New Mexico: Late Rent Fee Limits

The cap is 5% of rent

New Mexico reduced its residential late-fee ceiling in 2025. Current NMSA 1978
§ 47-8-15(D) permits a fee "not to exceed five percent of the rent for each
rental period that the resident is in default." A $1,400 monthly rent therefore
has a maximum late fee of $70 for that rental period.

The cap applies only if the rental agreement provides for charging a late fee
and the resident fails to pay rent in accordance with the agreement. The Act's
definition of rental agreement covers "all agreements" between owner and
resident; § 47-8-15(D) does not add a signed-writing or resident-initialing
condition.

Rent only — not deposits, fees, or utilities

The calculation base is unusually explicit. Late fees "shall be calculated only
based on rent," and the rent calculation must exclude deposits, additional fees,
and utilities. The Act defines rent as the payment required by the agreement for
use of the dwelling unit or premises, excluding deposits.

The statute uses rent for the rental period, not the remaining unpaid balance.
A partial payment does not authorize the owner to substitute additional fees or
utilities into the percentage base.

Notice is required, but no fee grace period is stated

To assess the charge, the owner must provide notice of the late fee no later
than the last day of the next rental period immediately after the period of
default. This is a deadline to notify the resident of the charge; it is not a
waiting period before the charge may attach.

Section 47-8-15(D) states no number of fee-free days after rent is due. It also
does not say that the assessment notice must be written or list particular
contents. The due date and any contractual grace period come from the rental
agreement.

What trips people up

The cap is 5%, not 10%. Laws 2025, chapter 122 reduced the prior figure.
Forms and summaries that still say 10% are stale after June 20, 2025.

The base is rent, not all money owed. Deposits, additional fees, and
utilities cannot be included when calculating the 5% ceiling.

Assessment notice is not a grace period. The owner has until the end of the
next rental period to provide notice of the fee charged. That does not create a
statutory three-day wait before assessment.

Guest fees are separately limited. Section 47-8-15(E) bars a fee merely
because a reasonable number of guests occupy the unit for a reasonable time,
while preserving charges for guest use of other premises or facilities.

Common questions

Is the 5% figured on the unpaid balance? The statute says 5% of rent for the
rental period and requires the calculation to use rent only. It does not state
an unpaid-balance formula.

Can a late fee be charged every day? Section 47-8-15(D) caps the charge at
5% for each rental period in default and states no daily or compounding
mechanism.

Does the owner have to put the fee in the agreement? Yes. The subsection
begins, "If the rental agreement provides for the charging of a late fee." It
does not separately require a signed written addendum.

What happens if the owner charges too much? A party may sue to enforce the
rental agreement or the Act. Under § 47-8-48(A), the prevailing party is
entitled to reasonable attorney fees and court costs; the late-fee section
itself states no damages multiplier.

Statutes and sources

• NMSA 1978 § 47-8-15(D), as amended by 2025 Laws ch. 122 — agreement
  authorization, 5% cap, rent-only base, exclusions, and assessment notice.

  the owner may charge the resident a late fee in an amount not to exceed five
  percent of the rent for each rental period that the resident is in default.
  Late fees shall be calculated only based on rent. Rent calculations to
  determine late fees shall not include deposits, additional fees or utilities.

Official source: https://www.nmlegis.gov/Sessions/25%20Regular/final/SB0267.pdf (accessed 2026-07-20)
- NMSA 1978 § 47-8-3(P)-(Q) — definitions of rent and rental agreement.

"rent" means payments ... pursuant to terms and conditions of the rental
agreement for use of a dwelling unit or premises ... but does not include
deposits; "rental agreement" means all agreements between an owner and
resident.

Official source: https://www.nmlegis.gov/Sessions/25%20Regular/final/SB0267.pdf (accessed 2026-07-20)
- NMSA 1978 § 47-8-15(E), (G) — guest-fee limit and rent-payment allocation.

An owner may not assess a fee ... for occupancy of the dwelling unit by a
reasonable number of guests for a reasonable length of time. ... Unless
agreed upon in writing ... a resident's payment of rent may not be allocated
to any deposits or damages.

Official source: https://www.nmlegis.gov/Sessions/25%20Regular/final/SB0267.pdf (accessed 2026-07-20)
- NMSA 1978 § 47-8-48(A) — civil enforcement and prevailing-party fees and
court costs.

If suit is brought ... to enforce any provisions of the Uniform Owner-
Resident Relations Act, the prevailing party shall be entitled to reasonable
attorneys' fees and court costs to be assessed by the court.

Official source: https://www.nmlegis.gov/Sessions/25%20Regular/final/SB0267.pdf (accessed 2026-07-20)