New Mexico HOA Budget Approval

New Mexico HOA Budget Approval

Section 1 — Overview: How HOA budgets are approved in New Mexico

In New Mexico, the kind of community you live in determines how your association approves its budget — and those mechanisms differ enough that a single rule does not cover both. Condominiums created under the New Mexico Condominium Act use a negative-option budget-ratification system: the executive board adopts a proposed budget, and it takes effect by default unless a majority of all unit owners vote to reject it.1 Planned communities under the limited New Mexico Homeowner Association Act take their budget direction from the association’s recorded declaration, subject to that Act’s disclosure rules — the statute imposes no ratification or rejection step.2

Older condominiums created before the Condominium Act’s effective date fall instead under the predecessor Building Unit Ownership Act, unless the owners have recorded a resolution opting into the newer statute.3 That makes New Mexico a 1980-Uniform-Condominium-Act state for condominiums, paired with a separate, limited 2013 planned-community statute that does not follow the uniform model.4 The table and per-statute walkthrough below set out each mechanism in sequence.

Section 2 — The budget approval mechanism

2A. Quick-Reference Budget Mechanics Table

This table covers the New Mexico Condominium Act for condominiums and the New Mexico Homeowner Association Act for planned communities. Condominiums created before the Condominium Act’s effective date fall under the Building Unit Ownership Act instead.

Parameter Condominiums (Condominium Act) Planned communities (Homeowner Association Act)
Governing statute section(s) N.M. Stat. Ann. §§ 47-7A-1 to 47-7D-20; budget mechanic at § 47-7C-3(C)5 N.M. Stat. Ann. §§ 47-16-1 to 47-16-18; budget duty at § 47-16-7(E)6
Community types covered Condominiums created on or after May 19, 19827 Planned communities / homeowner associations with a recorded declaration8
Body that adopts the proposed budget Executive board Board, or the lot owners, as the community documents provide
Approval model Negative-option ratification by unit owners Annual adoption per community documents; no statutory ratification step
Budget summary distribution deadline Within 30 days after adoption Copy of budget within 30 calendar days after adoption
Ratification meeting notice window Meeting set not less than 14 nor more than 30 days after mailing the summary Not specified by statute; governed by recorded declaration
Owner rejection threshold Majority of all unit owners, or a larger vote specified in the declaration Not specified by statute; governed by recorded declaration
Quorum required to ratify None; budget is ratified whether or not a quorum is present Not specified by statute; governed by recorded declaration
Effect of owner rejection Last ratified periodic budget continues until owners ratify a subsequent budget Not specified by statute; governed by recorded declaration
Statutory cap on assessment increase absent owner vote None under the Condominium Act None under the Homeowner Association Act
Special assessment approval threshold Not specified by statute; governed by recorded declaration (board adopts amended budgets; assessments levied per § 47-7C-15)9 Not specified by statute; governed by recorded declaration
Reserve study mandate (and frequency) None under the Condominium Act10 None under the Homeowner Association Act
Reserve funding mandate None; reserves are permitted budget components, not mandated Not specified by statute; governed by recorded declaration
Audit or financial review tied to budget cycle Not specified by statute; governed by recorded declaration Financial audit, review, or compilation at least every three years by an independent CPA11
Provisions variable by declaration Rejection threshold may be raised; assessment allocation, reserves, and special assessments per declaration Most budget mechanics, including who adopts the budget

2B. The budget approval sequence under each statute

For a condominium governed by the Condominium Act, budget adoption follows four steps set out in N.M. Stat. Ann. § 47-7C-3(C) — a negative-option process in which the board acts and the budget takes effect unless owners push back. The executive board adopts a proposed budget first; the statute grants the association, acting through its board, the power to “adopt and amend budgets for revenues, expenditures and reserves.”12 Within 30 days of adoption, the board sends every unit owner a summary and schedules a ratification meeting “not less than fourteen nor more than thirty days after mailing of the summary.”13 At the meeting, owners do not affirmatively vote to approve the budget. 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.”14 That last clause is the mechanism’s defining feature: the budget takes effect regardless of attendance, and silence is approval. If owners do reject the budget, “the periodic budget last ratified by the unit owners shall be continued until such time as the unit owners ratify a subsequent budget proposed by the executive board.”15

