Thanks to their versatility, nitrogen-vacancy (NV) centers in nanodiamonds have been widely adopted as nanoscale sensors. However, their sensitivities are limited by their short coherence times relative to NVs in bulk diamond. A more complete understanding of the origins of decoherence in nanodiamonds is critical to improving their performance. Here we present measurements of fast spin relaxation on qutrit transitions between the energy eigenstates composed of the $m_s = \pm1$ states of the NV$^-$ electronic ground state in $\sim40$-nm nanodiamonds under ambient conditions. For frequency splittings between these states of $\sim20~$MHz or less the maximum theoretically achievable coherence time of the NV spin is $\sim2~$orders of magnitude shorter than would be expected if the NV spin is treated as a qubit. We attribute this fast relaxation to electric field noise. We observe a strong falloff of the qutrit relaxation rate with the splitting between the states, suggesting that, whenever possible, measurements with NVs in nanodiamonds should be performed at moderate axial magnetic fields ($>60$ G). We also observe that the qutrit relaxation rate changes with time. These findings indicate that surface electric field noise is a major source of decoherence for NVs in nanodiamonds.
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