All You Need To Know About Your Rental Security Deposit In Michigan

What is a Security Deposit?

A security deposit, or damage deposit, is money, beyond your first month’s rent, that you have to pay your landlord when you move in. Your landlord holds this money as long as you live in the place. When you move out, if you have paid all your rent and utility bills and you have not damaged the place, the landlord has to give you back your money.

Remember, a security deposit is any money over and above your first month’s rent. It does not matter what the landlord calls the money, it still is a security deposit. If you pay your first and last month’s rent when you move in, the last month’s rent is really a security deposit. The only recognized exception to this rule in Michigan is a non-refundable fee, such as a cleaning fee paid at the beginning of a tenancy.

What Can a Security Deposit Be Used For?

A security deposit is like an insurance policy for the landlord. It helps:

  • Pay the landlord if you move out owing rent or utilities, or:
  • Have damaged the rental unit beyond normal wear and tear.

In Michigan, this is all a deposit can be used for. If you do not owe rent or utilities when you move out, and you have not been damaged the place, the landlord has to give you your money back.

What is “Normal Wear and Tear”?

We all know that things like furniture, appliances, and carpets wear out after a while just from being used. We also know that walls get dirty and need to be painted from time to time. This is normal “wear and tear”.

A landlord cannot use your security deposit to fix “normal wear and tear”. This means that he cannot keep your deposit to do things like shampoo the carpets or clean and paint the walls for the next tenant unless you have really damaged them.  Naturally, landlords and tenants often disagree on whether something is “normal wear and tear” or damages. Sometimes a judge or mediator has to decide.

How Much Can a Landlord Charge for a Security Deposit?

In Michigan, a landlord cannot charge more than one and a half (1½) times your monthly rent for a security deposit. So, for example, if you pay $500.00 a month in rent, the landlord cannot ask for more than $750.00 as a deposit. This is true no matter what she calls the deposit money. If you landlord wants the last month’s rent plus a security deposit, it cannot come to more than one and a half (1½) times your monthly rent.

Who Does the Security Deposit Belong To?

The deposit belongs to you, the tenant. The landlord is just holding your money for you, and must deposit the money in a financial institution, such as a bank or credit union. If you follow the law, the landlord has to sue you before he can legally keep any of the deposit.

What is Michigan’s Security Deposit Law?

Michigan’s security deposit law, sometimes called the Security Deposit Act, tells landlords and tenants what their rights and responsibilities are concerning security deposits. This law was written to protect tenants, but you have to be sure to follow it if you want to get your deposit back. At the Michigan Legislature site, you can find a full text of the act.

  • Within (30) days after you move out your (former) landlord either has to return your deposit or send you a list of the things that she claims as damages (a “notice of damages”).  If the landlord does not do this, the law says that she gives up any right to keep your security deposit. But, if you did not give your landlord your forwarding address within 4 days after moving out (assuming your landlord told you in writing of this responsibility), your landlord does not have to give you a notice of damages.
  • The notice of damages must say in large type that “you must respond to this notice by mail within 7 days after receipt of same, otherwise you will forfeit the amount claimed for damages.”
  • So, if your landlord sends you a notice of damages, and you disagree with it, you have 7 days to mail a response to your landlord

How Can I Sue My Landlord?

If your landlord owes you three thousand dollars ($3,000.00) or less, you can sue him in Small Claims Court. This is a special court where people cannot have lawyers. If your landlord owes you more than three thousand dollars (3,000.00) you can still sue him in Small Claims Court, but you will have to give up everything over the Small Claims Court limit. To find our more about Small Claims Court visit the Small Claims Self Help website.  Unlike most other court decisions, a small claims court decision cannot be appealed.  If your landlord objects to small claims for this reason or because she wants to have an attorney, the case will be transferred to the general district court

If you want to sue for more than the Small Claims Court limit or otherwise do not want to be in small claims court , you will have to sue in the District Court’s trial court division. Suing in the trial court division may be more complicated than suing in Small Claims Court, so you might need a lawyer.

To learn more about housing rights in Michigan and where to get help:

Consult the Michigantenants.org website for local housing resources and tenant counseling services.

If you have questions about your security deposit contact Samantha Moffett at (248) 624-5500 or by email at Samantha@ambroselawgroup.com

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3 Comments

Filed under Landlord/Tenant Issues

3 responses to “All You Need To Know About Your Rental Security Deposit In Michigan

  1. Pingback: How To Resolve Landlord/Tenant Issues And Neighborhood Disputes « Ambrose Law Group

  2. Michael

    Great article. How should I tell my landlord if I’m going to apply my last month’s security deposit as rent?

    I don’t trust the landlord to return the deposit, and think that he’ll just accept this instead of suing – especially when the net result to him is the rent plus $300.

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