Ratifying the budget is distinct from levying the assessment. Once a budget is in effect, the association assesses common expenses against all units under N.M. Stat. Ann. § 47-7C-15; except for certain limited categories, “all common expenses shall be assessed against all the units in accordance with the allocations set forth in the declaration.”16 Rejecting a proposed budget does not stop assessments — collection continues under the last ratified budget. The association’s lien for unpaid assessments arises separately under N.M. Stat. Ann. § 47-7C-16.17

For a planned community under the Homeowner Association Act, the framework is markedly thinner. N.M. Stat. Ann. § 47-16-7(E) requires only that “the board or the lot owners, as provided for in the community documents, shall adopt a budget annually,” and that “within thirty calendar days after adoption of any proposed budget for the association, the board shall provide a copy of the budget to all the lot owners.”18 The statute provides no ratification meeting, no owner rejection right, and no quorum rule. Who adopts the budget — and any approval threshold — depends entirely on the recorded declaration and bylaws. The board must also provide, along with the annual budget, a statement listing all fees and fines that may be charged to a lot owner.

2C. Pre-1982 condominiums and variation

A condominium created before the Condominium Act’s effective date operates under the Building Unit Ownership Act, N.M. Stat. Ann. §§ 47-7-1 to 47-7-28.19 N.M. Stat. Ann. § 47-7A-2 draws the line: the Condominium Act applies to all condominiums created after its effective date, the Building Unit Ownership Act does not apply to those newer condominiums, and a pre-Act condominium “shall become subject to the Condominium Act and not the Building Unit Ownership Act if a resolution to that effect is approved by a majority of the unit owners and is then recorded.”20 The Building Unit Ownership Act requires associations to maintain books of receipts and expenditures available for examination, but it does not carry the negative-option budget mechanism.21

Within the Condominium Act, the negative-option mechanism in § 47-7C-3(C) is mandatory, but the declaration may raise the rejection threshold above a simple majority. Assessment allocation, reserve practices, and special assessments are largely declaration-driven. For planned communities, budget adoption mechanics are overwhelmingly declaration-driven, subject only to the Homeowner Association Act’s disclosure rules.

Most New Mexico associations also organize as nonprofit corporations under the New Mexico Nonprofit Corporation Act, N.M. Stat. Ann. §§ 53-8-1 to 53-8-99.22 That Act supplies corporate formalities — including board management of the corporation’s affairs — but it contains no budget-approval threshold. It is a corporate overlay, not a source of budget-ratification rules.

Section 3 — Budget-adjacent obligations

Reserves in the budget

The Condominium Act, built on the 1980 Uniform Condominium Act, contains no reserve-study mandate and no minimum reserve-funding requirement. The statute defines “common expenses” to include “any allocations to reserves” and authorizes the association to adopt budgets “for revenues, expenditures and reserves” — but it sets no required study or funding level.23 The Homeowner Association Act likewise imposes no reserve-study or reserve-disclosure mandate. Reserve practice in New Mexico is therefore declaration-driven under both acts.

Special assessments

The Condominium Act sets no separate special-assessment approval threshold. The board’s authority to adopt and amend budgets, combined with the association’s authority to levy common-expense assessments under § 47-7C-15, supplies the mechanism — with allocation governed by the declaration.24 The Homeowner Association Act treats special assessments the same way: they remain governed by the recorded declaration.

Assessment increase limits

Neither act caps the percentage by which assessments may increase. New Mexico has no Davis-Stirling-style increase limit. Any cap on assessment increases must come from the recorded declaration or bylaws.

Financial review, audit, and disclosure tied to the budget cycle

The Homeowner Association Act carries the more specific financial-review requirement. Under N.M. Stat. Ann. § 47-16-10, “at least every three years, the board shall provide for a financial audit, review or compilation of the association’s records in accordance with generally accepted accounting principles by an independent certified public accountant”; the cost is assessed as a common expense, and the result goes to lot owners within 30 calendar days of completion.25 The Act also requires associations to make financial and other records available to a lot owner within ten business days of a written request, with a statutory penalty for noncompliance.26 The Condominium Act requires the association to keep records but ties no specific audit cycle to the budget; audit practice for condominiums is governed by the declaration.

