Michigan's Law on Lease Agreements
Michigan law includes specific rules on what can and cannot be included in a lease agreement. It also strictly controls the process by which the landlord can collect a security deposit and the process for either returning the deposit at the end of the tenancy or making deductions for damages or outstanding rent.
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Legislation
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Leases in Michigan are primarily governed by a state law, formally known as Act 348 of 1972, and popularly known as the Landlord-Tenant Act. Lease agreements are also covered by Act 454 of 1978, the Truth In Renting Act.
Security Deposits
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The maximum allowable security deposit is the equivalent of 1-1/2 month's rent. The landlord must formally request this deposit in writing within 14 days of the tenant taking possession of the property, otherwise no deposit is required. All deposits must be deposited in a regulated financial institutions, though the landlord is allowed to access and use the money during the tenancy period if he deposits a cash bond or surety bond with the secretary of state. The security deposit is considered the legal property of the tenant unless and until the landlord establishes a legal right to the money.
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Deductions
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The only deductions allowable from a security deposit are for damages to the rental unit that are specifically the result of behavior beyond that expected of a tenant along with for payment of rent arrears, penalty fees (as stated in the lease agreement) for ending the lease early or utility bills left unpaid by the tenant. The landlord must supply the tenant with an itemized list of damages at the end of the tenancy and give the tenant seven days to dispute the damages. Along with the list, the landlord must include payment for the amount of deposit that is not in dispute.
If the tenant disputes a deduction, the landlord has 45 days to either pay the disputed amount or take the matter to court.
Lease Terms
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A wide range of terms cannot be included in a Michigan lease. These generally ban lease terms from overriding legal rights or responsibilities. A lease cannot allow for the landlord to make changes to the lease conditions without the written consent of the tenant, except where to do so is a legal requirement or is necessary to protect health and safety. A landlord cannot unilaterally change the rent amount during the rental period except in line with specific costs such as property taxes, utility charges or insurance premiums.
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