New Mexico Security Deposit Law

Maximum deposit

For rental agreements shorter than one year, landlords may not demand or receive a deposit above one month's rent; on annual agreements a larger 'reasonable' deposit is allowed but triggers annual interest (NMSA 1978 § 47-8-18(A)). (NMSA 1978 § 47-8-18(A))

One month's rent for rental agreements shorter than one year; for annual (one-year) agreements the statute allows a 'reasonable' deposit with no fixed cap, but interest is owed on any deposit above one month's rent

Return deadline

A landlord keeping any part of the deposit must give the tenant an itemized written list of deductions and any balance within 30 days after the tenancy ends; to be safe, count from the earlier of lease termination or move-out, because the forfeiture rule runs from termination of the tenancy (NMSA 1978 § 47-8-18(C)-(D)). (NMSA 1978 § 47-8-18(C)-(D), N.M. Legislature CCJ Committee handout (Aug. 25, 2026), slide 'Fees Assessed at Move-out' citing NMSA 1978 § 47-8-18(C))

Itemized statement of deductions

A landlord who withholds any part of the deposit must give the tenant an itemized written list of deductions and the balance within the 30-day period, and may not withhold for normal wear and tear (NMSA 1978 § 47-8-18(C)). (NMSA 1978 § 47-8-18(C), N.M. Legislature CCJ Committee handout (Aug. 25, 2026) citing § 47-8-18(C))

Interest on the deposit

On an annual rental agreement, a landlord who takes a deposit larger than one month's rent must pay the tenant interest on it each year at the passbook savings rate (NMSA 1978 § 47-8-18(A)(1)). (NMSA 1978 § 47-8-18(A)(1))

Only under an annual rental agreement where the deposit exceeds one month's rent: the landlord must pay the tenant annual interest at the passbook rate permitted to New Mexico savings and loan associations by the federal home loan bank board.

Penalty for wrongful withholding

A landlord who misses the 30-day itemized statement forfeits the right to keep any of the deposit or sue for damage and owes the tenant's court costs and attorney fees, and bad-faith retention adds a $250 civil penalty (NMSA 1978 § 47-8-18(D)-(E)). (NMSA 1978 § 47-8-18(D)-(E))

Where the deposit is held

New Mexico owners may keep a deposit in any account; the deposit section of the Owner-Resident Relations Act sets no escrow, trust or separate-account rule (NMSA 1978 § 47-8-18). (NMSA 1978 § 47-8-18, 2025 SB 267 as enacted (Laws 2025, ch. 122))

Receipt or written notice of the deposit

New Mexico law does not require a receipt for a security deposit or a notice of where it is held (NMSA 1978 § 47-8-18). (NMSA 1978 § 47-8-18)

Move-in condition checklist

No New Mexico statute requires a move-in inspection or condition checklist; deductions are limited to damage beyond normal wear and tear (NMSA 1978 § 47-8-18(C)). (NMSA 1978 § 47-8-18)

Pet deposits

New Mexico has no pet-specific deposit rule, so any pet deposit is subject to the general limits on a 'reasonable' deposit, including the one-month cap on agreements shorter than a year (NMSA 1978 § 47-8-18(A)). (NMSA 1978 § 47-8-18, NMSA 1978 ch. 47, art. 8 (Uniform Owner-Resident Relations Act))

Nonrefundable fees

Since June 20, 2025, New Mexico caps applicant screening fees at $50, bans any other application-processing fees, requires all fees to be itemized in rental listings, and requires 60 days' written notice to raise a fee under a lease (NMSA 1978 §§ 47-8-19.1 to 47-8-19.4). (NMSA 1978 § 47-8-19.2, NMSA 1978 § 47-8-19.1, NMSA 1978 § 47-8-19.4, 2025 SB 267 as enacted (Laws 2025, ch. 122), §§ 2-5, 7)

The screening fee needs written notice, the applicant's written agreement and a receipt, and must be refunded within 30 days if another applicant takes the unit or no screening is done; an unauthorized screening fee costs the owner $250 plus a full refund (§ 47-8-48(B)). Only one screening fee may be charged per 90 days across properties under the same ownership.

Small-landlord exemptions

New Mexico's deposit rules apply to every owner covered by the Act; its exemptions turn on the type of occupancy (institutions, hotels, employee housing), not landlord size or owner-occupancy (NMSA 1978 §§ 47-8-9, 47-8-18). (NMSA 1978 § 47-8-9, NMSA 1978 § 47-8-18)

Deposit alternatives and installments

New Mexico does not regulate deposit-alternative products, surety bonds or installment payment of deposits (NMSA 1978 § 47-8-18). (NMSA 1978 § 47-8-18)