Section 4 — Recent legislative and judicial activity

Recent bills

The 2025 New Mexico legislative session produced one significant change for condominium associations and several proposals that did not become law.

Status Signed
⌖ Last verified June 16, 2026
Docket

SB 72 · Ch. 62 · 2025 Regular Session

Effective
June 20, 2025
Sunset
N/A
Nonprofit Condo & Homeowner Association Remote Business
Synopsis

Sponsored by Sen. Peter Wirth and Rep. Christine Chandler, this bill amended the Condominium Act and the Nonprofit Corporation Act to authorize electronic notice of meetings, virtual attendance, and electronic voting. It updated N.M. Stat. Ann. §§ 47-7C-8 and 47-7C-9 (meeting notices and quorums) and §§ 53-8-15, 53-8-16, and 53-8-22 of the Nonprofit Corporation Act.27,28 The bill passed both chambers unanimously — 37–0 in the Senate on February 19, 2025 and 66–0 in the House on March 18, 2025 — and the Governor signed it as Chapter 62 on April 7, 2025. It did not change the negative-option budget-ratification mechanism in § 47-7C-3(C).

Operational impact
What this means, by role
Property managers Annual and ratification meetings may now be noticed electronically and held virtually for condominium associations, provided the owner has consented to electronic notice in advance.
HOA board members Boards may count remotely participating members toward a quorum and conduct association business electronically — but bylaws should be updated to reflect the new options.
Community association attorneys The amendments affect meeting and notice mechanics in §§ 47-7C-8 and 47-7C-9, not the negative-option budget process in § 47-7C-3(C), which is unchanged.
Homeowners Owners may attend and vote at condominium meetings remotely, but the default rule that a budget ratifies unless a majority rejects it is unchanged.
Status Indefinitely postponed
⌖ Last verified June 16, 2026
Docket

HB 232 · 2025 Regular Session

Effective
N/A
Sunset
N/A
Prohibit Certain Homeowner Association Fees
Synopsis

Sponsored by Reps. Tara L. Lujan, Angelica Rubio, Cristina Parajón, Janelle Anyanonu, and Joanne Ferrary, this bill would have prohibited transfer fees on the sale of a lot or unit. It was postponed indefinitely in committee and did not become law.29

Operational impact
What this means, by role
Property managers Track whether any transfer fee provisions exist in your association’s governing documents — if this proposal returns, those fees would be barred at closing.
HOA board members Review whether your association currently charges transfer fees; future legislation would require eliminating them from your fee schedule.
Community association attorneys Monitor how re-introduction could affect your client associations’ revenue structures tied to property transfers.
Homeowners This bill would have eliminated a closing fee many sellers encounter — it did not pass, but the legislative push is likely to continue.
Status Died in committee
⌖ Last verified June 16, 2026
Docket

HB 440 · 2025 Regular Session

Effective
N/A
Sunset
N/A
Relating to HOA assessment lien foreclosure restrictions
Synopsis

Introduced February 22, 2025 by Reps. Tara L. Lujan and Antonio “Moe” Maestas, this bill would have barred an association from foreclosing on a lien that is less than twelve months delinquent, amounts to less than $5,000, or is based solely on fines. It died in committee.30

Operational impact
What this means, by role
Property managers Current law allows foreclosure on short-term delinquencies; a future version of this bill would restrict those collection tools for small or fine-based liens.
HOA board members Your enforcement options for small or fine-only balances remain intact today, but legislative pressure to limit foreclosure on those liens is real and ongoing.
Community association attorneys Counsel boards that assessment-lien foreclosure strategy may face new statutory minimums on delinquency age and amount in future sessions.
Homeowners This bill would have protected you from foreclosure on short-term delinquencies and fine-based balances — the push for that protection continues.
Status Died in Senate
⌖ Last verified June 16, 2026
Docket

SB 239 · 2025 Regular Session

Effective
N/A
Sunset
N/A
Homeowner Association Lot Owner Remedy
Synopsis

This bill would have added a subsection to N.M. Stat. Ann. § 47-16-18 allowing a lot owner to file a complaint against another owner or the board with the state Department of Justice, and authorizing the Attorney General to bring a civil action to enforce association bylaws or rules. It died in the Senate and did not enact a new budget, reserve, or assessment-approval mechanism, or import a negative-option ratification step or assessment cap into the Homeowner Association Act.31

Operational impact
What this means, by role
Property managers A state-level complaint mechanism would add a new enforcement layer — a future version could require tracking and responding to Attorney General complaints about board conduct.
HOA board members The bill would have let the AG bring civil actions to enforce association bylaws, creating a direct accountability channel outside the courts.
Community association attorneys New enforcement authority in the Attorney General’s office would add a litigation channel for clients on both sides of disputes over board compliance.
Homeowners This would have given you a direct line to state enforcement if the board failed to follow its own rules — the push for that remedy is likely to return.

