Security deposit interest in New Mexico
Yes — New Mexico landlords must pay interest on security deposits where the rental agreement runs one year or more.
Work out what you are owed in New Mexico
Enter your deposit and dates to see what New Mexico law entitles you to.
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Not legal advice. This is an estimate for informational purposes only and is not legal advice. Security deposit laws change and vary by jurisdiction. Verify with the cited statute or consult a licensed attorney in your state before taking action.
How is the New Mexico interest rate set?
No fixed statutory rate. Interest equals the passbook interest permitted to savings and loan associations in New Mexico by the Federal Home Loan Bank Board. Interest is owed only where the deposit exceeds one month's rent under an annual rental agreement, which is uncommon, so most New Mexico tenants receive nothing. The Federal Home Loan Bank Board referred to no longer exists, which makes the applicable rate ambiguous in practice.
What does New Mexico law actually say?
New Mexico requires interest on a residential security deposit only in a narrow case: under an annual rental agreement where the owner demands or receives a deposit greater than one month's rent. In that case the owner must pay the resident interest annually at the passbook rate permitted to New Mexico savings and loan associations. For rental agreements shorter than one year the owner may not demand a deposit above one month's rent at all, so no interest arises.
Last month's prepaid rent is not a deposit for these purposes. No deposit may be retained for normal wear and tear. On termination the owner must give the resident an itemised written list of deductions and the balance within 30 days of termination or the resident's departure, whichever is later.
When must a New Mexico landlord return the deposit?
30 days after the tenancy ends.
What if your landlord does not comply?
Failure to provide the written statement of deductions within 30 days means the owner forfeits the right to withhold any portion of the deposit, forfeits the right to assert a counterclaim in any action to recover it, is liable for the owner's court costs and reasonable attorney fees, and forfeits the right to bring an independent action for damages. An owner who retains a deposit knowing the retention violates this section is liable to the resident for a civil penalty of twice the amount improperly withheld.