The Top 10 Things Residential Landlords and Tenants Need to Know About Security Deposits in Michigan
Article by Lindsay Cummings
Almost all residential leases require some level of security deposit. It is typically a sum of money that is set aside and used to cover any damage to the property or an early termination of the lease by a tenant. Here are 10 aspects of Michigan law related to security deposits that you will want to keep in mind:
- Under Michigan law, a landlord may not charge more than one and a half months’ rent for a security deposit. MCL 554.602.
- A landlord is not required to provide receipt of the security deposit, but, within 14 days of move-in, must notify the tenant in writing of the name and address of the financial institution where the deposit is being held and the landlord’s name and mailing address. MCL 554.603.
- Once the security deposit is paid to the landlord, it must be deposited into a regulated financial institution, and interest accrued as a result from the security deposit does not need to be paid to the tenant at the end of the lease. MCL 554.604.
- A security deposit can be used for reimbursement to the landlord for actual damages that do not result from normal wear and tear, late rent owed, rent for early termination of the lease, and unpaid utilities bills by the tenant. MCL 554.607.
- When a lease ends, the landlord has 30 days after the move out date to return the security deposit to the tenant with an itemized statement of the deductions, including the estimated cost of repairing any items damaged. MCL 554.609.
- If a landlord fails to notify the tenant of claimed damages within the 30 days of move-out, then he or she is considered to have found no damages and must return the security deposit immediately. MCL 554.610.
- A landlord must notify a tenant that he or she is entitled to a copy of the previous tenant’s move-out checklist that includes claimed damages. MCL 554.608(4).
- A landlord may not withhold any part of the security deposit for previously disclosed damages on a tenant’s move-in or move-out checklist. MCL 554.609.
- A tenant must dispute the landlord’s deductions within seven days of receiving the itemized statement. If the tenant fails to do so, then the tenant forfeits that portion of the security deposit. MCL 554.612
- A tenant must provide a forwarding address to the landlord, in writing, within four days of moving out. If the tenant does not provide this information to the landlord within this time period, then the landlord is not required to provide notice of damages to the tenant. MCL 554.611.
These 10 things are a glimpse into the nuances of Michigan landlord tenant law, specifically relating to security deposits. Many other laws and requirements exist for both a landlord and tenant, which is why you should always have an experienced real estate attorney prepare or review a residential lease before signing it.
Posted on June 16, 2016
Tagged as Real Estate