Michigan Security Deposit Laws in 2024

What is a Security Deposit in Michigan?

A security deposit is a payment made by a tenant to a landlord at the start of a lease to provide financial protection in case the tenant damages the property or breaches the lease. The landlord can use the deposit funds to cover any repairs or unpaid rent when the tenant moves out.

In Michigan, landlords can charge a security deposit up to 1.5 times the monthly rent amount. For example, if the monthly rent is $1,000, the maximum security deposit would be $1,500. This applies to all rental housing types, including apartments, houses, duplexes, and mobile homes. Landlords cannot require security deposits exceeding 1.5x the rent, even if the tenant agrees to it.

The security deposit belongs to the tenant, but the landlord holds onto it for safekeeping during the lease term. The landlord must return the full deposit within 30 days after the tenant moves out, unless there are legitimate reasons for deductions like physical damages or unpaid rent. Security deposits for rentals in Michigan apply to both furnished and unfurnished units.

Reading the Lease Agreement

Before signing a lease, carefully review the security deposit terms and conditions. The lease should specify the amount of the deposit, when it is due, where it will be held, and the conditions for returning it. 

Get a copy of the fully signed lease agreement for your records. Having a copy protects you in case of any discrepancies or disputes. Review it periodically so you understand your rights and responsibilities.

Some key things to look for:

• Deposit Amount - Typically 1 month's rent, but can be up to 1.5x the monthly rent. Make sure it aligns with state law limits.
• Payment Schedule - Many leases now allow paying the deposit in installments. Know the due dates. 
• Interest - Find out if the deposit will accrue interest and how it will be paid out.
• Return Timeline - The law requires deposits be returned within 30 days. The lease should reflect this.
• Deductions - Review the reasons listed for potential deposit deductions. Make sure they comply with state law.
• Move-Out Notice - See if move-out notice is required to get the deposit back. This varies by state.
• Forwarding Address - Confirm the lease specifies how/when to provide your new address. 

Having a clear understanding of the security deposit rules in the lease protects your legal rights and can prevent issues down the road. Reach out to your landlord right away if you have any questions or concerns about the deposit terms in your lease.

Documenting the Move-In Condition

When you first move into a rental unit in Michigan, it is important to thoroughly document the existing condition of the property. This will protect you when it comes time to move out and retrieve your security deposit.

Complete a detailed move-in checklist, noting any damages, defects, or issues you find throughout the unit. Go room by room, opening cabinets, appliances, closets, etc. Check walls, floors, counters, fixtures, and furnishings. Note things like carpet stains, cracked tiles, chipped paint, appliance damage, etc.

Take date-stamped photos and videos showing any problems or flaws. Capture images of each room from multiple angles. Zoom in on any notable damages. This visual evidence will be useful later on.

Be sure to make a copy of the completed checklist and keep it along with the photos/videos you took. Send the original checklist to the landlord by certified mail. Ask for written acknowledgment of receiving it. 

Following this process protects you if the landlord later tries to deduct for pre-existing damages. With proper move-in documentation, you can dispute any unfair charges.

Documenting the Move-Out Condition

When your lease is ending and you are preparing to move out, it is crucial that you thoroughly document the condition of the rental unit. This will protect you from any unfair deductions from your security deposit.  

• Clean the entire unit thoroughly. Make sure to clean all appliances, cabinets, floors, walls, windows, bathrooms, etc. Refer to your move-in checklist if needed. Get rid of any dirt, stains, grime, and debris. You want to leave the unit in the same clean condition as when you moved in.
• Repair any damages beyond normal wear and tear. This includes large nail holes, damaged appliances, broken fixtures, etc. Consult your move-in checklist and photos to determine what repairs may be needed.
• Take date-stamped photos and videos of the entire unit after cleaning and repairs are complete. Capture all rooms from multiple angles. Zoom in on areas that show the unit's condition—this evidence will be useful if the landlord tries to make unfair deductions.
• Do a final walk-through with the landlord if possible. This is a chance to point out the unit's condition and resolve any potential disputes.

