If you own a rental property in Michigan, you don’t want to run afoul of the Michigan’s landlord-tenant laws. Whether you have one single-family property, multiple properties or a multi-unit apartment building, make sure you know the basics on rent laws, eviction rules, license requirements and other landlord-tenant laws in Michigan.
Rent and Payment Laws
Normally, landlords can’t alter the lease or increase rent during the tenancy term. However, under Michigan rules, landlords can make changes to the amount of rental payments to cover costs associated with an increase in property taxes, utilities or property insurance premiums if a 30-day written notice is provided and there’s a clause in the lease allowing for such adjustments. Rent may also increase after a fixed-term lease ends and the tenancy converts to a month-to-month lease, per the terms of the rental agreement.
Security Deposit Requirements
In Michigan, refundable fees are considered security deposits. Fees that cannot be refunded are not generally considered security deposits. When the last month’s rent is required upfront, it is considered a security deposit. Sometimes, landlords list different types of security deposits separately, but the total security deposit cannot be more than 1.5 times the monthly rent. For example, if the monthly rent is $1,000, the total security deposit cannot be more than $1,500.
At the termination of the lease, the landlord must refund the security deposit unless one of the following claims can be substantiated:
- The tenant owes unpaid rent.
- The tenant owes unpaid utility bills.
- The tenant caused damage beyond reasonable wear and tear.
After the tenancy ends, assuming the tenant provides a forwarding address within four days, the landlord has 30 days to either return the entire security deposit or send an itemized list of damages and the remaining balance if any. The tenant can dispute the damages with seven days of receipt of the letter.
The Michigan Department of the Attorney General says that landlords are required to deposit all security deposits collected from tenants into an account with a regulated financial institution, such as a bank or credit union. The funds can be kept in the account and used only for purposes allowed until the Landlord Tenant Relations Act. If the landlord wants to use the money for other purposes, the landlord must either secure a Landlord Tenant Security Bond or comply with the Security Deposits Annual Certification requirements.
A fixed-term lease may end at the end of the term, or it may transition to a month-to-month tenancy, depending on the rental agreement. In month-to-month tenancies or other types of periodic or at will tenancy, termination of the lease requires notice and is governed under state statutes.
If the landlord wants to remove a tenant from the property, an eviction process called a Summary Proceeding must be followed.
First, provide an eviction notice. This notice must include certain information, including the reason for eviction and when the landlord plans to evict the tenant. The notice may give the tenant a certain amount of time to fix the issue to avoid eviction.
File a lawsuit with the court to proceed with eviction. A certain amount of time must pass between the notice and the lawsuit. The length depends on the reason for eviction and can be 24 hours, seven days or 30 days.
Landlords are not allowed to remove a tenant or the tenant’s personal property. Only a court officer may do this and only with a court order. Furthermore, the landlord cannot change the locks, turn off the utilities or otherwise try to force the tenant to leave.
Written Rental Agreements
In Michigan, the rental agreement can be written or oral when the lease term is for less than a year. However, a written lease is considered better in that it provides the best protection for both the tenant and the landlord. For lease agreements lasting for a year or longer, a written lease is required.
Most leases are subject to the requirements of the Michigan Truth in Renting Act. These rules require the landlord to make certain disclosures. Written leases must include the landlord’s mailing addresses. If there is a security deposit, the lease must include the amount, the name and address of the financial institution where it will be help and a notice of the tenant’s obligation to provide a forwarding address within four days of terminating the tenancy. The lease must also include the following phrase in a prominent place and in a 12-point font or larger:
“NOTICE: Michigan law establishes rights and obligations for parties to rental agreements. This agreement is required to comply with the Truth in Renting Act. If you have a question about the interpretation or legality of a provision of this agreement, you may want to seek assistance from a lawyer or other qualified person.”
In Michigan, landlords are allowed to prohibit all pets. Alternatively, landlords may charge a fee for having a pet. However, service animals and companion animals are not considered pets, and landlords are not allowed to prohibit housing for service animals that disabled individuals rely on.
Getting a License as a Landlord
In Michigan, no license is required for owners of rental properties or for the employees who rent or lease properties on the owner’s behalf. However, third-party property managers who rent or lease property for a fee must be licensed as a real estate salesperson or broker.
Various counties and cities within Michigan may have additional licensing requirements. For example, in Detroit, landlords must obtain a rental certificate of compliance.
When a tenant takes possession of the rental property in Michigan, two copies of an inventory checklist must be provided. Also called an itemized list of damages, this checklist provides proof of the condition of the property when the tenancy begins, and this can be important if there are disputes about damage and security deposits when the tenancy ends.
The two copies must be identical, and the tenant should be instructed to complete the checklist and return it to the landlord within seven days. The landlord and tenant may agree on a shorter period. The tenant may also request a copy of the previous tenant’s termination inventory checklist. In addition to the checklist, both the landlord and the tenant may want to take pictures or recordings to document the condition of the unit.
New and Changing Laws
In addition to the requirements listed here, you may need to follow additional laws. See the Practical Guide for Tenants & Landlords for more detailed information on Michigan rental property rules, as well as sample rental agreements and inventory checklists.
Landlords also need to keep up with new and changing laws at the federal, state and city level. New legislation may be passed at any time. This includes emergency rules, such as those put in place during the COVID-19 pandemic.
As you can see, landlords need to comply with strict laws and regulations. Tenants who feel that their rights have been violated may file lawsuits. Lawsuits can also stem from injuries that occur on the property.
Honeycomb offers landlord insurance to help rental property owners protect themselves from liability and property damage risks. Learn more.