New Mexico Security Deposit Collections & Holdings

Last Updated: March 10, 2023 by Ashley Porter

To learn about laws on security deposit returns in New Mexico, click here.

Maximum Security Deposit Allowed in New Mexico

In New Mexico, for leases that are shorter than one year, the maximum security deposit is one month’s rent. [1] Leases one year or longer have no maximum security deposit, except it must be “reasonable.” [2]

Can Landlords Charge an Additional Pet Deposit in New Mexico?

In New Mexico, landlords can charge a pet deposit, except for service dogs and emotional support animals. However, the total security deposit (including the pet deposit) cannot exceed the maximum permitted by law. Landlords cannot exceed the limit by giving them another name like “pet deposit” or “damage deposit.”

This law does not prevent landlords from adding a monthly pet premium.

How Much Rent Can a Landlord Collect Upfront in New Mexico?

There is no limit on the amount of rent that can be collected upfront in New Mexico. Many states have a limit on the amount of rent that can be collected at once, but New Mexico does not. Prepaid rent is not part of the security deposit in New Mexico. [4]

Security Deposit Collections in New Mexico

While other states have additional requirements for landlords that collect a security deposit, such as providing certain documentation of the condition of the unit at move-in, New Mexico does not.

Do Landlords Have to Provide a Receipt for the Security Deposit in New Mexico?

Although some states like Washington require a receipt, landlords are not required to provide a receipt for the security deposit in New Mexico.

What Obligations Do Landlords Have to Establish the Condition at Move-in in New Mexico?

New Mexico law does not have specific obligations before a tenancy. While other states like Washington have pre-tenancy obligations like a written inventory of damages, New Mexico does not.

Security Deposit Holdings in New Mexico

New Mexico law does not require landlords to hold security deposits separate from other funds. Some other states mandate how and where security deposits are held, but New Mexico does not.

Are Tenants Entitled to Interest on Their Security Deposit 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. [5]

How Are Security Deposits Accounted for in New Mexico?

Security deposits are not considered taxable income when they are collected.

What Happens to a Security Deposit When the Property is Sold in New Mexico?

When a property is sold in New Mexico, the seller must notify the tenant in writing and transfer the security deposit to the new owner, who must handle it according to the same rules. [6]