.
Maximum Amount: 1 months’ rent
Duration for Return: 30 days after end of lease or move-out, whichever comes first
Penalty for Late Returns: Landlord forfeits all rights to deposit
Security Deposit Maximum in New Mexico
New Mexico landlords can charge the following deposit:
Lease Agreement Under a Year: A landlord should charge a deposit that is no more than one month’s rent (NMSA § 47-8-18(A)(2)).
Lease Agreement a Year of More: A landlord can charge a deposit that is more than one month’s rent (NMSA § 47-8-18(A)(1)).
The landlord must pay interest on the deposit if the tenant was charged more than one month’s rent (NMSA § 47-8-18(A)(1)).
New Mexico landlords must follow certain procedures when returning a tenant’s security deposit (NMSA § 47-8-18(C)):
Written Notice: A landlord must provide the tenant with a written itemized list of each deduction and the charge for each if making deductions.
30-Days Time-frame: A landlord has 30 days from the tenancy termination or move-out date, whichever occurs later, to return the deposit. The written itemized list of deductions should be included, if relevant.
Delivery: The landlord is required to mail the statement and any security deposit payment to the last known address of the tenant.
New Mexico landlords may hold all, or a portion of a tenant’s security deposit for the following reasons (NMSA § 47-8-18(C)):
If a landlord fails to comply with the deposit return requirements (NMSA § 47-8-18(D)):
Forfeit the right to withhold any portion of the security deposit
Forfeit the right to bring a counterclaim against the tenant to recover the deposit owed
Forfeit the right to take independent action against the tenant for damages to the rental property.
Have to cover tenant’s court costs and attorneys’ fees
Bad Faith Security Deposit Retention
A landlord who in bad faith withholds a tenant’s security deposit will have to pay that tenant a civil penalty of two hundred fifty dollars ($250) (NMSA § 47-8-18(E)).
If a rental property changes ownership, a New Mexico landlord must either:
Transfer the security deposit to the new owner and send tenants a written notification informing tenants of the transfer.
Return the security deposits to the tenant minus any legal deductions; notify the new owner that the tenants’ security deposits has been returned to them.
Tips for New Mexico Landlords on the Right Practices for Security Deposits
If the lease term is less than a year, charge one month’s rent for a deposit, but more if the lease is over a year
Withhold security deposits for unpaid rent, repair work, utility and other costs related to a breach of the lease agreement
Knowing New Mexico’s security deposit law should be something that both landlord and tenant prioritize. Landlords should remain in compliance with the state’s security deposit law and work to protect their interests in the process. Tenants should adhere to their lease obligations if they want a refund at the end of their lease term. New Mexico security deposit statutes can be found in NM Stat § 47-8-18.