Security Deposit Demand Letter — New Mexico

SECURITY DEPOSIT SETTLEMENT DEMAND

New Mexico Uniform Owner-Resident Relations Act

[LAW FIRM OR SENDER LETTERHEAD]

SETTLEMENT COMMUNICATION — FOR RESOLUTION PURPOSES ONLY
ADMISSIBILITY GOVERNED BY NMRA 11-408 AND, IF APPLICABLE, FED. R. EVID. 408

VIA [CERTIFIED MAIL / TRACKED DELIVERY / FIRST-CLASS MAIL / EMAIL]

Date: [__/__/____]

To:

[OWNER / PROPERTY MANAGER LEGAL NAME]
[STREET ADDRESS]
[CITY], [STATE] [ZIP]

Re: DEMAND CONCERNING SECURITY DEPOSIT

Dear [OWNER / MANAGER]:

I. PURPOSE AND SCOPE

This letter concerns property or money held as a deposit for the rental unit identified above. The resident contends that [DESCRIBE FAILURE TO RETURN / FAILURE TO ITEMIZE / IMPROPER RETENTION / INTEREST ISSUE / BAD FAITH] under NMSA 1978 § 47-8-18.

This is a settlement proposal, not a court filing or statutory cure notice. The response deadline does not extend or toll any claim, defense, appeal, lease, or court deadline.

II. DEPOSIT CLASSIFICATION AND TERM GATE

A. Identify Each Payment

Section 47-8-18(A) permits an owner to demand a reasonable deposit to be applied to damages caused to the premises by the resident during the residency. Section 47-8-18(B) excludes last month's prepaid rent from the deposit treatment stated there.

Do not assume that every payment labeled a fee or deposit has the same statutory treatment. Quote the rental agreement and identify whether the payment was refundable and what it secured.

B. Lease-Duration Rules — § 47-8-18(A)

• Rental agreement shorter than one year: The owner may not demand or receive a deposit exceeding one month's rent.
• Annual rental agreement: If the owner demands or receives a deposit greater than one month's rent, the owner must pay the resident annual interest on the deposit at the passbook interest rate described in § 47-8-18(A)(1).
• Other duration: Section 47-8-18(A) still begins with a reasonable-deposit requirement, but its one-month limit is written for agreements shorter than one year and its interest paragraph is written for an annual agreement. Do not convert silence into a blanket "no cap" rule; analyze the agreement and current authority.

III. RETURN, DEDUCTION, AND ITEMIZATION RULES

A. Permitted Application — § 47-8-18(C)

Upon termination of the residency, an owner may apply deposit property or money to:

• rent;
• damages the owner suffered because of the resident's noncompliance with the rental agreement or § 47-8-22; and
• nonpayment of utilities, repair work, or other legitimate damages as stated in the section.

No deposit may be retained for normal wear and tear.

B. Itemization and Balance

When actual cause exists to retain any portion, § 47-8-18(C) requires an itemized written list of deductions and the balance, if any, within 30 days after the later of:

1. termination of the rental agreement; or
2. the resident's departure.

The owner is deemed to comply by mailing the statement and required payment to the resident's last known address.

C. Deduction Review

For every disputed deduction, identify the rental-agreement duty, § 47-8-22 duty if relied on, move-in condition, move-out condition, age and expected life of the item, actual work, invoice or estimate, prior damage, owner maintenance, and resident/household/guest causation. Do not use a generic list declaring nail holes, carpet wear, cleaning, repainting, or another condition always ordinary wear; the record and governing duty matter.

IV. NONCOMPLIANCE AND REMEDY GATES

A. Forfeiture — § 47-8-18(D)

Section 47-8-18(D) provides that when the owner fails to provide the written deductions statement and the balance shown due within the statutory period, the owner:

1. forfeits the right to withhold any part of the deposit;
2. forfeits the right to assert a counterclaim in an action brought to recover the deposit;
3. is liable to the resident for court costs and reasonable attorney fees; and
4. forfeits the right to bring an independent action against the resident for damage to the rental property.

Apply Subsections C and D to the precise termination, departure, mailing, payment, rent, and deduction facts. Do not describe forfeiture as triggered by every disagreement over the amount of a timely itemization.

B. Bad-Faith Penalty — § 47-8-18(E)

An owner who in bad faith retains a deposit in violation of § 47-8-18 is liable for a $250 civil penalty payable to the resident. A statutory violation does not automatically establish bad faith; identify the evidence supporting that separate allegation.

Bad-faith evidence asserted: [________________________________]

C. Attorney Fees and Costs — §§ 47-8-18(D) and 47-8-48

Section 47-8-18(D)(3) addresses court costs and reasonable attorney fees for the specified failure. Section 47-8-48(A) entitles the prevailing party in a suit by an applicant or rental-agreement party to enforce the agreement or the Act to reasonable attorney fees and court costs assessed by the court.

