New Mexico HOA Assessment Limits

Key Findings

• No numeric cap exists in New Mexico. Unlike California's Cal. Civ. Code § 5605, which caps regular increases at 20 percent and special assessments at 5 percent without a member vote, New Mexico statutes contain no percentage limit for condominiums or HOAs.¹
• Condominium control is procedural, not numeric. The check on increases runs through the § 47-7C-3(C) ratification process, under which a budget stands unless a majority of all owners reject it.²
• The "six-month priority" assumption does not hold for New Mexico's enacted text. The compiler's note to § 47-7C-16 states that UCA § 3-116(b) — the lien-priority subsection — "is not incorporated by this section of the state Condominium Act." The six-month language survives only in the uniform act's Commissioners' Comment.³
• HOAs are declaration-driven. The Homeowner Association Act is a disclosure and governance statute — not an assessment-cap or budget-ratification statute.⁴
• No dedicated regulator. The New Mexico Secretary of State handles corporate status; assessment disputes run through the District Courts, the Court of Appeals, and discretionary review by the Supreme Court.⁵

Details

Section 1 — Overview

New Mexico draws no line at how much a condominium board can raise assessments. The board proposes a budget, sends unit owners a summary, and that budget takes effect unless a majority of all unit owners vote it down. Non-condominium homeowner associations look to the recorded declaration — not state law — for whatever limits they have.² The framework for condominiums is the New Mexico Condominium Act (N.M. Stat. §§ 47-7A-1 to 47-7D-20), modeled on the 1980 Uniform Condominium Act, with the budget mechanism in N.M. Stat. § 47-7C-3(C).⁶ Regular increases work through ratification by rejection: the executive board adopts the budget, sends owners a summary, holds a ratification meeting, and the budget takes effect unless owners reject it — with no numeric limit on the size of the increase.² The declaration and the same budget and assessment provisions authorize special assessments, and any unpaid assessment becomes a lien on the unit that the association may foreclose like a mortgage.³ On the national assessment-limit spectrum, New Mexico sits with the ratification-mechanism states — where owners hold a veto over an adopted budget — rather than with statutory-cap states such as California, and its non-condominium HOAs sit with the declaration-driven states.¹ The sections below walk through the authority to levy, the limits on increases, the lien, the procedures in practice, recent legislative and judicial activity, and where New Mexico fits nationally.

Section 2 — The assessment framework

2A. Authority to levy and allocate assessments

In a condominium, the unit owners' association holds statutory authority to adopt and amend budgets for revenues, expenditures, and reserves and to collect assessments for common expenses — a power the executive board exercises on the association's behalf.⁷ Allocation is declaration-driven: under N.M. Stat. § 47-7C-15, all common expenses go against the units in the proportions the declaration sets out, with carve-outs for limited common elements, expenses benefiting fewer than all units, insurance assessed in proportion to risk, utilities assessed in proportion to usage, judgment assessments, and expenses caused by an owner's misconduct.⁸ Past-due common expense assessments carry interest at the rate the association sets, not exceeding eighteen percent per year.⁸

For non-condominium homeowner associations, assessment authority does not come from a state assessment statute. It comes from the recorded covenants and the association's corporate powers under the New Mexico Nonprofit Corporation Act (N.M. Stat. §§ 53-8-1 to 53-8-99), under which most associations organize.⁹ The New Mexico Homeowner Association Act (N.M. Stat. §§ 47-16-1 to 47-16-18, enacted 2013) overlays disclosure and governance duties, including a requirement under § 47-16-7 that the board or the lot owners adopt a budget annually and circulate it.¹⁰ In both settings, the board holds the power to set the assessment through the budget, and in both, the declaration controls the allocation formula.

