New Mexico Statutes 24-17-6. Requirements for financial reserves
A. Any deposits or entrance fees paid by or for a resident shall be held in trust for the benefit of the resident in a federally insured New Mexico bank until the resident has occupied the resident’s unit or the resident’s contract cancellation period has ended, whichever occurs later.
Terms Used In New Mexico Statutes 24-17-6
- Contract: A legal written agreement that becomes binding when signed.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
B. In addition to the amounts held in trust for specific residents under Subsection A of this section, a community that provides a type A agreement shall maintain at all times liquid reserves equal to the principal and interest payments due for a twelve-month period on all accounts of any mortgage loan and other long-term debt, as well as three months’ worth of net operating expenses.
C. A community that provides a type A or type B agreement shall keep the funds maintained under Subsection A of this section in federally insured bank accounts that are separate from the community’s operating accounts.
D. For communities that provide type B agreements, reserves shall be calculated on a prorated basis for residents who fall under type B agreements.