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)). An annual lease carries no numeric cap at all.

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 July 11, 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 a rare 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 2 more New Mexico statutes · Verified July 11, 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. There is no escrow or separate-account requirement.

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)). An annual lease carries no numeric cap at all. 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 an anachronism — the Federal Home Loan Bank Board was abolished in 1989 and no successor formula was ever enacted — but the duty itself remains on the books.
Pet deposits	No pet-deposit statute exists. A refundable pet deposit is a 'deposit' under the 47-8-3 definition (a pledge to abide by the rental agreement), so it counts toward the one-month cap on agreements under one year and follows the same 30-day return, itemization and penalty rules.
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 July 11, 2026), landlordatlas.com/laws/security-deposits/new-mexico/" — free to cite and quote with a link (how these records are verified). Every figure above is cited to the New Mexico statute in the citations section below.

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

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 New Mexico never requires — The official RLD compilation of the 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.
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). The 2025-edition text was confirmed identical, and 2025's SB 267 did not touch this section.

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)). An annual lease carries no numeric cap at all.
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.

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 § 47-8-18 (mirror) (verified 2026) Unofficial mirror

How this record was verified: Verbatim reads of two independent official documents, each downloaded and read in full: (1) the NM Regulation & Licensing Department's official UORRA compilation PDF (rld.nm.gov, 2019 edition) for sections 47-8-15 (pre-2025 baseline), 47-8-18, 47-8-24, 47-8-37 and full-chapter negative sweeps (no escrow/interest-account rule, no grace period, no pet-deposit statute, no frequency limit); and (2) the final (enrolled, SJC substitute) version of 2025 SB 267 on nmlegis.gov (Laws 2025, ch. 122, signed 2025-04-08, effective 2025-06-20) for the current text of 47-8-15 (5% late fee), new sections 47-8-19.1 to 47-8-19.4, and amended 47-8-48. Every critical figure reconciled against FindLaw (mirror stamped current 2024-01-01) and Justia 2025-edition amendment notes; the two officials agree with each other and the mirrors on the 1-month deposit cap for sub-annual agreements, annual-lease interest trigger, 30-day return, $250 bad-faith penalty, 5% late fee and its notice-to-assess mechanic, 30-days-before-the-rental-date increase rule, and 24-hour written entry notice. Section 47-8A-1 (rent control preemption) initially verified on two mirrors reconciled verbatim (Justia + FindLaw) because the official host nmonesource.com does not offer stable section links; a same-day (2026-07-11) direct read of the official compiled code on nmonesource.com (NMSA Unannotated, Chapter 47) then sight-verified 47-8A-1 verbatim (subsections A-C, History: Laws 1991, ch. 23, § 1), the compiled 47-8-15 text including the 5% subsection (D) and the 2025 ch. 122 history line, the compiled section numbers 47-8-19.1 through 47-8-19.4, and the unamended history lines of 47-8-18 (1975/1985/1989) and 47-8-24 (1975/1995) — all matching the figures shown here. Pending-bill sweep 2026-07-11: 2026 regular session (30-day) adjourned sine die 2026-02-19; SB 138 (repeal rent control prohibition) died in committee (Action Postponed Indefinitely, confirmed on the official nmlegis.gov bill page); no UORRA bill touching the four topics passed.