2B. Limits on regular assessment increases

For condominiums, the operative control is the ratification procedure in N.M. Stat. § 47-7C-3(C). Within thirty days after the executive board adopts a proposed budget, the board must provide a summary of the budget to all unit owners and set a date for a ratification meeting — not less than fourteen nor more than thirty days after the summary goes out.² The statute provides: "Unless at that meeting a majority of all the unit owners or any larger vote specified in the declaration reject the budget, the budget is ratified, whether or not a quorum is present."²

New Mexico imposes no percentage cap on the increase. The only state-law checks are the ratification process itself and whatever limits the declaration contains. Ratification runs by rejection, not by affirmative approval: owner inaction results in ratification. If owners do reject the proposed budget, the last-ratified periodic budget continues until the board proposes — and owners ratify — a subsequent budget.² A defective process — such as a missing summary or a meeting noticed outside the fourteen-to-thirty-day window — exposes the increase to challenge because the board failed to meet the statutory predicate for ratification.

Non-condominium HOAs have no statutory ratification step. Their regular increases fall entirely under the recorded declaration and bylaws, subject to the Homeowner Association Act's annual budget and disclosure duties.¹⁰

2C. Special assessments, the lien, and the six-month question

Special assessments in a condominium run through the budget and assessment provisions (§ 47-7C-15) and the declaration — which is where any cap, owner-vote trigger, or emergency procedure lives.⁸ Under N.M. Stat. § 47-7C-16, the association holds a lien on a unit for any assessment or fine from the time it becomes due, and may foreclose that lien in the same manner as a mortgage on real estate.³ Recording the declaration constitutes record notice and perfection of the lien, so the association need not record a separate claim of lien. The lien expires unless enforcement proceedings begin within three years after the full amount becomes due, and a prevailing party may recover costs and reasonable attorney fees.³ On written request, the association must furnish a recordable statement of unpaid assessments within ten business days — binding on the association, the board, and every owner.³ Subsection H provides that, to the extent the declaration so provides, the lien is subordinate to other liens or encumbrances.³

Importantly, New Mexico did not enact the Uniform Condominium Act's lien-priority subsection (UCA § 3-116(b)); the compiler's note to § 47-7C-16 states that subsection "is not incorporated by this section of the state Condominium Act," so the six-month super-priority over a prior first mortgage that appears in the uniform act's Commissioners' Comment is not part of New Mexico's enacted statute.³ Operationally, a New Mexico condominium board runs the ratification process and holds a recorded, foreclosable assessment lien whose priority general recording and mortgage law — and any subordination in the declaration — establish, rather than a statutory super-priority. HOAs set and lien assessments under the declaration, with a parallel lien provision in § 47-16-6.¹¹

Section 3 — Assessment limits and procedures in practice

A. Regular assessment increase procedure

For condominiums, the board adopts the budget, provides a summary to all unit owners within thirty days, and sets a ratification meeting fourteen to thirty days after mailing; the budget stands unless a majority of all owners reject it (N.M. Stat. § 47-7C-3(C)).² For non-condominium HOAs, the declaration defines the increase procedure, with no statutory ratification rule, subject only to the annual budget and disclosure duties of N.M. Stat. § 47-16-7.¹⁰

B. Special assessment procedure

For condominiums, special assessments run through the common-expense assessment provision (N.M. Stat. § 47-7C-15) and any procedure, cap, or owner-vote trigger in the declaration; no separate statutory special-assessment cap exists.⁸ For non-condominium HOAs, special assessments are entirely declaration-defined, with no statutory rule.

C. Caps, ceilings, and override mechanisms

New Mexico supplies no percentage cap on regular or special assessments for either condominiums or HOAs. For condominiums, the ratification-by-rejection mechanism in § 47-7C-3(C) plus any declaration-based limit provides the operative control.² For HOAs, any ceiling or owner-approval requirement exists only if the declaration creates it.

