New Mexico Security Deposit Returns and Deductions

Last Updated: January 26, 2024 by Phil Ahn

For laws on security deposit collections and holdings in New Mexico, click here.

Security Deposit Deductions in New Mexico

In New Mexico, the following can be deducted [1] from security deposits:

• Unpaid rent, utilities, and late fees
• Costs of damage excluding normal wear and tear
• Costs due to a breach of the lease agreement
• Cleaning costs

Most states, such as New Mexico, do not have a legal limit on how much a landlord can charge for damages except that the charges must be reasonable.

If the cost of the damages exceeds the amount of the security deposit, landlords are entitled to seek additional damages from the former tenant.

What is Considered Normal Wear & Tear vs Damage in New Mexico?

 

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, abuse or intentional damage of the premises, equipment or chattels of the owner by the residents or by any other person in the dwelling unit or on the premises with the resident’s consent; however, uncleanliness does not constitute normal wear and tear.” [2]

Examples include:

• Lightly scratched glass
• Faded flooring
• Lightly dirtied grout
• Loose door handles
• Stained bath fixtures

“Damage” is not specifically defined by New Mexico statutes, but is generally understood to mean destruction to the rental unit that occurs because of abuse or negligence by a tenant.

Examples include:

• Heavily stained, burned, or torn carpets
• Broken tiles or windows
• Holes in the wall
• Missing fixtures

Can the Landlord Charge for Replacing the Carpet in New Mexico?

Landlords can charge for replacing the carpet if it is damaged beyond normal wear and tear.

Can the Landlord Charge for Nail Holes in New Mexico?

In New Mexico, a landlord can charge a tenant for nail holes if they damage the walls in a way that is not a result of ordinary enjoyment of the rental unit.

Tenants have the right to use the walls within their unit in a reasonable way. This includes inserting small nails or thumbtacks to hang posters or pictures.

However, large holes from drilling, multiple nail holes, large nail holes, and holes made for hanging heavier things may be considered damage and thus, chargeable to the tenant.

Can the Landlord Charge a Cleaning Fee in New Mexico?

New Mexico law allows landlords to charge for cleaning costs limited to bringing the residence back to its original condition at the start of the lease term.

Can the Landlord Charge for Painting in New Mexico?

In New Mexico, landlords can charge for painting, except for normal wear and tear. For example, if the tenant:

• Causes damage beyond normal wear and tear
• Repaints the wall but is not permitted to do so under the lease agreement
• Repaints the wall in an unprofessional way

Normal wear includes:

• Minor scrapes from daily use
• Fading due to sunlight
• Minor cracks in the original paint

Landlords can charge for repainting if the damage is not the result of normal use. This includes stains, large or deep scratches, and water damage.

Security Deposit Returns in New Mexico

Landlords must return a security deposit by mail with an itemized statement of deductions, if any, to the tenant’s last known address no later than 30 days after the lease term ends or the tenant vacates the rental unit, whichever is later.

How Long Do Landlords Have to Return Security Deposits in New Mexico?

New Mexico landlords have 30 days [3] after the lease term ends or the tenant vacates the rental unit, whichever is later, to return any unused portion of the security deposit.

Do Landlords Owe Interest on Security Deposits in New Mexico?

New Mexico law requires landlords to provide interest on security deposits that are greater than one month’s rent. The minimum annual interest rate is equal to the passbook interest permitted to the savings and loan associations in New Mexico by the federal home loan bank board. [4]

How Do Landlords Give Notice in New Mexico?

Written notice must be mailed to the tenant’s last known address and must include the amount of the security deposit due, if any, to the tenant, plus an itemized statement of deductions. [5]

Can a Security Deposit Be Used for Last Month’s Rent in New Mexico?

New Mexico law does not forbid the security deposit from being used for any outstanding rent.

Landlords can include a provision in the lease agreement that the security deposit cannot be used for the last month’s rent until the tenant vacates the rental unit.

Security Deposit Disputes in New Mexico

If landlords do not return the security deposit within the 30-day period, tenants can file for the return of the full security deposit plus damages in court up to $250 [6] plus court costs and reasonable attorneys’ fees. [7]

Tenants can also take legal action against a landlord for:

• Failure to provide an itemized statement when deductions are made
• Failure to provide interest due
• Unreasonable deductions

How Can Tenants File a Dispute for a Security Deposit in New Mexico?

If a landlord fails to return the security deposit, the tenant can file a dispute in Small Claims Court if the amount of damages is less than $10,000. [8] If the amount is greater, the tenant must file in the local District Court.

A small claims case must be filed within 4 or 6 years depending on whether the lease agreement was oral or written. An attorney is not required but permitted. Cases are filed in the Small Claims Court for the county where the plaintiff or defendant lives or where the property is located. The filing fee is $77.