Overview
Michigan's Security Deposit Act (Mich. Comp. Laws § 554.601 et seq.) provides a comprehensive framework governing security deposits. The law caps deposits at 1.5 months' rent and imposes strict requirements on how landlords must handle, hold, and return deposits.
This guide covers everything landlords and tenants need to know about security deposits in Michigan.
Deposit Limits
Michigan law sets the following security deposit limits:
- Maximum deposit: 1.5 months' rent
- Landlords may not charge any additional nonrefundable fees as part of the security deposit
- Pet deposits or additional fees may be collected separately but are subject to the same overall limit
Deposit Holding Requirements
Michigan landlords must:
- Deposit the security deposit in a regulated financial institution (bank, savings and loan, or credit union)
- Notify the tenant in writing of the name and address of the financial institution within 14 days of receiving the deposit
- Landlords may choose to post a surety bond with the Secretary of State in lieu of holding the deposit in a bank account
cite: Mich. Comp. Laws § 554.603
Allowable Deductions
Landlords may only deduct from the security deposit for the following reasons:
- Unpaid rent: Any rent owed at the time of move-out
- Damage beyond normal wear and tear: Repairs for tenant-caused damage exceeding ordinary use
- Cleaning: Costs to return the unit to the condition at move-in, minus normal wear
- Utility charges: Unpaid utility bills that are the tenant's responsibility under the lease
What Constitutes Normal Wear and Tear?
Normal wear and tear includes:
- Minor scuffs on walls
- Small nail holes from hanging pictures
- Worn carpet from regular use
- Faded paint due to sunlight
Damage beyond normal wear and tear includes:
- Large holes in walls
- Stained or burned carpet
- Broken windows or fixtures
- Pet damage to flooring or doors
Return Timeline
Landlords must return the security deposit within 30 days of the tenant vacating the unit. The return must include:
- The remaining deposit amount (if any deductions were made)
- An itemized written statement listing each deduction and the amount
- A detailed description of the damages or charges applied
Failure to Comply
If the landlord fails to provide the itemized list of damages within 4 days of the end of the tenancy, the landlord forfeits the right to withhold any portion of the deposit for damages. The landlord must then return the full deposit within 30 days. A tenant may recover up to twice the security deposit amount if the landlord wrongfully withholds the deposit.
cite: Mich. Comp. Laws § 554.609
Pre-Move-Out Inspection
Michigan law requires landlords to provide a move-in inventory checklist at the start of the tenancy. Both the landlord and tenant should document the condition of the unit. While Michigan does not have a statutory requirement for a pre-move-out inspection, the move-in checklist serves as the baseline for determining damages at the end of the tenancy.
Tenants are encouraged to:
- Complete and return the move-in checklist within 7 days
- Take photos or video of the unit at both move-in and move-out
- Request a walk-through with the landlord before surrendering the keys
Dispute Resolution
If a tenant believes their deposit was wrongfully withheld, they can:
- Send a demand letter to the landlord requesting the return of the deposit
- File a claim in Small Claims Court (up to $6,500 in Michigan)
- File a complaint with the Michigan Department of Attorney General
Courts may award the tenant up to twice the security deposit amount as a penalty if the landlord failed to comply with the Security Deposit Act.