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New Mexico security deposit law

Source: NMSA 1978 § 47-8-18 (Uniform Owner-Resident Relations Act) · Checked against the statute

Maximum deposit
For a rental agreement shorter than one year, the deposit can't exceed one month's rent. For an annual agreement there is no cap, but a deposit above one month's rent must earn interest.
Return deadline
30 days (see details)
If the landlord keeps it wrongly
Missing the 30-day statement means the owner loses the right to keep any part of the deposit, can't counterclaim, can't sue separately for damage, and owes court costs and reasonable attorney's fees. Bad-faith retention adds a $250 civil penalty payable to the resident.

Calculate your New Mexico deadline

Choose your state and move-out date to see when your landlord must return the deposit.

When the deposit must be returned

  • Provide an itemized written list of deductions and any balance within 30 days after the rental agreement ends or the resident leaves, whichever is later.

The owner complies by mailing the statement and any payment to the resident's last known address.

Itemized list of deductions

Required: Yes. An itemized written list of deductions and the balance due.

What can and can't be deducted

No deposit may be kept to cover normal wear and tear. Deductions may cover unpaid rent and utilities, repairs and other legitimate damages caused by the resident's noncompliance.

Nonrefundable fees

§ 47-8-18 is silent on nonrefundable fees. Prepaid last month's rent is not treated as a deposit. Since a 2025 law (SB 267), an owner may not charge fees that aren't in the rental agreement, and rent payments can't be applied to deposits or damages without written agreement.

Interest, bank account and move-in inspection

  • Interest required: Yes. Only under an annual rental agreement with a deposit above one month's rent. The owner must then pay the resident yearly interest at the passbook rate allowed for savings and loan associations in New Mexico.
  • Separate account required: No. The statute does not require a separate account.
  • Move-in inspection required: No. The statute does not require a move-in inspection.

Penalties and bad faith

Missing the 30-day statement means the owner loses the right to keep any part of the deposit, can't counterclaim, can't sue separately for damage, and owes court costs and reasonable attorney's fees. Bad-faith retention adds a $250 civil penalty payable to the resident.

The $250 civil penalty applies when the owner keeps a deposit in bad faith in violation of § 47-8-18. The statute doesn't define bad faith.

Getting your deposit back in court

New Mexico has no separate small claims court. Magistrate courts, and the Bernalillo County Metropolitan Court in Bernalillo County, hear contract and landlord/tenant cases up to $10,000. Court information

Before filing, many tenants send a written demand first. Write a New Mexico demand letter →

Also good to know

  • The text of § 47-8-18 comes from the existing law reproduced in 2017 HB 331. That bill died, so its proposed certified-mail change never took effect. SB 267 (Laws 2025, ch. 122) amended other sections of the Act, not § 47-8-18.

Sources

Laws change. This page was checked against the sources above on October 11, 2026. It is legal information, not legal advice; see our methodology.