As we all know, a security deposit is the money given to a landlord when a tenant moves into a rented unit. The tenant gets this money back when the resident moves out, unless the landlord has a good reason to keep the money.
For example, if you haven’t paid your rent in full, the landlord can keep the deposit to cover that loss.
As a renter, there is so much about security deposits, especially if you are from Michigan, that you need to know.
Here, we explore Michigan law, regarding security deposits, and everything you need to know.
Let’s see what you need to know about Michigan Landlord-Tenant Deposit Act:
Fee or deposit?
Any amount you give to your landlord that is refundable is a security deposit, no matter what your landlord calls it. If the money is not refundable, it is a charge.
You should read your lease to determine whether the money you paid will be returned to you after the lease expires or not.
Consider a case where you pay an upfront charge for your dog. If the owner agrees to return your money if the dog does no damage, the money falls under the security deposit category. The money will be a royalty if the owner keeps the money, regardless of your dog’s behavior.
Under Michigan security law, your deposit cannot exceed one and a half times your rent.
The deposit applies to your home
Michigan law on security deposits involves agreements for rental units. A rental unit is any physical structure used, by a family or a single person, as a home. It can be a mobile home space, rooming house, pension or apartment.
The law applies if you rent an apartment or a house. You must sign a rental / lease agreement after paying your deposit to a landlord.
A lease is an agreement that changes or creates the terms, conditions or provisions regarding the occupation and use of rental accommodation.
Before signing the lease
As we have seen, Michigan law requires a landlord-tenant agreement by signing a lease. However, before signing the lease, make sure you know the amount of the security deposit.
If you need to pay a security deposit, the landlord must send you a written notice within 14 days of moving into the apartment or before the lease begins, which says:
“You must notify your landlord in writing within four (4) days of your move of a forwarding address where you can be reached and where you will receive mail; otherwise, your landlord will be exempt from sending you a detailed list of damages and penalties pertaining to this breach.
This notice must also indicate the name and address of the place where you can send communications. The notice is part of the lease and must also inform you of the place of deposit of your deposit.
Your move-in checklist
A move-in checklist is a very important part of the security deposit process. Michigan homeowners must provide two move-in checklists or copies of an inventory sheet.
The first page must indicate in bold 12 points:
“You must complete this checklist noting the condition of the rental property and return it to the landlord within 7 days of taking possession of the rental unit. You also have the right to request and receive a copy of the Last Termination Inventory Checklist, which indicates which complaints were attributable to the last previous tenants.
If your landlord forgets to give you a checklist, you should ask for one. However, if the landlord refuses to give you a checklist, do a self-inspection of your home and note any problems.
After the inspection, give your landlord a checklist and keep one for yourself. Remember to film any damage you identify and never sign a move-in checklist if you don’t agree.
Your moving checklist
When you decide to leave your home or apartment, use the checklist to assess and record the current condition. Again, keep a copy for yourself and give one to the owner.
Collect the tenant’s security deposit
Your landlord must return the tenant’s security deposit unless there is a good reason to keep it.
Some of these reasons include:
- If you don’t pay all your rent
- You have not paid for your utilities and want to move out of rental accommodation
- You left the rental unit in a state it is beyond normal wear and tear
The process of recovering your security deposit begins after you leave the rental unit.
The steps in this process include:
Give the owner your forwarding address in writing
Within four days of leaving your old rental unit, you must communicate your new forwarding address to your former landlord. Under Michigan law, your landlord has 30 days to either return the security deposit or send you a damage list.
The list of damages
The damage list the owner sends you should be itemized and should include estimated repair costs, or copies of receipts, for each damaged item.
You must respond to the damages list by mail within seven days. If you don’t, you will lose the amount claimed.
Objection to the list of damages
If you do not agree with the itemized damage list you receive, you will have at least seven days to respond to this damage notice. If you do not, you will have accepted the notice of damages under Michigan law.
If you do not‘t agree with the detailed list of damages or costs, the owner has 45–days to file a complaint. The judge will then decide how much is owed to you.
Normal wear and tear
Damage that may be deducted from your security deposit relates to damage to an apartment or house that is deemed to be beyond normal wear and tear.
For example, carpets, flooring, appliances and furniture can wear out or tear from the simple act of being used. Dirt is also another form of wear and tear that your landlord should not charge you on the deposit, unless of course it’s excessive.
Some of the damage you might be forced to pay includes a burn mark on your counter, a broken window, or damage from an unreported leak.
30 days and then …
If you provide your landlord with your new forwarding address, but do not receive a damage list or deposit within 30 days of your move, the landlord is not entitled to claim damages on your deposit.
You might have unpaid rent, but the landlord can’t get that money out of your security deposit.
45 days or double
As mentioned above, your former landlord will have 45 days to seek damages in court. If all of the following happen, you can sue the landlord for double your security deposit amount:
- Your landlord refuses to return your security deposit or take legal action within 45 days
- You provided your forwarding address at least four days before moving
- You responded to the notice of damages within 7 days after receiving it
Owing more than security deposits
There may be times when you owe your landlord more money than your security deposit. For example, your security deposit could be $ 600, while you owe the landlord damages of $ 900.
here, the owner could keep the $ 600 and charge the remaining $ 300.
Go to court to get your security deposit
You can sue your landlord if they don’t return your security deposit. If the owner owes you less than $ 6,000, you can sue in small claims court.
You should take your case to district court if your landlord owes you more than $ 6,000. However, talk to a lawyer before suing your landlord.
What to expect in court
If your case goes to court, each party will have the opportunity to tell their story. The caller has the option to speak first. They will also have to produce evidence in court and call their witnesses.
The defendant will also have an equal chance to present evidence and call witnesses. After listening to both parties, the jury or judge will decide the amount owed.
Does Michigan law require a homeowner to have security deposits held in a separate account?
Yes. The landlord must have the tenant’s security deposit at a regulated financial institution. The money can only be used if the owner posts a bond or cash bond with the Secretary of State.
Michigan is a state with some of the best real estate laws in the country. As we saw above, if you are renting a home in Michigan, you need to make sure you sign a landlord-tenant lease agreement.
A rental agreement will guarantee the security of your deposit should you wish to move. If a misunderstanding arises with your landlord, you can file a complaint in court for a solution.
Understanding Michigan Security Deposit Law is essential for leading a peaceful life and finding the best apartment.