New Mexico

For New Mexico, payment bond threshold is For contracts greater than $25,000; bond amount is not less than one hundred percent (100%) of the contract price; claim deadline is No suit on the construction payment bond may be commenced after the expiration of one year from the date of final “settlement” of the contract as defined by statute; preliminary notice required is must serve written notice to the principal contractor within ninety (90) days from the date on which such person performed the last of the labor or furnished or supplied the last of the material; statutory citation is New Mexico Statutes Annotated, Chapter 13, Section 4, §§ 13-4-1 to 13-4-24; Chapter 48, Section 2A, §§ 48-2A-1 to 48-2A-12, verified against its source on 2026-08-17.

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What the source says

NEW MEXICO Amount of Bond: For contracts greater than $25,000 (NMSA § 13-4-18.A), the prime contractor shall deliver to the state agency or local public body administering the contract for the public works, and with the prime contractor as bond principal, a payment bond for the protection of all persons supplying labor and/or material to the contractor or its subcontractors for performance of the work provided for in the prime contract (NMSA § 13-4-18.A(2)). For contracts of $25,000 or less, the public body, in its sole discretion, may nevertheless require the prime contractor to supply a payment bond in compliance with NMSA § 13-4-18.E. The size of the construction payment bond must be not less than one hundred percent (100%) of the contract price. NMSA § 13-4-18.A(2). The state purchasing agent or central purchasing office, in their discretion, may reduce this amount to not less than fifty percent (50%) of the contract price, as long as the state agency or local public body self-insures the percentage that is reduced from the contractually required payment amount. NMSA § 13-4-18.B-C. Labor and Material Covered By the Bond: All just claims for labor performed, for materials and supplies furnished, for the work of construction, alteration, improvement or repair of any public buildings, structure or highway or for any public work for which full payment has not been made within ninety (90) days following the last supply of labor, materials or equipment for which the claim is made (NMSA § 13-4-19.B; see generally , NMSA § 13-4-1), that is furnished under the original contract or under any subcontract executed pursuant to the original contract (NMSA § 13-4-18.A(2)). Notice Required: Any person having a direct contractual relationship with a subcontractor but no contractual relationship, either express or implied, with the principal contractor, must serve written notice to the principal contractor within ninety (90) days from the date on which such person performed the last of the labor or furnished or supplied the last of the material for which the claim is made. NMSA § 13-4-19.B. That person must state with substantial accuracy the amount claimed and the name of the party to whom the material was furnished or supplied or for whom the labor was done or performed. Id. Such “notice shall be served by mailing the same by registered mail, postage prepaid, in an envelope addressed to the contractor at any place he maintains an office or conducts his business, or his residence, or in any manner in which the service of summons in civil process is authorized by law.” NMSA § 13-4-19.B. Time and Contents of Suit: No suit on the construction payment bond may be commenced after the expiration of one year from the date of final “settlement” of the contract as defined by statute. NMSA § 13-4-19.D. Claimant in such suit shall notify the obligee named in the payment bond at the beginning of the action and shall state the amount claimed and that no judgment shall be entered in such action within 30 days after giving such notice. NMSA § 13-4-19.C. “If the amount realized on the bond is insufficient to discharge all claims in full, the amount shall be distributed among the parties entitled thereto pro rata .” Id . The suit shall be filed in the name of the state of New Mexico for the use of the person asserting the bond claim in court. NMSA § 13-4-19.D. Penalty for Failure to Take Bond: “If a contractor fails to deliver the required performance and payment bonds, the contractor’s bid shall be rejected, [and] its bid security shall be enforced to the extent of actual damages.” NMSA § 13-4-18.A. STOP NOTICES For What Projects: Residential properties of four or less units only. NMSA § 48-2A-2 (“Stop Notice Act”). The statute explains the purpose of the Act: The legislature finds there are practices within the industry of constructing residential properties containing not more than four dwelling units resulting in certain financial inequities and, therefore, declares that the purpose of the Stop Notice Act is to: provide for timely payment by an original contractor to persons contracted with to furnish labor or materials incorporated or to be incorporated in residential construction; define stop notices and their legal usage; encourage construction lenders to assert reasonable supervision, monitoring and control of funds disbursed to the original contractor for the timely payment of labor or materials; restrain and bar diversion of funds for purposes not directly involved with construction of the residential site improvement; and provide for criminal penalties. Whom Do You Serve: To exercise stop notice rights, a stop notice claimant must serve a preliminary notice of right to lien upon the owner and construction lender within twenty (20) days after first furnishing materials or labor to the project. NMSA § 48-2A-5(B). Service can be accomplished by personal service (“hand delivery”) or by mail, with a return receipt requested. NMSA § 48-2A-5(B), incorporating § 48-2A-6(1) and (2). Late notice may be served, but the stop-notice claimant will lose rights for materials and labor furnished more than 20 days prior to the service of notice. NMSA § 48-2A-5(C). The Stop Notice must be delivered and thereby served no earlier