[NM] [NM] Can a tenant’s last-month’s rent be applied to this month?

Lexi, Chatbot

I see, that sounds like a tricky spot. Has your tenant provided any written request or documentation regarding this issue?

Lexi, Chatbot

Alright, is there a lease agreement in place that specifies how the last month's rent should be handled?

Lexi, Chatbot

Got it. Have you had any previous agreements or discussions with the tenant about using the last month's rent in this way?

Lexi, Chatbot

OK. Thanks for the info. How would you like to connect with the Lawyer?

Andres Sanchez

Hi there! I'm Andres Sanchez, your go-to expert for landlord-tenant issues. It sounds like you're navigating a tricky situation with your tenant, and I'm here to help you find the best solution. What state are you in?

Andres Sanchez

Okay. What state is this in?

Andres Sanchez

In New Mexico, rent payments must be made in accordance with the rental agreement. (NM Stat § 47-8-15(A))

Unless the lease specifies otherwise, tenants are required to pay rent as scheduled, and landlords are not obligated to apply prepaid rent toward current rent unless both parties agree to such an arrangement. Specifically, under New Mexico law, unless agreed upon in writing by the landlord and the tenant, a tenant's payment of rent may not be allocated to any deposits or damages.

If your lease includes a clause for "last month's rent" as a prepaid amount, it is intended to cover the final month of tenancy, not to be used for earlier months. However, if both you and your tenant agree to apply this prepaid amount to the current month's rent due to unforeseen circumstances, such as car problems, it's advisable to document this agreement in writing.

This documentation should clearly state that the prepaid rent is being applied to the current month and outline any implications for the end of the tenancy, including how the final month's rent will be handled.

It's important to note that while flexibility can be beneficial in maintaining a good landlord-tenant relationship, any modifications to payment arrangements should be clearly documented to prevent misunderstandings. If you choose to allow the use of the last month's rent for the current month, ensure that both parties sign the written agreement, and keep a copy for your records.

Andres Sanchez

If the lease agreement only states that a prepayment was made but doesn't specify that it's for “last month’s rent,” then legally, you are not bound to apply it toward any specific month—including the final month or the current one—unless both parties agree in writing.

Andres Sanchez

Here’s how to handle it:

Options You Have

Agree to apply the prepayment now:
You can agree to apply it toward this month's rent due to the tenant's hardship, but you should clearly document that in writing. The written agreement should include:

• That you're allowing use of the prepayment for May 2025 rent

• That the tenant still owes full rent in the final month unless otherwise agreed later

• A statement that this is a one-time arrangement due to financial hardship

Decline and require May rent now:
You can hold the prepayment in reserve (e.g., to apply at move-out or the final month) and ask the tenant to pay rent for May as usual. This is well within your rights.

Andres Sanchez

Do you have any other questions?

Andres Sanchez

You're welcome. I hope everything works out for you.

Andres Sanchez

My pleasure.