New Mexico Security Deposit Law

By Oleg Kachko · Updated June 10, 2026

✓ Law Verified June 2026

This guide explains new mexico security deposit law in plain English — how much your landlord can charge, when they must return it, what they can and cannot deduct, and what to do if they do not give it back. All figures are from New Mexico law, verified as of June 2026.

In This New Mexico Guide:

Key Rules
Allowable Deductions
How to Get It Back
Official Sources

New Mexico Security Deposit Rules at a Glance

Maximum deposit	1 month’s rent for leases shorter than 1 year. For annual leases (1 year or longer), there is no statutory maximum, but if the landlord collects more than 1 month’s rent, the landlord must pay annual interest on the deposit to the tenant.
Return deadline	30
Itemized deductions required	YES. Under NMSA § 47-8-18(C), the landlord must provide the tenant with an itemized written list of all deductions and the remaining balance within 30 days of the lease termination date or the tenant’s departure, whichever is later.
Interest on deposit required	CONDITIONAL. Interest is required only when the deposit exceeds 1 month’s rent under an annual lease (1 year or longer). The landlord must pay interest annually at the passbook interest rate permitted to savings and loan associations by the federal home loan bank board. For deposits of 1 month’s rent or less, no interest is required.
Penalty for late/bad-faith return	New Mexico imposes strong penalties if the landlord fails to return the deposit or provide the itemized statement within 30 days. Under NMSA § 47-8-18(D), the landlord: (1) forfeits the right to withhold any portion of the deposit, (2) forfeits the right to assert any counterclaim in a tenant’s action to recover the deposit, (3) becomes liable for the tenant’s court costs and reasonable attorney fees, and (4) forfeits the right to bring an independent action against the tenant for property damage. Additionally, under § 47-8-18(E), a landlord who retains the deposit in bad faith is liable for a civil penalty of 250 dollars payable to the tenant.

Move-in/move-out walkthrough: NO. New Mexico does not require a move-in or move-out walkthrough inspection by statute. However, tenants are strongly encouraged to do their own walkthrough and document the unit’s condition with dated photos at both move-in and move-out to protect against wrongful deductions.

Separate deposit account: NO. New Mexico does not require the landlord to hold the security deposit in a separate or escrow account. The deposit may be commingled with the landlord’s personal funds. There is no requirement to disclose the bank or account where the deposit is held.

What Your Landlord Can and Cannot Deduct in New Mexico

A New Mexico landlord may deduct from the deposit for: (1) unpaid rent, (2) damage to the rental unit beyond normal wear and tear caused by the tenant’s noncompliance with the lease or statutory duties, and (3) cleaning costs necessary to restore the unit to its condition at move-in, minus normal wear and tear. No deposit may be retained to cover normal wear and tear.

Normal wear and tear vs damage: New Mexico defines normal wear and tear as deterioration that occurs based upon the use for which the rental unit is intended, without negligence, carelessness, accident, or abuse. Uncleanliness is specifically excluded from normal wear and tear — meaning the landlord can deduct cleaning costs if the unit is left dirty.

Examples of normal wear and tear typically include minor scuff marks on walls, small nail holes, carpet wear in high-traffic areas, and faded paint. Tenant-caused damage such as large holes in walls, broken fixtures, stained or burned carpets, and pet damage goes beyond normal wear and tear.

How to Get Your Deposit Back in New Mexico

(1) Send a written demand letter to the landlord citing NMSA § 47-8-18 and the specific amount owed, giving 7 to 14 days to respond. Send it by certified mail with return receipt. (2) If the landlord does not respond or refuses to pay, many tenants can file a claim in Magistrate Court (or Metropolitan Court in Bernalillo County).

The small claims limit in New Mexico is 10000 dollars, and filing fees are typically 25 to 75 dollars.

(3) You may be able to recover the full deposit, 250 dollars in statutory bad faith damages, court costs, and reasonable attorney fees. (4) Tenants can also contact New Mexico Legal Aid (1-833-545-4357) for free legal assistance, or the City of Albuquerque Office of Consumer Protection for Albuquerque rentals.

Other New Mexico deposit rules: (1) The 30-day return clock starts from the lease termination date OR the tenant’s departure, whichever is LATER — not just the move-out date. (2) The landlord’s penalty for late return is unusually broad in New Mexico: the landlord loses not only the right to keep any deposit but also the right to sue the tenant for any property damage at all.

(3) The bad faith penalty of 250 dollars is a fixed statutory amount, not a multiplier of the deposit.

(4) Pet deposits are treated the same as regular security deposits under the statute and are subject to the same limits and return rules. (5) Nonrefundable fees (such as cleaning fees or pet fees labeled as nonrefundable) are permitted if clearly stated in the lease as nonrefundable — these are not considered part of the security deposit under § 47-8-18.

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Official New Mexico Sources & Resources

New Mexico Attorney General: UNVERIFIED — no dedicated New Mexico Attorney General security deposit page was found. The NM AG consumer complaint portal is at https://www.nmag.gov/consumer-complaints.aspx but does not have a specific deposit-rights page. Tenants may also use the NM Courts landlord-tenant resource guide at https://lawlibrary.nmcourts.gov
New Mexico Security Deposit Statute: https://law.justia.com/codes/new-mexico/chapter-47/article-8/section-47-8-18/
U.S. Department of Housing and Urban Development: hud.gov
Cornell Legal Information Institute: law.cornell.edu/wex

Understanding New Mexico Security Deposit Law

Your New Mexico security deposit is your money until the landlord proves a lawful deduction. New Mexico security deposit law sets clear limits on how much can be charged, what can be deducted, and when the balance must be returned. If your landlord misses the New Mexico security deposit return deadline or takes deductions that are not allowed, you may be entitled to penalties.

Document the condition of your unit at move-in and move-out — photos are the best protection for your New Mexico security deposit.

This New Mexico security deposit guide was last verified against official sources in June 2026. Laws change — verify with your state or a local legal-aid office.

More New Mexico Tenant Rights Guides

Disclaimer: This guide is informational only and is not legal advice. Landlord-tenant laws change and vary by city and county within a state. Verify current rules with your state, your local court, or a free legal-aid office before acting. If you are facing eviction, contact a local tenant attorney or legal-aid organization right away.

Renting? Protect your belongings — compare renters insurance at Home Insure Guide. Divorce involving a lease? See Divorce Help Guide. Unsafe housing / toxic mold injury? Some cases qualify — see Mass Tort Info.

New Mexico Security Deposit Law — Limits & Deadlines (2026)