Security Deposit Demand Letter — New Mexico

SECURITY DEPOSIT DEMAND LETTER

UNDER THE NEW MEXICO UNIFORM OWNER-RESIDENT RELATIONS ACT

SENT VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND FIRST-CLASS MAIL

Date: [__/__/____]

To:

[________________________________] (Owner/Property Management Company)
[________________________________] (Street Address)
[________________________________] (City, State, ZIP)

RE: FORMAL DEMAND FOR RETURN OF SECURITY DEPOSIT
Former Resident: [________________________________]
Rental Unit: [________________________________]
Lease Commencement: [__/__/____]
Date of Departure: [__/__/____]
Deposit Paid: $[________________________________]

Dear [________________________________]:

This firm represents [________________________________] ("Resident") regarding your failure to return the security deposit for the above-referenced rental unit in compliance with the New Mexico Uniform Owner-Resident Relations Act, NMSA 1978, §§ 47-8-1 et seq. This letter constitutes a formal demand for the return of our client's deposit together with all statutory penalties, interest, attorney fees, and court costs to which our client is entitled.

I. GOVERNING LAW — NEW MEXICO DEPOSIT STATUTE

A. The Owner-Resident Relations Act

Security deposits in New Mexico are exclusively governed by NMSA 1978, § 47-8-18 ("Deposits"), enacted as part of the Uniform Owner-Resident Relations Act. The Act uses the terms "owner" and "resident" rather than the more common "landlord" and "tenant." All references in this letter follow that terminology where citing the statute.

B. Deposit Limits Under § 47-8-18(A)

For any rental agreement with a term of one year or less, an owner may not demand or receive a security deposit in excess of one month's rent. There is no statutory cap on deposits for leases exceeding one year. If you collected a deposit in excess of one month's rent on a lease of one year or less, you have violated NMSA 1978, § 47-8-18(A), and our client may recover the excess.

C. Thirty-Day Return and Itemization Requirement

Under NMSA 1978, § 47-8-18(B), the owner must provide the resident with:

1. An itemized written list of deductions from the deposit; AND
2. The balance of the deposit, if any —

within thirty (30) days of the later of: (a) the date of termination of the rental agreement, or (b) the date the resident departs the unit.

The owner is deemed to have complied by mailing the statement and any payment to the last known address of the resident. NMSA 1978, § 47-8-18(B).

D. Permissible Deductions — § 47-8-18(B)

An owner may deduct only for:

• Unpaid rent or other charges owed under the rental agreement;
• Damages to the premises beyond ordinary wear and tear caused by the resident, household members, or guests;
• Other amounts specifically authorized by the rental agreement.

E. Forfeiture of Right to Withhold — § 47-8-18(C)

If the owner fails to comply with the 30-day return and itemization requirement, the owner forfeits the right to withhold any portion of the deposit and also forfeits the right to assert any counterclaim in an action to recover the deposit. This forfeiture is automatic under New Mexico law and does not require a showing of bad faith.

F. Bad Faith Penalty — § 47-8-18(D)

An owner who in bad faith retains a deposit in violation of § 47-8-18 is liable for a civil penalty of $250.00 payable to the resident. This is in addition to the return of the full deposit.

G. Attorney Fees and Court Costs — § 47-8-18(C) & § 47-8-48

An owner who fails to comply with the deposit statute is liable to the resident for:

• Court costs; and
• Reasonable attorney fees.

Additionally, NMSA 1978, § 47-8-48 provides for the award of reasonable attorney fees to the prevailing party in any action arising under the Owner-Resident Relations Act.

H. Interest on Deposits Held Over One Year — § 47-8-18(A)

If the owner holds a security deposit for more than one year, the owner must pay annual interest on the deposit at the passbook savings rate from the date the deposit was received.

II. FACTUAL BACKGROUND

A. Tenancy Summary

B. Departure and Notice Details

C. Condition of the Premises at Departure

☐ The premises were left in substantially the same condition as at the beginning of the tenancy, allowing for ordinary wear and tear.

☐ Our client had the premises professionally cleaned by [________________________________] on [__/__/____].

☐ All personal property was removed prior to departure.

☐ Photographic and/or video documentation exists for both move-in and move-out conditions.

☐ Our client performed the following repairs or cleaning prior to departure: [________________________________]

III. YOUR VIOLATIONS OF NEW MEXICO LAW

You have violated NMSA 1978, § 47-8-18 in one or more of the following ways:

☐ Failure to Return Deposit Within 30 Days. Our client departed on [__/__/____]. More than thirty days have elapsed and you have failed to return any portion of the deposit or provide an itemized statement of deductions. Under § 47-8-18(C), you have forfeited the right to withhold any portion of the deposit and forfeited the right to assert any counterclaim for damages to the premises.

