Frequently Asked Questions

Can a landlord require a security deposit?

Yes, a landlord can require a security deposit for each rental unit.

What is the most a landlord can ask for on a security deposit?

A security deposit shall not exceed 1.5 months rent.

Do I have to give my landlord a forwarding address to get my security deposit back?

You must notify your landlord in writing within four days after you move of a forwarding address where you can be reached and where you will receive mail; otherwise your landlord shall be relieved of sending you an itemized list of damages and the penalties adherent to that failure

What can the landlord do with my security deposit once I have turned it over?

The security deposit shall be deposited in a regulated financial institution. A landlord may use the moneys so deposited for any purposes he desires if he deposits with the secretary of state a cash bond or surety bond written by a surety company licensed to do business in the State of Michigan and acceptable to the attorney general to secure the entire deposits up to $50,000 and 25% of any amount exceeding $50,000.

Whose property is the security deposit?

For the purposes of the Landlord and Tenant Relationship Act and any litigation arising thereunder, the security deposit is considered the lawful property of the tenant until the landlord establishes a right to the deposit or portions thereof as long as the bond provision is fulfilled, the landlord may use this fund for any purposes he desires.

What are the permissible uses for a security deposit?

  1. • Reimburse the landlord for actual damages to the rental unit or any ancillary facility that are the direct result of conduct not reasonably expected in the normal course of habitation of a dwelling.

  2. • Pay the landlord for all rent in arrearage under the rental agreement, rent due for premature termination of the rental agreement by the tenant and for utility bills not paid by the tenant.

How is my security deposit handled if I damage my rental property?

In case of damage to the rental unit or other obligation against the security deposit, the landlord shall mail to the tenant, within thirty days after the termination of occupancy, an itemized list of damages claimed for which the security deposit may be used as provided in Section 7, including the estimated cost of repair of each property damaged item and the amounts and basis on which he intends to assess the tenant. The list shall be accompanied by a check or money order for the difference between the damages claimed and the amount of the security deposit held by the landlord and shall not include any damages that were claimed on a previous termination inventory checklist prior to the tenant's occupancy of the rental unit. The notice of damages shall include the following statement in twelve point boldface type which shall be at least four points larger than the body of the notice: "You must respond to this notice by mail within seven days after receipt of same, otherwise you will forfeit the amount claimed for damages."

How long do I have to give my landlord notice of my forwarding address after my termination of occupancy?

The tenant shall notify the landlord in writing at the address given under Section 4 of the Landlord and Tenant Relationships Act within four days after termination of his occupancy of an address at which communications pursuant to this act may be received. Failure to comply with this requirement relieves the landlord of the requirement of notice of damages but does not prejudice a tenant's subsequent claim for the security deposit.

How long does a landlord have to commence legal action against my security deposit?

Within forty five days after termination of the occupancy and not thereafter the landlord may commence an action in a court of competent jurisdiction for a money judgment for the damages which he has claimed or in lieu thereof return the balance of the security deposit held by him to the tenant or any amount mutually agreed upon in writing by the parties. A landlord shall not be entitled to retain any portion of a security deposit for damages claimed unless he has first obtained a money judgment for the disputed amount or filed with the court satisfactory proof of an inability to obtain service on the tenant unless:

  1. • The tenant has failed to provide a forwarding address as required.
  2. • The tenant has failed to respond to the notice of damages as required.
  3. • The parties have agreed in writing to the disposition of the balance of the deposit claimed by the landlord.
  4. • The amount claimed is entirely based upon accrued and unpaid rent equal to the actual rent for any full rental period or portion thereof during which the tenant has had actual or constructive possession of the premises..

How is my security deposit handled if my landlord terminates his/her interest in the property I am renting?

Upon termination of a landlord's interest in a rental unit whether by sale, assignment, death, appointment of receiver or otherwise, the landlord or his agent is liable with respect to the security deposit, until the occurrence of any of the following:

  1. • Transfer of the deposit to the landlord's successor in interest and written notification to the tenant by ordinary mail of the transfer and of the successor's name and address.
  2. • Compliance with Section 4 of the Landlord and Tenant Relationships Act by the successor in interest.
  3. • Return of the security deposit to the tenant.

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