What Constitutes a Lease Agreement?
A lease agreement, or rental agreement, is a legally binding contract entered into between a landlord and a tenant for the usage of an apartment, house, unit, or other space. The purpose of such an agreement is to outline the terms of the rental transaction for the duration of the lease term.
A typical lease agreement in New Mexico will contain both federal and state laws that apply, which should be followed at all times. One of the common state laws found in a lease agreement is the New Mexico Residential Rental Property Act which outlines the rights of both the landlord and the tenant when entering into an agreement to lease. Some lease agreements also contain additional clauses that are not part of the statute, and it is important for both parties to understand the meaning of these provisions to abide by them .
There are few requirements of a lease agreement that are required under the law, although a legal lease agreement in New Mexico should at least contain the following basic components: a description of the property being leased, the information of the landlord and tenant names and addresses, the lease term (one year, month-to-month, etc), and information on what costs are included in the rent (utilities, internet, etc.) as well as which ones are not. As with any lease agreement, it is always advisable for tenants to read through the entire document before signing, including the fine print, so that there are no surprises later.
Different Categories of Lease Agreements in New Mexico
In New Mexico, lease agreements can be broken down into three categories. The first are standard residential lease agreements. Most people are familiar with the concept of a residential lease agreement, and if you cover the key points above, you should be fine with that type of contract. Typically, these agreements are for six or twelve months in length, and state things like the property address, the rent amount, the utilities in typically also the pets.
But in addition to such standard residential lease agreements, there are also commercial lease agreements, which are generally much more complicated than a typical residential lease agreement. In general, there are two kinds of commercial leases, net and gross leases. A gross lease in the simplest form provides that the tenant will pay either one, or all of the expenses of the property. The expenses include things like utilities and maintenance on the building. In a net lease, the expenses, which often include things like insurance premiums, property taxes, or condo fees, are transferred to the tenant from the landlord.
The third category of lease agreement in New Mexico are month to month agreements. Those agreements do not establish a fixed period of time, but allow the landlord to terminate the lease upon less than 30 days’ notice. Month to month agreements are very common for student housing. There is no difference in moving in and out of an apartment under a month to month rental agreement versus a rental agreement for a fixed period of time.
One important note regarding all lease agreements: verbal lease agreements only have a certain level of enforceability. For a lease agreement to be fully enforceable in New Mexico, the terms of the lease agreement must be put in writing.
Vital Provisions in New Mexico Lease Agreements
Unless a written lease is primarily for a term of 365 days or longer or for the sale of goods, none of the statutory terms mentioned below is required by the statute itself or must contain any particular language. However, as a matter of standard practice, all leases should contain the following clauses:
Payment of Rent and Other Charges — This clause should describe the amount of the rent. If the rent is to be paid in installments, then the amount of each installment and the date on which each installment is due should be included.
Security Deposits — Under the New Mexico Residential Rental Property Disclosure Act, the parties may agree in writing to obligations regarding security deposits. The landlord does not have to collect security deposits, but if he/she does, the lease should specify (1) the amount of the deposit, (2) the reasons for which the landlord, or a subsequent landlord, may make deductions from the security deposit upon termination of the tenancy, and (3) whether the landlord will place the deposit in an escrow account and, if so, the name and address of the institution in which the deposit will be placed.
Make or Make Good Repairs — The lease should specify whether the landlord or tenant is liable to make repairs and improvements to the property, including electrical and plumbing systems and any appliances provided by the landlord.
Alterations — The lease should state whether the tenant may make alterations and improvements to the property, and if so, the conditions under which the work may be done.
Condition of Rental Property — The lease should state whether the property is being rented "as is" or if the landlord will make repairs to the property prior to the rental period.
Termination Conditions — The lease should specify the length of the lease, the method and time in which the landlord and tenant may terminate or renew the lease, and dispositions of the property at the expiration of the rent term.
Eviction — The lease or an addendum must specify the grounds for eviction to comply with the Unlawful Detainer Act, N.M.S.A. 1978 § 42-12-1 to -14. The grounds for eviction include failure to pay rent, allowing illegal activity on the premises, using the property for an illegal purpose, violating the lease, or failure to maintain the premises.
Tenant Rights and Obligations — The lease should include signed representations by the tenant stating that the tenant has received a copy of the rental agreement and the property condition disclosure statement required by the Residential Rental Property Disclosure Act.
Legal Stipulations for Lease Agreements in the State of New Mexico
A periodic rental agreement is a lease for a period of one month or some shorter time, regardless of whether it is called a lease, covenant, contract or any other name. NMSA 1978 § 70-12-1 (2010).
