When Your New Mexico Landlord Owes You Deposit Interest
Your landlord has been sitting on your deposit for months — maybe years. In New Mexico, that money earns interest, and it belongs to you. Interest is owed only under an annual lease, and only when the deposit is more than one month's rent (N.M. Stat. Ann. § 47-8-18(A)(1)).
New Mexico landlords must pay a variable annual interest on security deposits under N.M. Stat. Ann. § 47-8-18. Interest is owed only under an annual lease, and only when the deposit is more than one month's rent (N.M. Stat. Ann. § 47-8-18(A)(1)).
•Your Money
How Much Interest Are You Owed?
The math is straightforward. Multiply your deposit by the annual rate, then by the number of years your landlord held it.
That is money your landlord collected from you, earned interest on (or should have), and must pay back. It does not matter whether they actually put it in an interest-bearing account — the obligation exists regardless.
•Take Action
How to Demand Your Interest
- Calculate the amount. Take your deposit, multiply by a variable, multiply by the number of years held. Round to the nearest cent.
- Send a written demand. Email or certified mail to your landlord. State the deposit amount, the period held, the applicable rate under N.M. Stat. Ann. § 47-8-18, and the total interest owed. Give them 14 days to respond.
- Keep records. Save your lease, any deposit receipts, move-in/move-out dates, and a copy of your demand letter. You will need these if you go to court.
•Escalation
What If Your Landlord Refuses?
If your landlord ignores your demand or refuses to pay, you have options. New Mexico takes deposit violations seriously.
- File in small claims court. In New Mexico, small claims court hears claims up to $10,000. Filing costs about $77. No lawyer needed.
- Cite the penalty. Under New Mexico Uniform Owner-Resident Relations Act, New Mexico courts can award the deposit plus additional penalties when a landlord wrongfully withholds deposit money — including interest.
- File before the deadline. You have 4 to 6 years from move-out to file a claim in New Mexico. Do not wait.
New Mexico courts can award the deposit plus additional penalties for wrongfully withheld security deposits under New Mexico Uniform Owner-Resident Relations Act. The statute of limitations is 4 to 6 years.
•Full State Law
Interest is just one piece of New Mexico deposit law. Your landlord also has 30 days to return your deposit with an itemized statement of deductions. Read the full New Mexico security deposit law breakdown.
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●Frequently Asked Questions
Frequently Asked Questions
Does my New Mexico landlord have to pay me interest on my security deposit?
It depends. Under N.M. Stat. Ann. § 47-8-18, New Mexico landlords are required to pay a variable annual interest on security deposits. Interest is owed only under an annual lease, and only when the deposit is more than one month's rent (N.M. Stat. Ann. § 47-8-18(A)(1)). If your tenancy meets that condition, the interest runs on the full deposit for the whole time it is held.
How much deposit interest does my New Mexico landlord owe me?
The amount depends on your deposit, the current rate, and how long your landlord held the money. Contact your local housing authority for the current applicable rate. Interest is owed only under an annual lease, and only when the deposit is more than one month's rent (N.M. Stat. Ann. § 47-8-18(A)(1)).
What if my New Mexico landlord refuses to pay deposit interest?
If your landlord refuses to pay the interest owed under N.M. Stat. Ann. § 47-8-18, you can file a claim in small claims court. In New Mexico, small claims court hears claims up to $10,000. Filing costs about $77.
Can my landlord deduct from my deposit before paying interest in New Mexico?
Your landlord can make lawful deductions for damage beyond normal wear and tear or unpaid rent, but where interest is owed they still owe it on the deposit for the period they held it. Interest is owed only under an annual lease, and only when the deposit is more than one month's rent (N.M. Stat. Ann. § 47-8-18(A)(1)). The interest obligation and the return obligation are separate requirements under New Mexico law.
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DepositHawk is not a law firm and does not provide legal advice. Information and documents are for informational purposes only. No attorney-client relationship is created. Consult a licensed attorney for advice specific to your situation.