than twenty (20) days or later than thirty (30) days from the date the subcontractor or materialman presented to the original (prime) contractor his “request for payment.” NMSA § 48-2A-5(D). The “request for payment” is not defined by NMSA § 48-2A-3 (“Definitions”), but it is distinct from the preliminary notice by virtue of the fact that “request for payment” appears at NMSA § 48-2A-5.A(3), while “preliminary notice” appears at NMSA § 48-2A-5.A(2). Additionally, it is important to note that, even where a materials supply is not in direct contract with the prime contractor, even the materials supplier must serve a “request for payment” upon the prime. Important practice tip : It is important to note that NMSA § 48-2A-5(D) uses the language “original contractor” ( Note well : In Subsection D, “contractor” is singular ) for service of a request for payment. If the project has had a succession of prime contractors, then the best practice is to serve the request for payment upon both the original and the successor prime contractors. Indeed, NMSA § 48-2A-5.A(3) uses the plural “original contractors” to suggest exactly that both the original and successor contractors must be served with a request for payment. Indeed, NMSA § defines “original contractor” as “any contractor who has an express contractual relationship with the owner or in the case when the owner is the contractor, the owner.” Consult with a New Mexico-licensed attorney to determine the exact contents, time for filing, parties to be served and form of service requirements for the “request for payment.” Practice tip : Despite the supportive language on the legislative prologue, the New Mexico Stop Notice Act presents more compliance challenges for a claimant than either Arizona or California and is clearly intended by its onerous requirements and penalties to discourage the use of a Stop Notice. A stop notice claimant must be careful to obtain and serve a copy of a surety bond with the notice, infra , and thread the needle on the ten-day window for service following the undefined service upon the prime contractor of a “Request for Payment.” Finally, the misdemeanor criminal penalty that attaches to any failure to “deliver” a “claim satisfied” notice to all parties who received the bonded stop notice following satisfaction of the debt, suggests that the legislature is disingenuous in its encouraging prologue for the Stop Notice Act, and that the use of a Stop Notice is not even worth the effort and risks involved. The costs and nuisance of obtaining a 125% surety bond, or the cash collateral alternative provided by NMSA § 48-2A-7.B (“Stop notices; bonds”), and the potential criminal penalties have likely served an obviously intended legislative purpose of discouraging many otherwise viable stop notice claimants from pursuing their statutory rights. Contents: A stop notice will not be effective unless it is signed under oath by the claimant or the claimant’s agent, accompanied by a bond equal to one hundred and twenty-five (125%) percent of the claim stated in the stop notice (pursuant to NMSA § 48-2A-7.A-B), states the name of the claimant, the date of filing the preliminary notice, the date the claimant served his request for payment on the original contractors, a description of the labor or materials furnished or agreed to be furnished, the name of the party who ordered the labor or accepted the materials, the total costs of the labor or materials furnished to the project to date, the balance of the money due, and a demand on the construction lender, if any, or the owner if there is no construction lender, to withhold a sufficient amount of money from the loan funds to satisfy the stop notice demand amount. NMSA § 48-2A-5.A(1)-(10). When Must You File Suit on a Stop Notice: A stop notice claimant cannot file suit prior to thirty (30) days, or later than sixty (60) days, from the date of service of the stop notice, and must mail written notice of suit to the recipient within five (5) days of the date of filing suit. NMSA §48-2A-9(A). IMPORTANT NOTICE OF MISDEMEANOR LIABILITY: The stop notice claimant must also deliver a “claim satisfied” notice to all persons who received a bonded stop notice within ten (10) days from date of satisfaction of the debt forming the basis of the stop notice, or else be guilty of a criminal misdemeanor under New Mexico Statutes Annotated § 31-19-1. (Authority: NMSA § 48-2A-10.D). Importantly, note that “[a] claim satisfied notice shall not be effective unless it contains at least the same information as required in the stop notice including a statement signed by the claimant stating that the claim has been satisfied and the claimant agrees to discharge the stop notice.” NMSA §48-2A-10(C). Practice tip : The assessment of criminal penalties under NMSA § 48-2A-10(C) and (D) should arguably be found constitutionally void for vagueness, but in the interim, a petitioner might have to have been found guilty in order to have standing to challenge the statute. The author strongly recommends that a stop notice be attempted only with the most experienced and skilled New Mexico construction law attorney. Claimant shall not file a lien for payment while the stop notice is being litigated pursuant to a stop notice foreclosure lawsuit in court. NMSA § 48-2A-9.B. Practice tip : The prohibition against filing a mechanic’s or materialmen’s lien demonstrates the disarray and confusion of New Mexico’s lien and stop notice statutory regime. Stop notices are available only upon residential properties of four or fewer units (NMSA § 48-2A-2), while mechanic’s and materialmen’s liens are available only on properties of more than four units (NMSA §§ 48-2-2.1.A). Statutory Citation: New Mexico Statutes Annotated, Chapter 13, Section 4, §§ 13-4-1 to 13-4-24; Chapter 48, Section 2A, §§ 48-2A-1 to 48-2A-12.

— fullertonlaw.com, retrieved 2026-08-17

Source

• fullertonlaw.comhttps://fullertonlaw.com/50-state-summary-payment-bond-law

Last verified against source: 2026-08-17. Due for re-check by 2027-08-17. This page as Markdown · OKF bundle · full dataset as JSON.