Security Deposit Alternative in New Mexico
New Mexico caps a deposit at one month's rent on any lease shorter than a year. On an annual lease you may hold more, but a deposit above one month's rent earns the resident interest every year. You have 30 days after the lease ends or the resident leaves, whichever is later, to send the itemized deductions and the balance. Miss it and you lose the right to keep any of the deposit, to counterclaim, and to sue for the damage separately, on top of the resident's costs and attorney fees.
What New Mexico law says about security deposits
Read from the New Mexico statute on 2026-09-14. Deposit rules change, and this is general information rather than legal advice. Confirm the current text with your own counsel before you change a lease.
Can you require it of every New Mexico resident?
New Mexico has no statute written for a monthly fee charged instead of a deposit, so the arrangement rests on your lease and the general deposit rules. Section 47-8-18 lets an owner demand a reasonable deposit to cover damage the resident causes. On a rental agreement shorter than a year, the deposit may not exceed one month's rent. On an annual agreement there is no cap, but a deposit larger than one month's rent obliges you to pay the resident interest every year at the passbook rate. Last month's prepaid rent is not a deposit. When the residency ends, the deposit may be applied to rent and to damages beyond normal wear, and within 30 days of the termination or the resident's departure, whichever is later, the resident gets an itemized list of deductions and the balance. Miss that statement and you forfeit the right to withhold any of the deposit, to counterclaim in an action to recover it, and to sue separately for damage to the unit, and you owe the resident's court costs and attorney fees. A bad-faith retention adds a $250 civil penalty.
Rules differ by state and by city, and subsidized housing is its own question. This is general information for property managers, not legal advice. Get a written opinion before you make the fee a condition of tenancy anywhere.
How the program works in New Mexico
The mechanics are the same in every state Beagle operates in. The program is designed to comply with applicable state and local regulations, and the rate is set by the deposit amount rather than by geography, so a New Mexico property and one two states over are quoted the same way.
The resident chooses at signing
Instead of producing the full deposit, the resident pays a smaller non-refundable monthly fee that is billed with rent. Nothing is held, so nothing has to be returned.
The property keeps its protection
Damage beyond normal wear is reimbursed up to the deposit amount the unit would otherwise have required, so what you can recover does not shrink.
Move-out stops being a negotiation
A claim is filed against the program rather than deducted from money you are holding, which takes the itemised-deduction letter and the dispute that follows it off your team's desk.
You earn on every resident who takes it
You set an administrative fee on top of the premium, up to $5 per unit per month, and keep it.
New Mexico security deposit alternative FAQs
New Mexico has no statute answering that, so a mandatory version is a question for your own attorney. Section 47-8-18 governs a deposit demanded to cover damage, with the one-month cap on shorter leases and the interest rule on annual ones, so whether a monthly fee is such a deposit is where that review should begin.
See it on your New Mexico units
Run the program against your own unit count, or walk through it with our team. No upfront fees, no onboarding charges, no long-term contracts.