A pre-suit demand may propose fees as a settlement term, but it should not state that one party has already been adjudicated the prevailing party.

V. FACTUAL RECORD

A. Tenancy and Departure

B. Resident's Position

The resident disputes retention because:

☐ no statement and balance were mailed within the statutory period
☐ the statement was not itemized
☐ the owner used an incorrect last known address despite receiving [EXHIBIT]
☐ the retained amount concerns normal wear and tear
☐ the condition existed at move-in
☐ the condition resulted from owner maintenance or another cause
☐ the amount is unsupported by actual repair, invoice, age, condition, or causation evidence
☐ the owner charged for rent or utilities not owed
☐ annual-agreement interest is unpaid
☐ other: [________________________________]

C. Owner's Position and Response

The owner states: [________________________________].

The resident responds: [________________________________].

VI. AMOUNT REQUESTED

A. Deposit Accounting

B. Conditional Remedies and Settlement Items

New Mexico's deposit provision uses return, forfeiture, fees/costs, and a conditional $250 bad-faith penalty. Do not add an unsupported double- or treble-deposit multiplier.

VII. SETTLEMENT DEMAND

To resolve this dispute, the resident proposes that the owner:

1. pay $[TOTAL_AMOUNT] by [PAYMENT METHOD];
2. provide a final itemized accounting and supporting records;
3. correct any inaccurate balance, collection, tenant-screening, or credit report concerning the disputed deposit, if applicable and supported;
4. confirm the treatment of the resident's last known address and returned mail; and
5. execute a release limited to [IDENTIFIED CLAIMS AND PARTIES], if a release is part of the settlement.

Please respond by [__/__/____]. This response date is selected for settlement purposes and is not a statutory cure period.

VIII. FORUM AND FILING CHECK

Forum, venue, claim amount, requested relief, and counterclaims must be reviewed before filing.

• NMSA 1978 § 34-8A-3(A)(2) gives a metropolitan court civil jurisdiction when the debt or sum claimed does not exceed $10,000, exclusive of interest and costs, within its county boundaries.
• NMSA 1978 § 35-3-3(A) gives magistrates civil jurisdiction up to $10,000, exclusive of interest and costs. Subsection C lists excluded civil actions and matters.
• District-court jurisdiction and venue require separate analysis. Do not label every claim outside Albuquerque a "small claims" case or assume that the monetary figure alone resolves forum and venue.

IX. PRESERVATION REQUEST

Please preserve potentially relevant records within the owner's possession, custody, or control, including:

☐ rental agreement, amendments, notices, ledger, and payment records
☐ deposit receipt, account records, interest calculations, and payment history
☐ termination, departure, key-return, and address records
☐ move-in and move-out inspections, photographs, video, and metadata
☐ estimates, invoices, receipts, work orders, vendor records, and proof of payment
☐ communications concerning condition, deductions, mailing, payment, and collection
☐ mailed statement, check, envelope, postmark, tracking, and returned-mail records
☐ tenant-screening, collection, or credit-reporting records concerning the disputed amount
☐ other specifically relevant material: [________________________________]

Please suspend routine deletion or overwriting of responsive material. Any preservation dispute will be addressed under the procedural law and orders governing a resulting case. This request does not predetermine a sanction or expand an existing duty.

X. ENCLOSURES

1. Rental agreement and amendments
2. Deposit payment proof
3. Termination / departure / key-return proof
4. Forwarding or last known address notice
5. Move-in and move-out condition evidence
6. Owner's statement, check, and mailing envelope, if received
7. Resident's deduction response and damage calculation
8. Other: [________________________________]

XI. CONCLUSION

The resident requests a documented accounting and payment consistent with the verified facts and § 47-8-18. Please direct the response to [CONTACT].

Respectfully submitted,

[LAW_FIRM / SENDER NAME]

By: ___________________________________
[ATTORNEY / AUTHORIZED SENDER]
New Mexico Bar No. [NUMBER, IF APPLICABLE]
[ADDRESS]
[CITY], NM [ZIP]
Tel: [PHONE]
Email: [EMAIL]

Counsel for / On behalf of [RESIDENT]

NEW MEXICO SECURITY DEPOSIT QUICK REFERENCE

SOURCES AND REFERENCES

• Current NMSA Chapter 47 (§§ 47-8-18 and 47-8-48): https://nmonesource.com/nmos/nmsa/en/item/4408/index.do
• Current NMSA Chapter 34 (§ 34-8A-3): https://nmonesource.com/nmos/nmsa/en/item/4399/index.do
• Current NMSA Chapter 35 (§ 35-3-3): https://nmonesource.com/nmos/nmsa/en/item/4360/index.do
• Current Rule Set 11 NMRA (Rule 11-408): https://nmonesource.com/nmos/nmra-unanno/en/item/18481/index.do
• Current Federal Rules of Evidence (Rule 408): https://www.uscourts.gov/sites/default/files/document/federal-rules-of-evidence.pdf