Thoroughly documenting the condition of the rental upon moving out is a tenant's best defense against deposit deductions. Following these tips will make it difficult for a landlord to justify taking money from your deposit.

Providing a Forwarding Address

When your lease ends and you are moving out, it is important to provide the landlord with your new forwarding address in writing. This way the landlord knows where to send your security deposit refund after you move out. 

Make sure to notify the landlord of your forwarding address in a way that provides proof of delivery. Sending a letter by certified mail with return receipt requested is recommended. You can also email the landlord, but be sure to request a delivery and read receipt. 

Keep copies of any written notice you send the landlord with your forwarding address. Also hold on to any postal receipts for mailing letters by certified mail, or print out emailed receipts showing your message was delivered and read. Having documentation that you properly notified the landlord of your address is crucial if you ever need to take legal action over a withheld security deposit.

With proof that you provided an address, the landlord has no excuse for failing to send your deposit or list of deductions within 30 days. If they do not mail it to the forwarding address you supplied, they could be liable for double damages if you take them to small claims court. So make sure to give proper notice in writing, and maintain records showing they received your new address.

Reviewing the Landlord's Damages List

Michigan law requires landlords to return tenants' security deposits within 30 days of the end of the rental term. Along with the deposit, or any remaining balance after deductions, the landlord must provide tenants with an itemized list of any damages or cleaning charges they are withholding from the deposit.

Tenants should carefully review the landlord's itemized deduction list and make sure they agree with the damages and costs listed. Normal wear and tear cannot be deducted, so look out for unreasonable cleaning fees or charges for minor scratches and faded paint. If tenants dispute any of the deductions as unfair or question the costs, they should send a letter to the landlord explaining their objections. It's best to do this quickly, while the details are still fresh for both parties.

If the landlord does not provide the itemized deduction list within 30 days, they forfeit the right to withhold any portion of the deposit. The landlord would then need to return the full security deposit immediately upon the tenant's request.

Disputing Improper Deductions

If you believe the landlord has made unfair or improper deductions from your security deposit, you have the right to dispute them. Normal wear and tear cannot be deducted from a security deposit in Michigan. This includes things like minor scuffs on the walls, faded paint, worn carpet, and light scratches on floors or countertops that occur through regular use over time. If the landlord tries to charge for normal wear and tear, you should dispute it.

To dispute improper deductions, send a formal letter to the landlord contesting any unfair charges. List each charge you disagree with and explain why it qualifies as normal wear and tear or was pre-existing when you moved in, if you have documentation such as photos or your move-in checklist. Politely ask the landlord to remove these improper deductions and return the amount withheld for normal wear and tear. Make sure to send the letter through certified mail and keep a copy for yourself.

If the landlord refuses to revise improper deductions, you may have to take further action by filing in small claims court to recover the disputed amount. Having documentation and written communication showing you contested the deductions will help your case. Don't ignore unfair charges - make sure to dispute them in writing.

Understanding Normal Wear and Tear 

Normal wear and tear refers to the expected decline in the condition of a rental unit over the course of a tenancy. Landlords in Michigan cannot deduct costs from the security deposit to repair or replace items that have experienced normal wear and tear.

What qualifies as normal wear and tear? In general, minor cosmetic flaws like faded paint, minor scuff marks on walls or floors, worn carpeting, and light scratches would be considered normal wear for which the tenant is not responsible. These are natural results of living in the unit over time.

On the other hand, excessive damage beyond normal use can be deducted from the security deposit. This includes large stains or holes in the carpets or walls, broken fixtures like cabinet doors or handles, cracked tiles, damaged countertops, broken windows and torn screens. The tenant is typically responsible for repairing any damages beyond regular use.

The standard is whether the rental is left substantially in the same condition as when the tenant moved in, aside from minor cosmetic issues. Landlords cannot charge tenants to repaint walls or replace flooring just because it appears worn. But they can deduct for damage like drawing on the walls or pet urine stains in the carpet.

