N.M. Stat. Ann. § 48-3-6
Landlord's preference in bankruptcy or insolvency proceedings.
Operative Text
48-3-6. Landlord's preference in bankruptcy or insolvency proceedings.
In all cases where a tenant becomes insolvent and any assignment for the benefit of
creditors is executed, or a receiver is legally appointed, or bankruptcy or other
insolvency proceedings are instituted, either by or against the tenant, covering property
upon the demised premises which is liable to distress by the landlord for rent, the
landlord shall be first entitled to receive, out of the proceeds of the sale of the property
by the legal representative of the tenant, any sum due the landlord for rent of the
premises at the time of the institution of the receivership, bankruptcy or insolvency
proceedings, not exceeding six months' rent. If the proceeds of the sale by the legal
representative of the tenant are insufficient to pay the landlord and the costs of the
insolvency proceedings, the landlord shall be entitled to receive the proceeds of the sale
after deducting an amount equal to such costs as the landlord would be liable to pay in
case of a sale under distress. Nothing in this act [section] shall be construed to deprive
any person of preference for wages now provided by law in any insolvency or
receivership proceedings.
History: 1953 Comp., § 61-3-4.1, enacted by Laws 1969, ch. 83, § 1.Under NMSA 48-3-6, when a tenant becomes insolvent and formal proceedings such as bankruptcy, receivership, or a general assignment for the benefit of creditors are initiated, the landlord holds a preferred creditor status with respect to property on the rented premises. This preference allows the landlord to be paid first from the proceeds of any sale of that property by the tenant's legal representative, but only up to a maximum of six months' rent owed at the time the proceedings began. If sale proceeds are insufficient to cover both the landlord's claim and the costs of the insolvency proceedings, the landlord's share is reduced by the costs that would have applied in a distress sale. Importantly, this preference does not override any wage-preference rights that workers may hold under other laws.
Plain English — not legal advice.
NMSA 48-3-6 gives landlords a statutory priority claim in a tenant's insolvency or bankruptcy proceeding, capped at six months of unpaid rent accrued as of the date proceedings commenced. Operators who maintain accurate, up-to-date rent ledgers and documentation of the lease terms are generally better positioned to assert this preference claim through the appropriate legal representative or court. Because the preference applies only to property physically located on the demised premises and is subject to deductions for insolvency costs, keeping clear records of what property is on-site and what rent is outstanding supports a timely and well-documented claim.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
NMSA 48-3-6 establishes that a landlord holds a priority position among creditors when a tenant's insolvency or bankruptcy proceedings are underway, meaning rent owed at the time of filing—up to six months—may be paid to the landlord before other general creditors receive proceeds from a property sale. Tenants navigating insolvency should be aware that this preference is limited in scope and does not eliminate protections that workers have for unpaid wages under separate law. Tenants who believe a landlord is asserting a preference claim improperly may raise that issue through the bankruptcy or insolvency proceeding itself, or consult a tenant-rights organization for general guidance on how such claims are evaluated.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 26, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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