In Michigan, a landlord can charge a tenant a maximum of one and a half month’s rent as a security deposit.
The landlord has the option of either placing a tenant’s security deposit in an account in a regulated bank or financial institution or post a cash or surety bond for the amount of the security deposit. It is important to note that the security deposit remains the tenant’s property, and is not to be used by the landlord during the tenancy unless the landlord has filed a surety bond.
A landlord may be able to keep all or a portion of a tenant’s security deposit because of unpaid rent, unpaid utility bills, damage to the rented premises in excess of normal wear and tear and breach of lease. However, when the tenant moves out of the rented premises the landlord must complete a termination inventory checklist and make note of any damage to the premises.
A landlord has thirty (30) days from when the tenant moves out to return the tenant’s security deposit to the forwarding address provided. If the landlord makes any deductions from the security deposit, the landlord must include an itemized list of such deductions along with the amount withheld or approximate cost to repair. The landlord must include a check or money order for the difference between the damages claimed and the amount of the security deposit held by the landlord.
The notice of damages must include the following statement “in 12 point boldface type which shall be at least 4 points larger than the body of the notice”:
You must respond to this notice by mail within 7 days after receipt of same, otherwise you will forfeit the amount claimed for damages.
If the tenant does not respond within seven (7) days, the tenant is deemed to have agreed with the landlord’s claim. However, the tenant forfeits only claims that are permitted pursuant to the Michigan statute.
If the landlord does not provide this notice within thirty (30) days, the landlord forfeits the right to keep any of the security deposit. However, the landlord is not precluded from suing the tenant for damages.
At Seglund Gabe Pawlak & Groth, PLC, our real estate attorneys are experienced in all aspects of the ownership and leasing of rental property, both residential and commercial. Contact us if you find yourself needed to consult with or retain an experienced real estate attorney.
Seglund Gabe Pawlak & Groth, PLC
28345 Beck Road, Suite 301
Wixom, Michigan 48393
Phone: (248) 869-0030
Fax: (248) 869-0039