☐ Failure to Provide Itemized Written Statement. You failed to mail an itemized written list of deductions to our client's last known address within thirty days as required by § 47-8-18(B). This failure independently triggers forfeiture under § 47-8-18(C).

☐ Improper Deductions. You provided a statement claiming deductions of $[________________________________], but the following deductions are not permitted under New Mexico law:

• ☐ Deductions for ordinary wear and tear (e.g., minor scuffs, nail holes, worn carpet in traffic areas, faded paint)
• ☐ Deductions for pre-existing conditions documented at move-in
• ☐ Deductions for conditions caused by the owner's failure to maintain the premises under § 47-8-20
• ☐ Deductions exceeding the actual, reasonable cost of repairs
• ☐ Deductions for routine turnover cleaning and repainting
• ☐ Other improper deductions: [________________________________]

☐ Excessive Deposit Collected. The lease term was one year or less and you collected a deposit exceeding one month's rent in violation of § 47-8-18(A).

☐ Failure to Pay Interest. The deposit was held for more than one year and you failed to pay accrued interest at the passbook savings rate as required by § 47-8-18(A).

☐ Bad Faith Retention. You have retained the deposit in bad faith, as evidenced by: [________________________________]. This subjects you to the $250 civil penalty under § 47-8-18(D).

IV. ORDINARY WEAR AND TEAR UNDER NEW MEXICO LAW

New Mexico courts distinguish between "damage" caused by negligent or abusive use and "ordinary wear and tear" resulting from normal use over time. The owner bears the burden of proving that deductions are for damage rather than ordinary wear and tear. The following are examples of ordinary wear and tear for which a deduction is not permitted:

☐ Minor scuff marks on walls from normal furniture placement
☐ Small nail or pin holes from hanging pictures and decorations
☐ Worn or matted carpet in high-traffic areas
☐ Faded or slightly yellowed paint due to age and sunlight
☐ Minor scratches on hardwood or vinyl flooring
☐ Worn finish on bathroom or kitchen fixtures
☐ Slightly dirty window coverings and mini-blinds
☐ Standard dirt and dust requiring routine turnover cleaning
☐ Worn door handles, locks, or weatherstripping
☐ Other: [________________________________]

V. DAMAGES CALCULATION

A. Deposit and Interest Due

B. Statutory Penalty

C. Attorney Fees and Costs

D. Total Demand

VI. EVIDENCE PRESERVED

Our client has preserved the following evidence:

☐ Original rental agreement / lease
☐ Receipt or canceled check for security deposit
☐ Move-in condition checklist or inspection report
☐ Move-out condition checklist or inspection report
☐ Dated photographs of the premises at move-in
☐ Dated photographs of the premises at move-out
☐ Video walkthrough of the premises at move-out
☐ Copy of written notice to vacate
☐ Proof of delivery of forwarding address
☐ Receipts for professional cleaning services
☐ All correspondence with owner regarding the deposit
☐ Owner's itemized statement of deductions (if any received)
☐ Witness statements regarding condition of the premises
☐ Utility final statements confirming service through departure date
☐ Other: [________________________________]

VII. DEMAND

We hereby demand that you take the following actions within fourteen (14) calendar days of the date of this letter:

1. Return the full deposit plus accrued interest: $[________________________________]

2. Pay the $250 bad faith civil penalty under § 47-8-18(D) (if applicable).

3. Pay attorney fees and costs incurred to date: $[________________________________]

4. Total payment due: $[________________________________]

Payment shall be made by certified check or money order payable to [________________________________] and mailed to:

[________________________________] (Law Firm Name)
[________________________________] (Street Address)
[________________________________] (City, State, ZIP)

Reference: [________________________________] — Security Deposit

VIII. CONSEQUENCES OF NON-COMPLIANCE

If you fail to comply with this demand within the time specified, we are prepared to:

1. File suit in New Mexico Metropolitan Court (for claims up to $10,000) or New Mexico Magistrate Court or District Court as appropriate, seeking recovery of the full deposit, interest, the $250 statutory penalty, attorney fees, and court costs pursuant to NMSA 1978, §§ 47-8-18 and 47-8-48.

2. Invoke the statutory forfeiture. Because you failed to comply with the 30-day return and itemization requirement, you have forfeited the right under § 47-8-18(C) to withhold any portion of the deposit and to assert any counterclaim for damages.

