Security Deposit Return Deadlines & Deductions in New Mexico

At a glance

Requirements one by one

Return and itemization

Under NMSA 1978 § 47-8-18(C), when there is actual cause to retain any portion, the owner must give the resident an itemized written list of deductions and any balance within 30 days after the later of rental agreement termination or resident departure. Mailing the statement and any required payment to the resident's last known address counts as compliance. The subsection gives that deadline for a retained portion and resulting balance; it does not separately state a deadline for returning a deposit in full when nothing is claimed.

Deductions

Section 47-8-18(C) permits application to rent and losses from noncompliance with the rental agreement or statutory resident duties. It names unpaid rent or utilities, repair work, and other legitimate damages, and expressly bars retention for normal wear and tear.

Deposit amount and interest

Section 47-8-18(A) begins with a reasonable-deposit standard. For an agreement shorter than one year, the ceiling is one month's rent. For an annual rental agreement, the section states no fixed monthly ceiling, but a deposit greater than one month's rent triggers annual interest at the specified passbook rate. The interest condition turns on the agreement's annual term and deposit amount, rather than the time the money happens to be held.

Consequences of a missed statement

NMSA 1978 § 47-8-18(D) says that failure to provide the written deductions statement and balance shown due within 30 days of tenancy termination forfeits the right to withhold deposit money, to counterclaim in the deposit recovery action, and to bring an independent action for rental-property damages. It also makes the owner liable for court costs and reasonable attorney's fees. NMSA 1978 § 47-8-18(E) adds a $250 civil penalty for bad-faith retention in violation of the section.

What trips people up

Subsection (C) measures the statement and balance period from the later of agreement termination or departure, while subsection (D)'s remedy text says "within thirty days of the termination of the tenancy." Preserve records of both dates when evaluating a disputed deadline. A forwarding address or separate demand is not stated as a condition for the subsection (C) period; the statute allows mailing to the last known address.

Common questions

Can the owner charge for normal wear? No. Section 47-8-18(C) expressly excludes it from deposit retention.

Does an annual lease permit any size deposit? No. Section 47-8-18(A) requires a reasonable deposit even though it states no fixed one-month cap for an annual agreement.

Is there an automatic $250 payment for every late statement? No. Section 47-8-18(E) conditions that penalty on bad-faith retention in violation of the section.

Statutes and sources

• NMSA 1978 § 47-8-18(A), (C)-(E) — deposit amount, interest, deductions, itemization and remedies. https://nmonesource.com/nmos/nmsa/en/4408/1/document.do#page=342 (accessed 2026-10-07)