A lease for a term of less than one year must be in writing and signed by the party to be charged or by that party’s lawfully authorized agent or broker when:
The contract for a lease has to consist of required terms. Unless the parties agree otherwise, an oral or written lease satisfies the statute of frauds. Rental agreements must be in writing if they involve a period longer than a year.
There are several rental agreement disclosure requirements under the New Mexico Uniform Owner-Resident Relations Act, which is codified at NMSA 1978 § 47-8-1 (1981). The disclosure requirements include the following:
Landlords must disclose prior to signing the lease whether a fee may be charged for services vital to tenant’s health or safety. If so, the fee must be separately stated. Landlord may choose to not charge for these services.
Lease agreements will automatically roll over from month to month if there are not written rental agreements in place between the landlord and tenant. If there is no written lease, and there has been a default in rent for 9 consecutive days, the landlord can turn off utilities, change locks, enter the unit, or retake the leased premises.
There are laws currently in effect dealing with lead-based paint disclosures in some cities and states. These disclosures are mandatory. Lead-based paint was commonly used in homes built before 1978. If you are living in a home constructed prior to 1978, you should look into lead-based paint dangers.
All structures built prior to 1978 must be inspected for chipping, peeling paint and dust that may contaminate the air. This is especially true for children because their bodies absorb the chemicals differently than adults. If you are interested in obtaining a lead-based paint forms, you should be able to find the form you need on the United States Environment Protection Agency website.
There will be a new Disclosure of Ownership and Management form that is being published for the landlords of the properties in New Mexico. This new document will be required for all residential leases in 2010.
Tenant’s and Landlord’s Rights and Duties
New Mexico law is very friendly to residential tenants and has no hesitation in protecting residential tenants from abusive or bad faith landlords. Even though the New Mexico Unfair Practices Act does not apply to residential tenancies, Chapter 47 of the New Mexico Statutes of 1978 provides a fast and effective remedy for tenants who are subject to any unfair or unlawful practices (the leasing and rent of homes and apartments is the only fair trade business covered by the New Mexico Unfair Practices Act). Our New Mexico Residential Landlord-Tenant Act provides a complete set of rights and duties of each party with a carefully crafted set of remedies for the tenant that includes:
every residential landlord shall at all times during the tenancy: All of these remedies allow for the tenant to recover attorney’s fees and costs if the tenant is successful. An aggressive tenant attorney will obtain large monetary awards as well as cost awards as just small penalties against landlords who fail to uphold their end of the bargain under New Mexico law. Hence an aggressive tenant attorney will help force a landlord who mistreats its tenants to behave properly. ‘Regardless of legal arguments that they may have made over the years that the tenant is a trespasser or that the Notice of Non-Renewal of Residential Lease form means they do not have to do anything to the unit or repair anything, these landlords and property managers quickly learn that our New Mexico Residential Landlord-Tenant Act is the law of the land and that it very clearly applies to our New Mexico property managers and landlords,’ states Brian Lampe, a Santa Fe landlord tenant attorney. The landlord also has a complete set of rights, such as to collect the rent and fees and to enforce the lease for any reason allowed by the Residential Landlord Tenant Act (or the lease between the parties). And the landlord may do so without court intervention or notice to the tenant pursuant the self-help remedy of nuisance abatement (if agreed to by the tenant). If a tenant violates the lease or refuses to pay the rent, the landlord can begin the eviction process as set out by our New Mexico Rules of Civil Procedure (notice of default, court hearing/summons, entry of judgment for possession and attorneys fees and costs) to swiftly evict the tenant . It is unreasonable for a tenant to interpret the lease, as many tenants do, to mean they can pay their rent any time they want or that the landlord has to give them weeks or months to move out. The law is quite clear that rent is due as specified in the lease and if the tenant doesn’t pay, the landlord through self-help (or court action) may evict them inconsistently with the lease and without much difficulty. A landlord need only prove that it is a legal resident of New Mexico and that a past rent payment was not made to recover possession of the apartment or single family home. Mutual consent of both the landlord and the tenant are not required for an unlawful detainer action. However the problems can arise if the tenant tries to stay in our New Mexico home or apartment after the lease has been satisfied or terminated (whether by implication by failure to pay rent, the medical marijuana law or otherwise). Once the rental period has ended, the tenant must move out of the residence at the end of the rental period or the tenant is subject to immediate eviction. The landlord can, and often does, pursue criminal trespass charges against the tenant who refuses to leave. Under New Mexico law, the landlord has a duty to keep the residential rental premises in a habitable condition (as evidenced by building codes) and to make reasonable repairs. ‘Our New Mexico residential property managers live in fear of the tenant attorney,’ states Belinda Beck, a real estate agent and property manager. ‘As quickly as a tenant can type, our managers receive a letter stating that the tenant’s lawyer will be contacting them even before they have had a chance to conduct a detailed inspection,’ states Belinda. ‘Our applications require three references and ask numerous questions about the tenant’s previous rental history and we obtain an eviction history from the New Mexico Courts,’ states Belinda. ‘People think that finding and evicting a bad apple tenant is difficult or expensive, but not with a good tenant attorney,’ states Belinda. ‘Our two rules for keeping good properties and good tenants are to vet the tenants and to have a capable tenant lawyer ready to assist us as soon as an issue arises.’