D. Notice, documentation, and disclosure tied to assessments

For condominiums, the budget summary and the ratification-meeting notice are the core assessment disclosures (§ 47-7C-3(C)), and the association must furnish a recordable statement of unpaid assessments within ten business days of a request (§ 47-7C-16(G)).³ For HOAs, the Homeowner Association Act requires that records stay open to lot owners, that an annual budget be adopted and circulated with a statement of all fees and fines, and that a recordable statement of unpaid assessments be furnished within ten business days (N.M. Stat. §§ 47-16-5, 47-16-6, 47-16-7).¹⁰

Section 4 — Recent legislative and judicial activity

4A. Recent bills

Two additional 2025 bills touched associations but not assessment limits: HB 232, which would have prohibited certain homeowner association fees focused on transfer fees, died in committee; and SB 239, a homeowner association lot owner remedy establishing an Attorney General complaint mechanism, died in the Senate.¹⁴

4B. Recent appellate rulings

A targeted review of New Mexico Compilation Commission and New Mexico Courts opinion repositories for 2023 through 2026 found no New Mexico Court of Appeals or New Mexico Supreme Court opinion that squarely decides assessment authority, the validity of an assessment increase or special assessment, budget ratification under § 47-7C-3, or the assessment lien under § 47-7C-16. One 2025 Court of Appeals memorandum opinion, Ross v. Villa Del Rio Homeowners Association, Inc. (No. A-1-CA-42101, July 3, 2025), involved an HOA as a party but resolved through a one-paragraph summary affirmance that does not state the underlying subject, so it cannot be cited as assessment authority.¹⁵ Because no material on-point New Mexico appellate ruling exists in this window, this subsection is intentionally short rather than padded.

4C. Active legislative debates

The live debate most relevant to assessments concerns HOA lien-foreclosure limits, reflected in HB 440 (2025), which would have set dollar and delinquency thresholds before an HOA could foreclose an assessment lien; no measure altering the § 47-7C-3 ratification process or the § 47-7C-16 lien priority advanced in 2025.¹³

Section 5 — National positioning and related coverage

New Mexico sits in the middle band of a three-part national spectrum on assessment limits. At one end are statutory-cap states, led by California, where Cal. Civ. Code § 5605 provides that "the board may not impose a regular assessment that is more than 20 percent greater than the regular assessment for the association's preceding fiscal year or impose special assessments which in the aggregate exceed 5 percent of the budgeted gross expenses of the association for that fiscal year" without member approval.¹ In the middle are ratification-mechanism states — including Alaska, Colorado, Connecticut, Delaware, Maine, Minnesota, Missouri, Nebraska, Nevada, Vermont, Washington, and New Mexico for condominiums — where owners hold a veto over an adopted budget, and many of which pair that mechanism with a super-priority lien. At the other end are declaration-driven states such as Alabama, Arkansas, and Georgia, where assessment limits come from the declaration — which is also how New Mexico treats its non-condominium HOAs. For a multi-state operator entering New Mexico, the practical implication is that a condominium budget takes effect unless owners affirmatively reject it, and that the condominium assessment lien is recorded and foreclosable but, unlike the uniform model some ratification-mechanism states adopt, carries no enacted six-month super-priority over a first mortgage and may be subordinated where the declaration so provides.³ New Mexico condominiums follow the Uniform Condominium Act model for governance, while disclosure rules and the declaration govern non-condominium HOAs.

Recommendations

1. Treat the condominium budget as ratified by default, and calendar the § 47-7C-3(C) deadlines. Boards and managers should mail the budget summary within thirty days of adoption and notice the ratification meeting fourteen to thirty days out. The benchmark that would change this step is any future statutory amendment adding an affirmative-approval requirement or a percentage cap; absent that, the ratification-by-rejection default controls.
2. Do not assume a six-month lien super-priority in New Mexico. Because the enacted § 47-7C-16 omits the Uniform Condominium Act priority subsection, condominium associations and their counsel should establish lien priority through recording dates and the declaration, and should review each declaration for a subsection H subordination clause before relying on the lien against a first mortgagee. The trigger to revisit this is enactment of a bill adding a statutory priority provision.
3. For non-condominium HOAs, treat the declaration as the source of all assessment limits. Build assessment ceilings, owner-vote triggers, and special-assessment procedures from the recorded covenants, and use the Homeowner Association Act only for disclosure, records-access, and annual-budget duties.
4. Adopt remote-meeting and electronic-notice procedures consistent with SB 72. Capture advance owner consent to electronic notice so that a remote ratification meeting is enforceable; the threshold that would expand or restrict this is any follow-on legislation refining electronic-voting mechanics.
5. Monitor HOA lien-foreclosure legislation. HB 440's twelve-month, $5,000, and fines-only thresholds did not pass but signal legislative interest; reintroduction and passage would directly constrain HOA assessment-lien enforcement and should prompt a same-quarter update to collection policies.

