New Mexico Statutes Chapter 56. Commercial Instruments and Transactions § 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.

B. If an assignor collects rents that the assignee is entitled to collect pursuant to the Uniform Assignment of Rents Act:

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:

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 of the Uniform Assignment of Rents Act.

F. Unless otherwise agreed, if an assignee entitled to priority pursuant to Subsection C of Section 5 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 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.