Recent appellate rulings

No New Mexico Court of Appeals or New Mexico Supreme Court decision issued in the past 36 months interprets the budget or assessment provisions of either the Condominium Act or the Homeowner Association Act. The official statutory annotations to the core financial sections — §§ 47-7C-3, 47-7C-15, 47-7C-16, and 47-16-7 — cite no New Mexico appellate decisions construing those subsections. The only recent administrative interpretations of the Homeowner Association Act are New Mexico Attorney General advisory opinions on declarant control of boards — not budgets or assessments.32

Active legislative debates

The 2025 session saw proposals targeting remote meetings, transfer fees, assessment-lien foreclosure, and lot-owner enforcement rights. None enacted a new budget, reserve, or assessment-approval mechanism, and none imported a negative-option ratification step or assessment cap into the Homeowner Association Act. The most structurally significant proposal — Senate Bill 239 — died in the Senate; it is covered in the bills section above.

Section 5 — National positioning and related coverage

For condominiums, New Mexico is a 1980-Uniform-Condominium-Act state: its Condominium Act tracks the uniform model’s negative-option budget ratification, in which the board adopts the budget and it takes effect unless a majority of owners reject it. That places New Mexico apart from states that adopted the broader Uniform Common Interest Ownership Act (UCIOA), from the 2008-UCIOA states that layered in reserve-study and reserve-funding requirements, and from California’s Davis-Stirling model with its caps on assessment increases absent an owner vote. New Mexico’s planned communities, by contrast, fall under a limited 2013 statute that leaves budget adoption to the recorded declaration and requires only annual adoption, distribution, and periodic financial review. For a multi-state operator, the practical implication is direct: New Mexico condominiums run on the negative-option mechanism, while New Mexico planned communities are declaration-driven subject to a thin disclosure statute, so a single internal budget-approval template will not work across both portfolios.