3. File complaints with:
   - New Mexico Attorney General — Consumer Protection Division (P.O. Box 1508, Santa Fe, NM 87504; 1-844-255-9210)
   - City of Albuquerque Office of Civil Rights (if applicable)
   - Local housing authority
   - Better Business Bureau

4. Pursue judgment enforcement including garnishment, levy, and lien on real property under New Mexico law.

IX. RESPONSE REQUESTED

Please respond in writing within fourteen (14) calendar days with:

1. Your position regarding the amount owed;
2. Any documentation supporting any claimed deductions;
3. Full payment or a good-faith settlement proposal.

If we do not receive a satisfactory response, we will file suit without further notice.

X. RESERVATION OF RIGHTS

This letter is written without prejudice to all rights and remedies available to our client under NMSA 1978, §§ 47-8-1 et seq., general contract law, and any other applicable authority. All such rights are expressly reserved.

Respectfully submitted,

[________________________________] (Law Firm Name)

By: _________________________________
[________________________________] (Attorney Name)
New Mexico State Bar No. [________________________________]
[________________________________] (Address)
[________________________________] (City, NM ZIP)
[________________________________] (Telephone)
[________________________________] (Email)

Attorneys for [________________________________]

ENCLOSURES:

☐ Copy of rental agreement / lease
☐ Copy of deposit receipt or canceled check
☐ Move-in / move-out photographs (selected)
☐ Copy of notice to vacate
☐ Copy of forwarding address notification
☐ Copy of owner's itemized statement (if any)
☐ Professional cleaning receipts
☐ Authorization to represent

cc:
[________________________________] (Resident/Client)
[________________________________] (Property Management Company, if different from addressee)
[________________________________] (Property Owner, if different from addressee)
Client File

NEW MEXICO SECURITY DEPOSIT QUICK REFERENCE

NEW MEXICO-SPECIFIC NOTES

☐ Automatic Forfeiture for Non-Compliance. Unlike many states that impose a multiplier penalty, New Mexico uses a forfeiture mechanism: missing the 30-day deadline or failing to itemize causes the owner to lose the right to withhold any portion of the deposit and bars the owner from asserting counterclaims for damages to the unit. This is a powerful tool for tenants. NMSA 1978, § 47-8-18(C).

☐ $250 Bad Faith Penalty. In addition to forfeiture, an owner who retains a deposit in bad faith is liable for a flat $250 civil penalty payable to the resident. This is a separate remedy that does not require proving the amount of the deposit. NMSA 1978, § 47-8-18(D).

☐ "Owner" and "Resident" Terminology. New Mexico's statute uses "owner" and "resident" rather than "landlord" and "tenant." Filings and correspondence should use this terminology when citing the statute.

☐ No Statutory Multiplier. New Mexico does not provide double or treble damages for wrongful withholding. Instead, the forfeiture mechanism and $250 penalty are the statutory remedies. Thorough documentation is critical because actual damages must be proved to recover beyond the deposit amount.

☐ Interest Accrual. The interest requirement applies only when the deposit has been held for more than one year. The rate is the "passbook savings" rate, which is generally quite low but must still be calculated and paid.

☐ Metropolitan Court Jurisdiction. The Albuquerque Metropolitan Court has jurisdiction over civil claims up to $10,000. Magistrate courts in other counties handle small claims with the same jurisdictional limit. Claims exceeding $10,000 must be filed in District Court.

☐ Albuquerque and Santa Fe Considerations. The City of Albuquerque has an Office of Civil Rights that may assist with housing complaints. Santa Fe has enacted local tenant protections. Practitioners should check local ordinances in addition to state law.

☐ Mailing Compliance. The statute deems the owner to have complied by mailing the statement and payment to the resident's last known address. Residents should always provide a forwarding address in writing to preserve their rights.

☐ Judicial Education Center Resource. The University of New Mexico Judicial Education Center (jec.unm.edu) publishes an online landlord-tenant tutorial covering deposit law, which New Mexico courts sometimes reference.

SOURCES AND REFERENCES

• NMSA 1978, § 47-8-18 — https://law.justia.com/codes/new-mexico/chapter-47/article-8/section-47-8-18/
• NMSA 1978, §§ 47-8-1 through 47-8-52 (Uniform Owner-Resident Relations Act)
• UNM Judicial Education Center — Deposits Tutorial — http://jec.unm.edu/education/online-training/landlord-tenant-relations-tutorial/deposits
• New Mexico Attorney General — Consumer Protection Division — https://www.nmag.gov/consumer-protection.aspx
• iPropertyManagement — NM Security Deposit Laws — https://ipropertymanagement.com/laws/new-mexico-security-deposit-returns

This template is for informational purposes only and does not constitute legal advice. Security deposit laws may be supplemented by local ordinances. Verify current requirements with a licensed New Mexico attorney before use.