New Mexico Late Fee Laws: Limits and Mandatory 5-Day Grace Period

New Mexico heavily regulates how and when a landlord can charge a late fee. Under the Uniform Owner-Resident Relations Act (UORRA), there are strict calculation requirements for allowable late fees.

The 10% Late Fee Cap

Under NMSA § 47-8-15(D), the maximum late fee a New Mexico landlord can charge is 10% of the total rent for each rental period.

The Calculation Rule

Late fees must be calculated strictly on the base rent amount. Landlords are prohibited from calculating late fees on top of other charges, such as:

• Security deposits.
• Unpaid utilities.
• Previous unpaid late fees (compounding late fees are illegal).
• Other administrative charges.

Lease Requirements

For a late fee to be legally enforceable, it must meet two criteria:

1. Specified in the Lease: The exact late fee amount or percentage (up to 10%) must be clearly stated in the written rental agreement. If the lease is silent on late fees, none can be charged.
2. No Unfair Practices: Charging undisclosed or unauthorized late fees is now classified as an unfair or deceptive trade practice in New Mexico.

The Mandatory 5-Day Grace Period

Unlike many other states, New Mexico law does mandate a grace period. Under NMSA 47-8-15(D), no late fee may be assessed by an owner until the fifth day after the rent is due. Any late fee charged before the five-day period has elapsed is a violation of the Uniform Owner-Resident Relations Act.

Notice Requirements

For a late fee to be legally enforceable, the landlord must provide the resident with written notice of the late fee assessment no later than the last day of the month in which the late fee is assessed. Failure to provide this timely written notice results in a waiver of the late fee for that period.

Interaction with Eviction

In New Mexico, a landlord can serve a 3-Day Notice to Pay or Quit the day after rent is due. The landlord does not have to wait to charge a late fee before beginning the eviction process.

How Landager Helps

Landager tracks lease terms, payment schedules, and maintenance requests - making it easy to stay compliant with New Mexico regulations.

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