  1. N.M. Stat. Ann. § 47-7C-3(C) (Executive board members and officers; negative-option budget ratification), Condominium Act (N.M. Laws 1982, ch. 27) ↩
  2. N.M. Stat. Ann. § 47-16-7(E) (Board members and officers; duties; budget), Homeowner Association Act (NMSA 1978) ↩
  3. N.M. Stat. Ann. § 47-7-1 (Short title), Building Unit Ownership Act (NMSA 1978) ↩
  4. N.M. Stat. Ann. § 47-7A-1 (Short title); compiler’s note: N.M. Laws 1982, ch. 27 enacted New Mexico’s version of the Uniform Condominium Act as amended in 1980, effective May 19, 1982 ↩
  5. N.M. Stat. Ann. §§ 47-7A-1 to 47-7D-20 (Condominium Act); budget-ratification mechanic at § 47-7C-3(C) (NMSA 1978) ↩
  6. N.M. Stat. Ann. §§ 47-16-1 to 47-16-18 (Homeowner Association Act); budget duty at § 47-16-7(E) (NMSA 1978) ↩
  7. N.M. Stat. Ann. § 47-7A-1; compiler’s note confirms effective date of N.M. Laws 1982, ch. 27 as May 19, 1982 ↩
  8. N.M. Stat. Ann. §§ 47-16-1 to 47-16-18 (Homeowner Association Act), scope of coverage ↩
  9. N.M. Stat. Ann. § 47-7C-15 (Assessments for common expenses), Condominium Act (NMSA 1978) ↩
  10. N.M. Stat. Ann. § 47-7A-3(E) (Definitions; “common expenses” includes allocations to reserves), Condominium Act (NMSA 1978) ↩
  11. N.M. Stat. Ann. § 47-16-10 (Financial audit), Homeowner Association Act (NMSA 1978); 2019 amendment changed the requirement to at least every three years ↩
  12. N.M. Stat. Ann. § 47-7C-2(A)(2) (Powers of unit owners’ association; adopt and amend budgets), Condominium Act (NMSA 1978) ↩
  13. N.M. Stat. Ann. § 47-7C-3(C) (30-day distribution and 14–30-day meeting notice requirements), Condominium Act (NMSA 1978) ↩
  14. N.M. Stat. Ann. § 47-7C-3(C) (quorum-independent ratification; majority-rejection threshold), Condominium Act (NMSA 1978) ↩
  15. N.M. Stat. Ann. § 47-7C-3(C) (last-ratified budget continues upon owner rejection), Condominium Act (NMSA 1978) ↩
  16. N.M. Stat. Ann. § 47-7C-15 (Assessments for common expenses; allocation per declaration), Condominium Act (NMSA 1978) ↩
  17. N.M. Stat. Ann. § 47-7C-16 (Lien for assessments), Condominium Act (NMSA 1978) ↩
  18. N.M. Stat. Ann. § 47-16-7(E) (annual budget adoption and distribution) and § 47-16-7(F) (fee and fine statement with annual budget), Homeowner Association Act (NMSA 1978) ↩
  19. N.M. Stat. Ann. §§ 47-7-1 to 47-7-28 (Building Unit Ownership Act, NMSA 1978) ↩
  20. N.M. Stat. Ann. § 47-7A-2 (Applicability; pre-Act condominiums; opt-in by recorded resolution), Condominium Act (NMSA 1978) ↩
  21. N.M. Stat. Ann. §§ 47-7-1 to 47-7-28, including § 47-7-21 (books of receipts and expenditures; availability for examination), Building Unit Ownership Act (NMSA 1978) ↩
  22. N.M. Stat. Ann. §§ 53-8-1 to 53-8-99 (Nonprofit Corporation Act), including § 53-8-17 (Board of directors) ↩
  23. N.M. Stat. Ann. § 47-7A-3(E) (Definitions; “common expenses” includes allocations to reserves; no reserve-study or reserve-funding mandate), Condominium Act (NMSA 1978) ↩
  24. N.M. Stat. Ann. § 47-7C-15 (Assessments for common expenses; no separate special-assessment threshold), Condominium Act (NMSA 1978) ↩
  25. N.M. Stat. Ann. § 47-16-10 (Financial audit, review, or compilation at least every three years by independent CPA), Homeowner Association Act (NMSA 1978) ↩
  26. N.M. Stat. Ann. § 47-16-5 (Record disclosure to members; 10-business-day response; statutory penalty), Homeowner Association Act (NMSA 1978) ↩
  27. N.M. Leg., Fiscal Impact Report, S.B. 72, 2025 Reg. Sess. (Nonprofit Condo & Homeowner Association Remote Business; amending N.M. Stat. Ann. §§ 47-7C-8, 47-7C-9, 53-8-15, 53-8-16, 53-8-22; effective June 20, 2025) ↩
  28. LegiScan, N.M. S.B. 72, 2025 Reg. Sess. (Senate final passage 37–0, Feb. 19, 2025; House final passage 66–0, Mar. 18, 2025; signed by Governor as ch. 62, Apr. 7, 2025) ↩
  29. Cmty. Ass’ns Inst., 2025 CAI New Mexico Legislative Session Report (H.B. 232, prohibit certain HOA fees, sponsored by Reps. Lujan et al.; postponed indefinitely in committee) ↩
  30. Cmty. Ass’ns Inst., 2025 CAI New Mexico Legislative Session Report (H.B. 440, HOA lien foreclosure restrictions, sponsored by Reps. Lujan and Maestas, introduced Feb. 22, 2025; died in committee) ↩
  31. Cmty. Ass’ns Inst., 2025 CAI New Mexico Legislative Session Report (S.B. 239, Homeowner Association Lot Owner Remedy; would have amended N.M. Stat. Ann. § 47-16-18; died in Senate) ↩
  32. N.M. Stat. Ann. § 47-16 annotations (no appellate decisions construing budget or assessment subsections); N.M. Att’y Gen. Adv. Ltr. 2021-05 (declarant board control, Picacho Mountain; not a budget or assessment ruling) ↩
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