Dissolving a Lease Agreement in Accordance with the Law
A popular question from both landlords and renters is if they need a reason to terminate an existing lease. The short answer is, no. New Mexico landlords have few restrictions on their rights to enter a tenant’s rental unit, including the ability to terminate a lease. Tenants have a few restrictions, however. A lease may be terminated by the following means:
Fixing the problem.
A tenant can remedy a lease violation (i.e. pay rent owed) within the time specified in the lease to avoid termination.
Eviction
If a tenant refuses to vacate the premises after a termination, a landlord may file a formal eviction proceeding requesting that the Court order the tenant to vacate.
Condemnation
If a local municipality terminates a lease or occupancy agreement because of a dangerous condition under the Rental Property Rehabilitation Act, then the tenant may not be entitled to any remedy under the lease.
Notice
The minimum notice that a landlord must give a tenant prior to terminating a lease is one month, unless the lease explicitly provides otherwise. A tenant must provide a landlord at least two months’ notice prior to vacating the premises. In most cases, a landlord may not terminate a month-to-month tenancy without cause even if the tenant is not in default. A breach of a material provision of the lease by the tenant is grounds for the landlord to terminate the tenancy even if the tenant immediately cures the problem. Other property constituting a nuisance can also be grounds for termination. Exceptions exist if the tenant is at least 62 years old and has resided in the premises for at least six months.
A tenant may break a lease early for several reasons, such as an unsafe or uninhabitable unit, military service or if the person is a survivor of domestic violence, which includes both actions for sexual assault and actual or suspected abuse at the hands of the tenant’s current or former cohabitation. In the case of domestic violence, survivors must give a written notice intent to vacate and provide a copy of the domestic violence protection order to the landlord. A tenant who breaks a lease without cause may be in violation of the agreement and subject to penalties.
Common Legal Disputes and Their Resolutions
While lease agreements are intended to prevent disputes, they do not eliminate them completely. Among the most frequent disputes between landlords and tenants in New Mexico are issues relating to security deposits, noise complaints, and maintenance requests. The role of a small claims court in resolving disputes and mediation through third-party intermediary are also explained.
Security Deposits
Landlords often face disputes with tenants about security deposits. New Mexico law states that security deposits cannot be used by tenants to pay the last month’s rent. Additionally, New Mexico Statutes Section 47-8-18(E) states:
A landlord who retains a security deposit may retain from that security deposit any amount reasonably necessary to remedy a tenant’s breach of the rental agreement.
As a result, tenants have often retained security deposits to offset amounts they believed were improperly deducted. It is important for landlords to create an atmosphere of good will by promptly providing documentation and explanation of the decision to use a security deposit to offset unpaid rent.
Noise Complaints
Noise complaints are another source of disputes. Tenants sometimes feel landlords are not responsive to noise complaints. A landlord’s failure to resolve a noise complaint can form the basis for a constructive eviction. A tenant can potentially sue a landlord for damages if a landlord fails to take reasonable measures to prevent or minimize noise following a tenant’s complaint.
Maintenance Delays
Tenants often complain landlords are slow to respond to maintenance requests . New Mexico tenants should know they have a right to "habitable premises," which means provision of essential services, like water, electricity, and heat. If a landlord refuses to repair essential services, a tenant may be eligible for damages. However, tenants cannot withhold rent by failing to pay rent to the landlord to force a landlord to repair essential services.
Litigation
If tenants and landlords are unable to resolve a dispute informally, a tenant may file a complaint with the Department of Housing and Urban Development. HUD will investigate the complaint and determine if the claim has merit. HUD can mediate a settlement, issue a charge of discrimination, and refer the claim to the Department of Justice if it believes the complaint implicates enforcement of the Fair Housing Act. However, HUD does not have the authority to initiate a lawsuit or award money to victims.
If informal resolution procedures fail, small claims court is an option and may be faster than filing a complaint in district court. The potential damages awarded in small claims court are limited. Tenants can only recover less than $10,000 for any action. A tenant bringing an action in small claims court does not have to hire an attorney and will not be held to the same level of professional decorum as they would be in district court.
Mediation
A tenant may also be able to file a private lawsuit and request courts to refer the parties to mediation. Mediation allows parties to have a third-party intermediary help resolve the dispute. Mediation costs money but is usually is much less expensive than litigation and avoids the time-consuming process of district court.