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New Mexico Security Deposit Law, in Plain English

New Mexico's deposit statute has the broadest forfeiture rule in the West: a landlord who misses the 30-day itemization doesn't just refund the deposit — the landlord loses the right to counterclaim, loses any separate lawsuit for damage, and pays the tenant's attorney. Around that sit a one-month cap for short leases, an interest rule for larger ones, and a $250 bad-faith penalty. Here's how N.M. Stat. § 47-8-18 actually works, for both sides of the lease.

30 daysDeadline after termination or departure, whichever is later, to send an itemized list of deductions and the balance
1 month's rentThe cap for leases shorter than one year; larger annual-lease deposits earn interest
0What a landlord may retain for normal wear and tear
3 forfeituresA missed statement forfeits the withholding right, the counterclaim, and any separate damage suit
$250The civil penalty for bad-faith retention, payable to the tenant

One month's rent on short leases — more on annual leases, with interest

For a rental agreement shorter than one year, a New Mexico landlord may not demand more than one month's rent as a deposit. Under an annual agreement, the landlord may take more — but a deposit above one month's rent then earns the tenant annual interest at the passbook rate permitted to savings and loan associations. In effect, a large deposit costs the landlord something to hold.

The statute treats last month's prepaid rent as rent, not security. Some cities — Albuquerque and Santa Fe among them — layer local rules on top; check the ordinance where the unit sits.

After move-out: 30 days from the later of termination or departure

Within 30 days of the date the rental agreement terminates or the tenant actually departs — whichever is later — the landlord must provide an itemized written list of deductions and the balance. Mailing the statement and payment to the tenant's last known address satisfies the statute, so a written forwarding address on move-out day is the tenant's responsibility and protection.

What may be deducted: unpaid rent, and damages resulting from the tenant's noncompliance with the rental agreement or the statutory resident duties. The statute then says what most states leave to inference: "No deposit shall be retained to cover normal wear and tear." Faded paint, carpet worn by ordinary walking, and small holes from hanging pictures are the landlord's cost.

In New Mexico, a missed statement forfeits the whole damage claim. The record is what makes the statement easy.

PropInspect walks you room by room — photos, 60-second video clips, and tagged notes attached to each room. Share the finished report as a link the other party can view without an account, or download it as a PDF to attach to the itemized list. Works in the browser, works offline, no app to install. First inspections free, then $0.99 each. No subscription.

PropInspect is a documentation tool, not a compliance service or legal-advice product. Using PropInspect does not guarantee compliance with New Mexico law or a particular result in a deposit dispute.

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When it goes wrong: three forfeitures, fee-shifting, and $250 for bad faith

Section 47-8-18(C) is where New Mexico stands apart. A landlord who fails to provide the written itemized statement within 30 days forfeits the right to withhold any portion of the deposit, forfeits the right to assert a counterclaim in the tenant's action to recover it, forfeits any independent action against the tenant for damages to the premises, and is liable for the tenant's court costs and reasonable attorney's fees.

Real damage doesn't survive a late letter. A landlord with $2,000 in legitimate repairs and a statement mailed on day 31 has no deposit, no counterclaim, no lawsuit, and the tenant's legal bill.

Separately, a landlord who retains a deposit in bad faith owes a $250 civil penalty payable to the tenant (§ 47-8-18(D)). Disputes go to Magistrate Court — or Bernalillo County Metropolitan Court in Albuquerque — which hears civil claims up to $10,000. The winning file: the lease, the forwarding address, the 30-day statement or the postmark showing it was late, and dated room-by-room photos from both ends of the tenancy.

Frequently asked questions

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

30 days after the later of your rental agreement ending or your actual departure. Within that window the owner must provide an itemized written list of any deductions and the balance — mailing it to your last known address counts as compliance, so leave a forwarding address in writing.

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

For a lease shorter than one year, no more than one month's rent. For a one-year lease, the owner may take more than one month — but must then pay you annual interest on the deposit at the savings-and-loan passbook rate. Some cities add local rules, so check Albuquerque or Santa Fe ordinances if you rent there.

What can a landlord deduct from a deposit in New Mexico?

Unpaid rent and damages resulting from your noncompliance with the rental agreement or the statutory resident duties. The statute says it directly: no deposit may be retained to cover normal wear and tear — faded paint and normally worn carpet are the owner's cost.

What happens if the landlord misses the 30-day deadline?

New Mexico's consequences are unusually broad. The owner forfeits the right to withhold any of the deposit, forfeits the right to counterclaim in your lawsuit, forfeits any separate lawsuit against you for damage to the unit, and must pay your court costs and reasonable attorney's fees. A late statement doesn't just return the deposit — it can extinguish the landlord's damage claim entirely.

What is the $250 penalty?

An owner who retains a deposit in bad faith — keeping money without a legitimate basis — owes a $250 civil penalty payable to you, on top of the forfeiture and fee-shifting for a missed statement.

Do I get interest on my deposit in New Mexico?

Only if you have a one-year lease and the deposit exceeds one month's rent — then the owner must pay annual interest at the passbook rate. A one-month deposit, or any deposit on a shorter lease, earns nothing under state law.

Does New Mexico require a move-in inspection or photos?

No. The Act has no checklist, walkthrough, or photo requirement. That leaves 'normal wear and tear' to the evidence — and because a missed statement forfeits the owner's whole damage claim, both sides have every reason to document the unit on day one.

Where do deposit disputes go in New Mexico?

Magistrate Court — or Bernalillo County Metropolitan Court in Albuquerque — which hears civil claims up to $10,000. Bring the lease, your forwarding address, the 30-day itemized statement or proof none arrived, and dated move-in and move-out photos.

Landlord or tenant, the rule is the same: the record wins arguments you'd rather not have.

Document the move-in today so the move-out is boring. Photos, video, and notes for every room, offline-capable, shareable as a link or PDF. Free to start — no account, no app, no credit card.