How much can a landlord charge for a security deposit in New Mexico?

1 month's rent — That 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 the owner-resident act an annual lease carries no numeric cap at all; a lot in a mobile home park is capped separately at one month's rent, or two months' rent for a multiwide home (47-10-8).

How long does a landlord have to return a security deposit in New Mexico?

30 days. The clock runs from the date the rental agreement terminates or the resident departs, whichever is later (47-8-18(C)).

What happens if a landlord does not return the deposit on time in New Mexico?

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 (47-8-18(D)). Bad-faith retention adds a civil penalty of $250 payable to the resident (47-8-18(E)).

Do landlords have to pay interest on security deposits in New Mexico?

Yes — New Mexico requires interest on the security deposit to be paid to the tenant. The interest duty is narrow: it applies only under an ANNUAL rental agreement where the owner demands or receives a deposit greater than one month's rent, and the owner must then pay interest to the resident every year (47-8-18(A)(1)).

What are the security deposit rules in New Mexico?

Verified October 1, 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 an interest rule: if an annual-lease deposit exceeds one month's rent, the landlord must pay the tenant interest on it every year.

Cited to NMSA 1978 § 47-8-18 (A)-(E) and 3 more cited sources · Verified October 1, 2026

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. Outside mobile home parks there is no escrow or separate-account requirement; a mobile home park may hold no more than one month's rent, or two months' rent for a multiwide home, and must keep security deposits in a separate trust account (NMSA 47-10-8, 47-10-10(B)(2)).

New Mexico security deposits at a glance

Maximum deposit	1 month's rent — That 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 the owner-resident act an annual lease carries no numeric cap at all; a lot in a mobile home park is capped separately at one month's rent, or two months' rent for a multiwide home (47-10-8). Under an annual rental agreement the deposit must simply 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	The clock runs from the date the rental agreement terminates or the resident departs, 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 thirty-day 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	The interest duty is narrow: it applies only under an ANNUAL rental agreement where the owner demands or receives a deposit greater than one month's rent, and the owner must then pay interest to the resident every year (47-8-18(A)(1)). The rate is '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.' Deposits of one month or less, and all deposits under agreements shorter than one year, carry no interest duty. The rate reference is doubly dead: the federal rate-ceiling authority the clause points at expired on March 31, 1986, and the agency named — the Federal Home Loan Bank Board — was abolished in 1989, with no successor formula ever enacted — but the duty itself remains on the books.
Pet deposits	A pet deposit counts inside the general deposit cap and has no figure of its own. The pet-deposit rule, pet rent and fees, and the assistance-animal rules are on the pets and assistance animals page.
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 (47-8-18(D)). Bad-faith retention adds a civil penalty of $250 payable to the resident (47-8-18(E)). That owner also 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)).
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.

Cite this page: "Landlord Atlas, New Mexico Security Deposit Laws (verified October 1, 2026), landlordatlas.com/laws/security-deposits/new-mexico/" — free to cite and quote with a link (how these records are verified). Everything above is cited in the citations section below.

Generate a New Mexico security-deposit return letter — free, no signup, built on the same verified New Mexico law as this page.

Editable New Mexico deposit kit — the deposit disposition letter, the move-in receipt with the custody and interest statements, a deposits-held register with the return deadline computed, and the rules fact sheet built on the verified New Mexico rules on this page, in Word, fillable PDF and Excel.