Taking Action After 30 Days

If the landlord does not return your security deposit or provide an itemized list of deductions within 30 days after you move out, they forfeit the right to deduct anything from your deposit. At this point, you can take legal action to recover your full security deposit.

Under Michigan law, if a landlord fails to comply with the 30 day deadline, the tenant can sue for double the amount wrongfully withheld. For example, if your deposit was $1000 and the landlord provides nothing back after 30 days, you could take them to small claims court and be awarded $2000 - the full $1000 deposit plus an extra $1000 penalty.

It's important to note that the 30 day countdown starts on the date you provided the landlord your forwarding address in writing. So be sure you have evidence of properly notifying them of your new address. 

If it has been over 30 days and the landlord is unresponsive or refuses to return your deposit, consult with a local tenants rights organization to understand your options. Sending a demand letter requesting your full deposit back may prompt the landlord to comply before needing to go to court. But if you ultimately need to file in small claims court, bring evidence like your lease, move-in/out documentation, and records of communication.

Going to Small Claims Court

If you believe your landlord wrongfully withheld your security deposit in Michigan, you may need to take them to small claims court to recover the amount owed. Small claims court handles cases involving monetary amounts up to $6,000, making it the ideal venue for security deposit disputes. 

When going to small claims court over a security deposit, make sure to bring evidence to support your case. Photos documenting the condition of the rental upon move-in and move-out are very helpful. Bring printed copies to submit as exhibits. Also provide copies of any letters, emails, texts or other written communication with your landlord regarding the deposit. 

Many security deposit cases end in a settlement between the tenant and landlord before going to trial. Try to negotiate a fair return of your deposit before filing a claim. Offer to meet and discuss the disputed deductions. If the landlord refuses to settle, explain that you intend to file a claim in small claims court.

If a settlement cannot be reached, the small claims court magistrate will hear arguments from both sides at the trial and issue a binding judgement on how much of the security deposit must be returned to you.

Frequently Asked Questions

What happens if a landlord does not return a security deposit in 30 days in Michigan?

In Michigan, if a landlord fails to return a security deposit within 30 days after a tenant has vacated the premises, the landlord loses the right to withhold any of the deposit and may be liable to pay twice the amount withheld, plus attorney fees and court costs, provided the tenant has supplied a forwarding address in writing.

What is Act 348 security deposit law in Michigan?

Act 348, known as the Michigan Security Deposit Act, regulates the handling, return, and retention of security deposits by landlords. It requires landlords to keep security deposits in a regulated financial institution, provide an inventory checklist to tenants, and return deposits within 30 days of tenancy termination, among other stipulations.

What is the 554.613 law in Michigan?

Section 554.613 of Michigan law pertains to the procedure landlords must follow when retaining any portion of a security deposit. It requires landlords to send a detailed list of damages, the estimated cost of repairs, and the remaining balance of the deposit, if any, to the tenant's last known address within 30 days after the tenant has vacated.

Can a landlord charge for cleaning in Michigan?

Yes, a landlord in Michigan can deduct cleaning costs from the security deposit if the cleaning is necessary to return the unit to the condition it was in at the start of tenancy, excluding normal wear and tear. However, the lease must include a clause that allows for such deductions.

What is considered normal wear and tear in Michigan?

Normal wear and tear in Michigan includes minor issues that occur naturally as a result of use over time, such as faded paint, worn carpeting, or loose door handles. It does not include damages that impair the functionality or drastically alter the appearance of the property, like large stains, holes in walls, or broken fixtures.

What are my renters' rights in Michigan?

Renters in Michigan have rights to a habitable living environment, the return of their security deposit under the terms of the lease and state law, and privacy, meaning landlords must provide notice before entering the property. They also have the right to withhold rent under certain conditions, like unresolved health and safety issues, and to seek legal redress for any violations of their rights under the lease or state laws.