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New Mexico · NMSA 1978, §§47-8-18, 47-8-21New Mexico tenant deposits when selling a rental: the buyer takes over after written notice

Unless otherwise agreed, when a New Mexico owner's interest ends – by sale or otherwise – the owner is relieved of liability for events after written notice to the resident, and the successor in interest is liable for all obligations under the rental agreement and the Uniform Owner-Resident Relations Act; after the notice, the resident pays future rent to the successor (NMSA 1978, §47-8-21(A)). Those obligations include the deposit rules: for leases under a year the deposit can't exceed one month's rent, and a deposit above one month's rent on an annual lease earns interest; at the end of the tenancy the owner sends an itemized statement within 30 days, or forfeits the right to withhold any part and pays the resident's costs and attorney's fees, plus $250 for bad-faith retention (§47-8-18).

The rules

  1. 1. Seller (§47-8-21(A))

    Relieved for events after written notice to the resident.

  2. 2. Buyer (§47-8-21(A))

    Liable for all obligations under the lease and the act.

  3. 3. Cap (§47-8-18(A))

    One month's rent for leases under a year; interest above that on annual leases.

  4. 4. Return (§47-8-18(C)–(E))

    Itemized statement within 30 days; $250 for bad faith.

What the TC can do

  • Collect each lease and deposit amount in a rent roll before closing.
  • Ask the closing agent to credit the buyer for the deposits it takes on.
  • Prepare the seller's written notice of the sale to each resident.

Questions about New Mexico tenant deposits at sale

Who returns the deposit after a New Mexico rental is sold?

The successor in interest, which is liable for all obligations under the rental agreement and the act once the resident gets written notice (NMSA 1978, §47-8-21(A)).

How long does a New Mexico owner have to return a deposit?

An itemized statement of deductions is due within 30 days of the end of the tenancy (NMSA 1978, §47-8-18(C)).

Related guides

Add the rent roll, the deposit credit and the resident notices as tasks in ClosingCode.

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Source: NMSA 1978, §§47-8-18 and 47-8-21 (New Mexico Statutes Annotated 1978 at nmonesource.com, read October 28, 2026).

General information, not legal advice. ClosingCode is software; it is not a law firm or brokerage. This guide is not a substitute for the advice or services of an attorney.