Notes and caveats

One month's rent — but only on leases shorter than a year — The one-month cap in 47-8-18(A)(2) applies only to rental agreements of a duration less than one year, which includes month-to-month residencies. The flat statements circulating — 'New Mexico caps deposits at one month' and 'New Mexico has no deposit cap' — are each half-wrong; 47-8-18(A) is a split regime.
Interest is required, but no rate can be printed — The interest duty is statutory, and it decides the money on annual leases whose deposit exceeds one month's rent (47-8-18(A)(1)). The rate reference — passbook interest permitted by the federal home loan bank board — is a dead-letter anachronism, since FIRREA abolished that agency in 1989 and no New Mexico statute ever supplied a successor rate, so no percentage can honestly be stated.
Prepaid last month's rent is not a deposit — Under 47-8-18(B), prepaid last month's rent is not a deposit, and a deposit may not be construed as prepaid rent.
What the owner-resident act never requires — The Uniform Owner-Resident Relations Act contains no separate-, trust- or escrow-account rule, no pet-deposit provision, and no tenant forwarding-address duty. Those negatives are the law, not gaps. The Mobile Home Park Act is different: a park's security deposits remain the tenant's property and must be kept in a separate trust account (47-10-10(B)(2)).
Nonrefundable fees: unaddressed by the Act, but not unregulated — The UORRA neither authorizes nor bans nonrefundable fees, which is why that field is left blank rather than yes or no. Since SB 267 (Laws 2025, ch. 122, effective June 20, 2025) any fee must be disclosed in the published listing (47-8-19.1), and charging fees not in the rental agreement or the listing is an unfair or deceptive trade practice under the amended Unfair Practices Act — a real constraint on 'nonrefundable fee' drafting.
Currency — 47-8-18 was last amended by Laws 1989, ch. 340 (history: 1975/1985/1989). 2025's SB 267 did not touch this section, and the official compilation current through the 2026 session carries the same text.

Common questions: New Mexico security deposits

Each answer is the verified value from the table above, restated as a direct answer. Free to quote with a link to this page.

How much can a landlord charge for a security deposit in New Mexico?: 1 month's rent — That 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 the owner-resident act an annual lease carries no numeric cap at all; a lot in a mobile home park is capped separately at one month's rent, or two months' rent for a multiwide home (47-10-8).
How long does a landlord have to return a security deposit in New Mexico?: 30 days. The clock runs from the date the rental agreement terminates or the resident departs, whichever is later (47-8-18(C)).
What happens if a landlord does not return the deposit on time in New Mexico?: 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 (47-8-18(D)). Bad-faith retention adds a civil penalty of $250 payable to the resident (47-8-18(E)).
Do landlords have to pay interest on security deposits in New Mexico?: Yes — New Mexico requires interest on the security deposit to be paid to the tenant. The interest duty is narrow: it applies only under an ANNUAL rental agreement where the owner demands or receives a deposit greater than one month's rent, and the owner must then pay interest to the resident every year (47-8-18(A)(1)).
Can a landlord charge a non-refundable fee in New Mexico?: Not addressed by statute.

Citations

NMSA 1978 § 47-8-18 · (A)-(E) (verified 2026) Official source
NMSA 1978 § 47-8-3 (definition of 'deposit') · (F) (verified 2026) Official source
NMSA 1978, Section 47-8-18 (deposits) · 47-8-18(A)-(E) (verified 2026) Official source
NMSA 1978, Section 47-8-3 (definition of deposit) · 47-8-3(F) (verified 2026) Official source

How this record was verified: Read on the New Mexico Compilation Commission's site (nmonesource.com), the official publisher of the New Mexico Statutes Annotated 1978: Chapter 47 in the compilation current through the 2026 session, for the Uniform Owner-Resident Relations Act (sections 47-8-1 to 47-8-52), section 47-8A-1 on rent control and the Mobile Home Park Act (sections 47-10-1 to 47-10-23), with chapters 12, 14, 34, 35 and 39 and the court rules (Rule Sets 1, 2, 3, 4 and 12 NMRA) for the eviction answers. The final version of 2025 Senate Bill 267 (Laws 2025, ch. 122, signed April 8, 2025, effective June 20, 2025) was read on nmlegis.gov for the current text of section 47-8-15 (the 5% late fee), new sections 47-8-19.1 to 47-8-19.4 and amended section 47-8-48. The 2026 regular session adjourned on February 19, 2026; Senate Bill 138 (repeal of the rent control prohibition) died in committee, and no act of that session amended the Uniform Owner-Resident Relations Act. Every section the security deposit, rent increase, late fee, entry and eviction answers rest on was last read on October 1, 2026. The codes of Albuquerque, Santa Fe, Las Cruces, Farmington, Roswell, Bernalillo County, Sandoval County and Los Alamos County were searched the same day for local eviction ordinances.