The Michigan real estate market is a lucrative one for many investors in the state. Home to the nation’s longest freshwater coastline, Michigan offers countless lakeside properties and winter-water attractions. Its vibrant towns and outdoor adventures attract visitors, homebuyers, and renters, while cities like Ann Arbor, with one of the U.S.’s youngest populations, allows investors to capitalize on student housing.
But if you do choose to buy and rent properties in the Great Lakes State, there are some stipulations you must follow. These are the Michigan landlord tenant laws, and they govern the rights and responsibilities of both you and your tenants.
This article breaks down five of the most important laws to know before renting properties in Michigan.
#1 Rent control is banned in Michigan.
Let’s start with some good news for landlords – Michigan law bans any rent control laws or ordinances. This means that local governments cannot enact any laws that regulate or cap the price of rent in the state, which is excellent news for landlords. Instead of adhering to a state-wide cap, you can set whatever rate is most reasonable and profitable in your current market.
#2 7 days’ notice is required to evict a tenant for nonpayment.
When it comes to eviction, there are a variety of policies, laws, and procedures Michigan landlords need to follow. One such policy is the eviction notice period. Eviction laws in Michigan dictate that 7 days’ notice is required to evict a tenant who has not paid their rent past the due date.
It’s important to mention that this notice period does not apply until any grace periods have passed. Michigan state law does not require you to provide your tenants with a grace period for rent, but many do anyway. Only after any grace periods are up can you then proceed to send the 7-day eviction notice. You may only file for eviction after this period of seven days is up.
#3 Security deposits are limited to 1.5 months’ rent.
Security deposits are also highly regulated across state landlord-tenant laws. In Michigan, security deposits are limited to one and a half months’ rent. This means for units with higher rent rates, you can correspondingly charge higher security deposits since the risk of damage is presumably higher.
However, security deposits must be refunded to tenants within 30 days of their lease’s termination. If you plan to make deductions from the deposit, you can only do so for actual damages, unpaid rent, or unpaid utility bills. You must also provide an itemized list of these damages and mail them to the tenant before the 30-day period is up, with the following 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.”
#4 Tenants have remedies in case of poor treatment.
Michigan also has laws which protect tenants from potential injustices brought about by their landlords. For instance, if you refuse to make a needed repair or comply with local health and safety laws for housing, your tenant can choose to withhold rent and deposit it in an escrow account until you remedy the breach. The tenant can also choose to arrange for the needed repair themselves by hiring a professional contractor and then deducting the cost of the repair from their next rent payment (this is called the “repair and deduct” remedy). Michigan offers both of these protections to renters, so be sure you’re aware of the consequences for failing to keep your units habitable.
Additionally, Michigan law requires you to disclose these remedies to tenants in the rental agreement or lease. You must include a notice in every lease describing the law that offers these protections, the Truth in Renting Act, and stating that the tenant may seek legal guidance with its interpretation.
#5 Criminal background checks are limited in Ann Arbor.
Fair housing laws are some of the most fiercely defended across the U.S. The Michigan Fair Housing Act provides tenants with protections against discrimination based on a range of classifications, including race, color, national origin, sex, religion, disability, and familial status.
In Ann Arbor and several other cities, these protections are also extended to renters with criminal histories. A local law called the Michigan Fair Chance Access to Housing Ordinance prevents landlords from using or requiring applicants to undergo criminal background checks during tenant screening, with a few exceptions for landlords who receive federal funding. If your properties are located in a city with restrictions on criminal background check usage, be sure you understand them and their implications.
Conclusion
Michigan is a great state for investors of all types, but understanding the state’s laws and regulations is key to a successful rental business. Don’t forget to read them thoroughly and enlist the advice of a legal professional for any questions you may have about the law.
