Michigan

Security Deposit Amount

In Michigan, landlords may not charge a security deposit that exceeds one and a half (1.5x) times the monthly rent.

Options for Holding

Michigan landlords may legal hold security deposits in one of the following ways:

• Escrow Account: Security deposits must be held in a regulated financial institution (bank or savings and loan association) within the state of Michigan.
• Surety Bond: Instead of an escrow account, a landlord may post a surety bond with the county in which the property is located. The bond must be equivalent to the total amount of security deposits held.

Notification Requirements

Initial Notice: Within 14 days of receiving the security deposit, the landlord must provide the tenant with a notice containing the name and address of the financial institution or the surety bond provider holding the deposit.

Move-Out Checklist: When the tenant moves in, the landlord must provide a move-in checklist that details the condition of the property. The tenant has 7 days to review, amend, and return the checklist.

Payment of Interest Earned

Michigan law does not require landlords to pay interest on security deposits.

Timeline for Returning

Landlords must return the security deposit or provide an itemized list of damages within 30 days after the tenant vacates the property. If the tenant does not dispute the deductions within 7 days after receiving the itemized list, the landlord may retain the deducted amount.

Claims Process

If the landlord intends to deduct any amount from the security deposit, they must provide an itemized list of damages or unpaid rent. This list must include detailed descriptions and the exact amount being deducted and must be provided to the tenant within 30 days of vacating the property.

The tenant then has 7 days to dispute the deductions. If the deductions are not disputed, the landlord may deduct the amount and then must return the remainder to the tenant.

If the tenant disputes the deductions…

• Written Response: The tenant must submit a written response to the landlord, disputing the itemized deductions within 7 days after receiving the itemized list of damages and deductions.
• Details of Dispute: The written dispute should clearly outline which deductions the tenant disagrees with and why. The tenant may include evidence, such as photographs or receipts, to support their claim.
• Landlord-Tenant Discussion: After receiving the tenant's dispute, the landlord and tenant may try to negotiate and resolve the issue. This could involve adjusting the amount of the deductions or reaching an agreement on the disputed items.
• Amendments: If the landlord agrees with the tenant's dispute, they may amend the deductions and return the appropriate amount of the security deposit to the tenant.
• Small Claims Court: If the dispute cannot be resolved through negotiation, the tenant may file a lawsuit in small claims court to recover the disputed portion of the security deposit. The tenant can sue for the return of the entire deposit or the amount wrongfully withheld.

Michigan landlords may legally deduct costs from a tenant's security deposits for:

• Unpaid Rent: Landlords can deduct for any unpaid rent or fees due under the lease agreement.
• Damages: Deductions can be made for any damages beyond normal wear and tear. This includes damage to the property, fixtures, or appliances.
• Cleaning Costs: If the property is not returned in a clean condition, reasonable cleaning costs may be deducted.
• Other Costs: Any other amounts specified in the lease agreement, such as repairs or replacements, can also be deducted.

Double Damages: If a landlord wrongfully withholds any portion of the security deposit or fails to provide the required itemized list within 30 days, the tenant may sue for the return of the deposit. If the court finds that the landlord acted in bad faith, the tenant may be awarded double the amount wrongfully withheld, plus court costs and attorney fees.

Legal Costs: The landlord may be required to pay the tenant's legal fees if the tenant prevails in a lawsuit regarding the security deposit.

Joint Tenants: If there are multiple tenants on the lease, the security deposit may be returned in one payment, jointly payable to all tenants, unless otherwise specified.

Eviction: If the tenant is evicted, the same rules regarding the return of the security deposit and the provision of an itemized list of damages apply.