To skip down, click on the topic you are looking for: |Security Deposit Law| |Where the Security Deposit Can Be Held| |Getting Your Security Deposit Back|
A security deposit
or damage deposit is any required prepayment of rent other than the
first month's rent. During the time that you live in a place, your
landlord holds on to it, but it's your money. Landlords earn money,
legally and illegally, from security deposits. The legal earnings come
from the interest that landlords collect. The illegal earnings come
from the many illegal fees that landlords often deduct from security
deposits. To prevent your landlord from withholding money that is legally yours, know the law and follow the steps below.
The Security Deposit Law
Security deposits are regulated by the Michigan Landlord-Tenant Act.
The law applies to all tenants in the state, including subtenants, and
applies to verbal as well as written leases. It states that the total
security deposit charged cannot be more than one and a half times the monthly rent. Security deposits include "any required prepayment of rent other than the first full rental period of the lease."
Landlords can deduct from security deposits for three things only:
- unpaid rent
- unpaid utilities, or
- actual damages to the rental unit
These "actual damages"
must be the result of conduct not reasonably expected in the normal
course of living. Therefore, a landlord may not deduct to pay for
damages that are the result of normal wear and tear.
For example, a chair that rubs or bumps against a wall may leave marks,
or your feet walking on the carpet may pack it down. However, these
marks and carpet wear are not damage. Some marks are to be expected as
normal wear and tear. Your landlord may not use your security deposit
money for a normal cleaning job. But if
someone threw a chair or a hammer through the wall, the damage to the
wall would be unusual and the landlord could deduct the costs of
Where the Security Deposit Can Be Held
The Security Deposit Act also requires that the landlord deposit the money in a regulated financial institution. The name and address of
the institution must be given to the tenant upon rental and the
landlord may only use the money if s/he posts a bond in its place with
the Secretary of State. If a bond is posted, the landlord may use the
money, even though the deposit legally remains property of the tenant.
Landlords are not required to pay the tenant interest earned on
Getting Your Security Deposit Back
- When moving in
When you first move into your apartment, your landlord is required to present you with an inventory checklist. If your landlord does not provide a checklist, ask for one; it is your protection against being charged for damages that existed before you moved in.
On this list, write down every damaged thing that you see, regardless
of how minor it might appear - for example, paint chips, cracked
windows, broken tile, stained sinks or carpets, scratches on furniture,
torn upholstery or screens. You must return a copy of the inventory
checklist to your landlord within seven days from your move-in date. Keep a copy.
A copy of the checklist can be very helpful in getting back your
security deposit at the end of your lease. The inventory checklist is
proof of the condition of the apartment before you moved in.
- When moving out
- You must give your landlord a forwarding address, in writing, within four days of
the date you move out. It might be a good idea to send it certified
mail or give it to her or him in person. If you are moving out of
state, consider giving the landlord a local address that will accept
mail for you. Some landlords will make deductions if they think the
tenant has moved out of state and it will not be worth the tenant's
expense of returning to sue in Small Claims Court. This is illegal,
but it's a typical landlord tactic to make more money.
- Within 30 days of the date you moved out, your landlord must send you an itemized list of any deductions claimed and the remainder of your deposit,
or your full deposit if no charges are taken out. If your landlord
does not meet this 30-day requirement, she or he technically loses all
claims to your security deposit and must return it in full, unless the
withheld money is for past rent that is due.
The notice listing any deductions from your deposit must include in boldface type the warning: "You
must respond to this notice by mail within 7 days after receipt of
same, otherwise you will forfeit the amount claimed for damages."
If your landlord
has not contacted you within 30 days, you may need to send her or him a
letter stating that it has been more than 30 days and thus any claim on
your deposit has been forfeited. Also state that if you do not receive
your deposit in full within 45 days of the date you moved out, you
intend to file in Small Claims Court
and sue for double the deposit as provided by state law. Attempting to
settle the dispute out of court in this way may increase your chances
of successfully settling with your landlord, or at least improve your
chances of winning double the security deposit. As always, keep copies
of letters; they may be helpful in court. (See our "Sample Letters-Tenant Demanding Return of Security Deposit.")
- To contest the
amount the landlord withheld, you must respond in writing within seven
days of receiving the list of deductions. The letter must be mailed
within seven days. You may dispute all or any portion of the
landlord's list of deductions. You can dispute a claim for damage on
the basis of it not happening while you were there, that it is not
actual damage, or that the amount the landlord is asking for is too
high for the damage done. It may be helpful to refer to your inventory
checklist as proof that the damage was there before you moved in (see
our information on moving in, above; also see our "Sample Letters-Tenant Disputing Deductions from Security Deposit").
You are supposed to
respond within seven days of receiving the landlord's list of
deductions. However, if you do not, you have not necessarily given up
the right to get your money back, but you may have eliminated your
chance of receiving double your security deposit back after 45 days. If
you miss the seven day deadline, respond in writing as soon as
- If the landlord
does not settle on the terms of your letter or make some alternative
settlement with you within 45 days of the date you moved out, she or he
is supposed to sue you in Small Claims Court keep any disputed amount
beyond actual rent for the time you were in the unit, or money to
satisfy an eviction judgment. Landlords rarely do this.
- If your landlord does not sue within 45 days, you are entitled to sue in Small Claims Court for double the amount in dispute.
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