New Mexico Security Deposit Laws (2026): 1-Month Cap for Short Leases, Interest Above 1 Month & $250 Penalty

In New Mexico, the deposit rules depend on the lease length. Leases under a year cap the deposit at one month. Annual leases can ask for more, but then the landlord must pay interest every year.

By Lamuko Editorial Team✓ Checked against official statute textUpdated Oct 17, 2026

New Mexico deposit rules at a glance

Timeline: move-in to refund

Maximum deposit	1 month's rent for leases under 1 year; annual leases may require more, with interest
Return deadline	30 days after the later of lease termination or your departure
Itemized list	Itemized written list of deductions and the balance
Interest	Required annually on annual-lease deposits above 1 month's rent
Penalty	Late: forfeits all deductions and counterclaims + court costs and attorney fees; bad faith: $250 civil penalty
Last month's rent	Prepaid last month's rent is not part of the deposit

Lease length decides the cap

Under NMSA § 47-8-18(A), an owner may demand a reasonable deposit to cover damage. For a rental agreement shorter than a year, the deposit may not exceed one month's rent. For an annual agreement, a larger deposit is allowed, but then the owner must pay you interest every year at the passbook rate described in the statute. Prepaid last month's rent is not counted as the deposit, and the deposit is not prepaid rent (§ 47-8-18(B)).

Deductions and 30 days

When the residency ends, the owner may apply the deposit to rent and to damages from your noncompliance with the lease or § 47-8-22, but not to normal wear and tear. If it keeps anything, it must give you an itemized written list of deductions and the balance within 30 days after the agreement ends or you leave, whichever is later. Mailing to your last known address counts (§ 47-8-18(C)).

Missing the 30 days costs a lot. An owner that does not provide the statement and balance in time forfeits the right to withhold any portion, forfeits any counterclaim in your suit to recover the deposit, is liable for your court costs and reasonable attorney fees, and forfeits the right to bring its own suit for property damage (§ 47-8-18(D)). Bad-faith retention adds a $250 civil penalty payable to you (§ 47-8-18(E)).

Our calculator counts 30 days.

Practical record-keeping

Because the 30 days run from the later of termination or your departure, keep proof of the date you actually left, such as a key-return receipt, and your forwarding address notice.

Steps to recover a New Mexico deposit

Check the cap for your lease length.
On an annual lease with a large deposit, ask about the yearly interest.
Leave a forwarding address.
After 30 days, demand the deposit, citing § 47-8-18(D).
If that fails, file a claim in small claims court.

Neighboring states

Arizona caps deposits at 1.5 months. Texas has bad-faith damages, Colorado treble damages, and Oklahoma sets 45 days.

Frequently asked questions

What is the maximum security deposit in New Mexico?

One month's rent for a lease shorter than a year. Annual leases may require more, but then interest is owed.

Do New Mexico landlords pay interest on deposits?

Yes, annually, on annual-lease deposits above one month's rent.

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

30 days after the later of lease termination or your departure.

What is the penalty in New Mexico?

A late owner forfeits deductions and counterclaims and pays court costs and attorney fees; bad faith adds a $250 civil penalty.

Sources

NMSA § 47-8-18 (Justia, 2025 New Mexico Statutes text)

Last reviewed Oct 17, 2026. Read how we verify. Found an error? Tell us.

Other state guides

Not legal advice. Lamuko Rent Laws provides general legal information about state statutes, not legal advice, and using this site does not create an attorney-client relationship. Laws change and courts interpret them; city and county ordinances (for example Chicago, San Francisco or New York City rules) can be stricter than state law, and your lease or a subsidized-housing program may add terms. Fields marked “Verify with statute” have not yet been confirmed by us against the official text. Check the linked statute or talk to a licensed attorney or local legal-aid office before acting.