New Mexico Statutes 56-15-14. Turnover of rents; commingling and identifiability of rents; liability of assignor
A. As used in this section, “good faith” means honesty in fact and the observance of reasonable commercial standards of fair dealing.
Terms Used In New Mexico Statutes 56-15-14
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
B. If an assignor collects rents that the assignee is entitled to collect pursuant to the Uniform Assignment of Rents Act:
(1) the assignor shall turn over the proceeds to the assignee, less any amount representing payment of expenses authorized by the assignee; and
(2) the assignee continues to have a security interest in the proceeds so long as they are identifiable.
C. For purposes of the Uniform Assignment of Rents Act, cash proceeds are identifiable if they are maintained in a segregated account or, if commingled with other funds, to the extent the assignee can identify them by a method of tracing, including application of equitable principles, that is permitted pursuant to any law of New Mexico other than the Uniform Assignment of Rents Act with respect to commingled funds.
D. In addition to any other remedy available to the assignee pursuant to any law of New Mexico other than the Uniform Assignment of Rents Act, if an assignor fails to turn over proceeds to the assignee as required by Subsection B of this section, the assignee may recover from the assignor in a civil action:
(1) the proceeds, or an amount equal to the proceeds, that the assignor was obligated to turn over pursuant to Subsection B of this section; and
(2) reasonable attorney fees and costs incurred by the assignee to the extent provided for by agreement and not prohibited by any law of New Mexico other than the Uniform Assignment of Rents Act.
E. The assignee may maintain an action pursuant to Subsection D of this section without bringing an action to foreclose any security interest that it may have in the real property. Any sums recovered in the action shall be applied in the manner specified in Section 12 [56-15-12 N.M. Stat. Ann.] of the Uniform Assignment of Rents Act.
F. Unless otherwise agreed, if an assignee entitled to priority pursuant to Subsection C of Section 5 [56-15-5 N.M. Stat. Ann.] of the Uniform Assignment of Rents Act enforces its interest in rents after another creditor holding a subordinate security interest in rents has enforced its interest pursuant to Section 8 or 9 [56-15-8, 56-15-9 N.M. Stat. Ann.] of that act, the creditor holding the subordinate security interest in rents is not obligated to turn over any proceeds that it collects in good faith before the creditor receives notification that the senior assignee has enforced its interest in rents. The creditor shall turn over to the senior assignee any proceeds that it collects after it receives the notification.