Caveats

• Six-month priority finding. This page departs from the common assumption that New Mexico's condominium lien carries a six-month priority over a prior first mortgage. Primary-source verification shows the enacted statute (subsections A–H) contains no such priority, and the compiler's note states the uniform act's priority subsection "is not incorporated." The six-month language appears only in the non-binding Commissioners' Comment reproduced alongside the statute. Readers relying on the lien against a senior lender should obtain a current certified copy of § 47-7C-16 and counsel's opinion.
• Statute currency. Staff verified statutory text against publicly available codifications of the New Mexico Statutes (2024–2025 compilations); consult the official New Mexico Compilation Commission text at nmonesource.com for the controlling current version, particularly for any changes after the 2025 session.
• Judicial gap. The absence of an on-point New Mexico appellate decision in 2023–2026 means several questions — for example, the consequence of a defective ratification, or the interaction of subsection H subordination with a foreclosing lender — are not settled by recent published case law and may be resolved differently as litigation arises.
• Unverified memorandum opinion. Ross v. Villa Del Rio HOA could not be confirmed to concern assessments and is not treated as authority here.

1. Cal. Civ. Code § 5605(b) (20 percent regular assessment / 5 percent special assessment caps without member approval) ↩
2. N.M. Stat. § 47-7C-3(C), Executive board members and officers (budget ratification mechanics) ↩
3. N.M. Stat. § 47-7C-16, Lien for assessments (subsections A–H and compiler's note re UCA § 3-116(b) not incorporated) ↩
4. N.M. Stat. §§ 47-16-1 to 47-16-18, Homeowner Association Act (disclosure and transparency statute) ↩
5. RunHOA, New Mexico State Laws (no dedicated HOA regulator; enforcement through notices and courts) ↩
6. Homeowners Protection Bureau, New Mexico Condominium Act §§ 47-7A-1 to 47-7D-20 (based on 1980 Uniform Condominium Act) ↩
7. N.M. Stat. § 47-7C-2, Powers of unit owners' association (adopt budgets; collect assessments) ↩
8. N.M. Stat. § 47-7C-15, Assessments for common expenses (allocation per declaration; 18 percent interest cap on past-due assessments) ↩
9. N.M. Stat. §§ 53-8-1 to 53-8-99, Nonprofit Corporation Act ↩
10. N.M. Stat. § 47-16-7, Board members and officers; duties; budget (annual budget adoption and circulation) ↩
11. N.M. Stat. § 47-16-6, Duties of a homeowner association (parallel HOA assessment lien; recordable statement within ten business days) ↩
12. N.M. Legislature, SB 72 (2025) Fiscal Impact Report (Condominium and Nonprofit Corporation Act remote-business amendments; effective June 20, 2025); LegiScan vote record ↩
13. N.M. Legislature, HB 440 (2025) Fiscal Impact Report (HOA lien-foreclosure thresholds; amends § 47-16-6; action postponed indefinitely) ↩
14. CAI, 2025 New Mexico Legislative Session Report (SB 72, HB 440, HB 232, SB 239) ↩
15. Ross v. Villa Del Rio Homeowners Association, Inc., No. A-1-CA-42101 (N.M. Ct. App. July 3, 2025) (summary affirmance; subject not stated) ↩