Does Paying the Last Security Deposit Lock You Into the Lease?

Attorney Answer

No. Paying the last $109 will not extend or renew anything, and refusing to pay it will not get you out. Your obligation runs for the year because that is what the lease you signed says — the deposit is a separate line item, not the thing that creates the term.

Security deposits are governed by NMSA 1978, § 47-8-18, and that statute is about the deposit itself, not about how long a lease lasts. Under § 47-8-18(A), an owner may demand a reasonable damage deposit; under a rental agreement of less than one year the deposit may not exceed one month's rent, while under an annual agreement a deposit exceeding one month's rent requires the owner to pay you annual passbook-rate interest. Because yours is a one-year lease, the one-month cap does not apply to you. Prepaid last month's rent is not a deposit, § 47-8-18(B).

What § 47-8-18 does give you is protection on the way out. No deposit may be retained for normal wear and tear, and within thirty days of termination or your departure — whichever is later — the owner must give you an itemized written list of deductions along with the balance, § 47-8-18(C). Failure to do that forfeits the owner's right to bring an independent action for damages, § 47-8-18(D), and bad-faith retention carries a $250 civil penalty payable to you, § 47-8-18(E).

The real risk in your situation is not the $109. It is that leaving before the year is up can leave you owing the remaining rent under the lease, which is a much larger number. That is the thing to solve.

What you can do

1. Read your lease for three things: the exact end date, any early termination clause, and any buyout or reletting fee. 2. Ask the landlord in writing whether he will agree to a mutual termination, a buyout, or letting you find a replacement tenant. Get any agreement signed before you move a single box. 3. Pay the $109 if the lease requires it. It is a debt you already owe under the lease, not a new commitment, and leaving it unpaid just adds to what can be claimed against you. 4. Write down exactly why you are afraid there. If it is the condition of the unit, or the conduct of another person, that can open limited early-termination options that ordinary dissatisfaction does not — but it depends entirely on the reason, so get it in front of New Mexico Legal Aid. 5. Before you leave, do a walkthrough with dated photos of every room, and give the landlord a written forwarding address so the § 47-8-18(C) itemization can reach you. 6. If the deposit is not returned or itemized within thirty days, raise § 47-8-18(D) and the $250 penalty under § 47-8-18(E).