The Great Lakes state is a lucrative one for real estate investors of all kinds. From luxury lakeside properties to student housing and residential living in the state’s major urban hubs, Michigan has a lot to offer those interested in buying and renting out property.
However, before you can rent units in Michigan, you must first understand the legal regulations in the state. Michigan landlord tenant laws are designed to regulate the relationships between landlords and tenants so that each party gets a fair experience. If you aren’t aware of these laws and accidentally violate one, you could face severe penalties and fines.
Here’s a quick guide to the Michigan rental laws that apply in each part of the leasing process.
Listing Units and Screening Tenants
Michigan’s rental laws apply before you’ve even officially filled your first unit. There are several fair housing laws that regulate the language you may use in your rental advertisements and the steps you can and cannot take during tenant screening.
Firstly, both federal and state law prohibit discriminatory language in any listing as well as any discrimination during the tenant screening process. This includes language that would express a preference for any tenant based on their race, color, national origin, religion, sex, familial status, and disability. The Michigan Fair Housing Act also adds age and marital status to this list of protected classes. None of these factors can influence your decision to rent to a tenant—in fact, you shouldn’t ask about them at all on a rental application.
Some cities in Michigan also regulate the use of criminal background checks during tenant screening. In Ann Arbor, for instance, a fair housing law forbids landlords from inquiring about or requiring applicants to disclose their criminal histories. Be sure to read up on the local laws in your municipality in addition to state-wide laws.
Writing Rental Agreements
Rental agreements are also regulated in Michigan. When writing a rental agreement or lease, you must include the following required disclosures:
- Lead-based paint hazards – Include the EPA-regulated pamphlet required by the federal government in every lease for buildings constructed before 1978.
- Landlord/agent identity—Landlords must disclose their own names and contact information (or that of their authorized agent)
- Truth in Renting Act—Michigan landlords must include a notice about landlord-tenant rights and responsibilities as per the Truth in Renting Act.
- Security deposit receipt– Include a receipt for all security deposits
- Move-in and out checklists- Landlords must provide inventory checklists both at move-in and move-out.
- Domestic violence disclosure—Landlords must inform tenants that they have the right to be released their leases in cases of domestic violence.
Other than these required elements, Michigan law gives landlords a lot of freedom in writing rental agreements. There are no restrictions on late fees or minimum grace periods, nor are there rent control laws in the state—in fact, rent control is banned in Michigan. This means you can define and enforce your own policies for rent and fees.
Collecting and Returning Security Deposits
Security deposits are highly regulated across all 50 states. In Michigan, deposit amounts are limited to 1.5 months’ rent. Once you’ve received a security deposit, you must deposit the funds in either a regulated bank or a cash/surety bond. You aren’t required to pay interest that accrues on deposits, but you are required to return them to tenants within 30 days of the termination of a tenancy. You may withhold funds from the security deposit for unpaid rent, unpaid utility bills, premature termination, or actual damages to the rental unit.
Evicting a Tenant
Evictions also typically involve complex legal procedures. We won’t detail the entire Michigan eviction process in this article, but here are a few of the eviction notice requirements you should know.
- Rent demand notice: if a tenant fails to pay rent when due, landlords in Michigan may send a seven-day notice to pay or quit. After any grace periods, your tenant gets seven additional days to pay their rent before they will be required to move or undergo eviction.
- Notice for illegal drug activity: According to eviction laws in Michigan, if a tenant is found to be manufacturing, delivering, or possessing illegal drugs on the premises, and a police report is filed about it, the landlord may terminate the tenancy with a written 24-hour notice to quit.
Note that if you don’t have a just cause for an eviction (the tenant is paying rent on time and hasn’t violated any lease terms), you will need to send a typical nonrenewal notice to terminate a tenancy. The notice should indicate that the lease will terminate after its expiration date.
Conclusion
Michigan landlord-tenant laws may not be the most pleasant reading material for your summer, but they may be some of the most important. By understanding these crucial laws and others, you can be sure to maintain a compliant rental business in Michigan.