MEMORANDUM TO LANDLORDS

RE: Compliance with Security Deposits Receipts Act, MCL 554.601 et seq.

To comply with the Michigan law regarding security deposits, the following notes regarding the law should be kept in mind:

1.        A security deposit cannot exceed one and one-half months rent. (MCL 554.602)

2.        You must notify the tenant with all of the information provided on our Landlord-Tenant Compliance Statement within 14 days from the date a tenant assumes possession of the rental unit. If you do not do so, the tenant will not have to provide you of his or her forwarding address when he or she leaves in order to claim his or her security deposit. (MCL 554.603)

3.        The security deposit must be deposited in a regulated financial institution (e.g. bank), and maintained there, unless the bond requirements of the statute are met. (MCL 554.604)

4.        It is the obligation of the landlord to provide inventory checklists to document the condition of the premises. The tenant should be provided two copies of the inventory checklist, one for him or her to fill out for his or her records, and the other to provide to the landlord. The inventory checklist must comply with the statute and contain the provisions shown on the inventory checklist which we provided to you with your lease. (MCL 554.608)

5.        Upon termination of the tenancy, the landlord must complete a termination inventory checklist showing all damages the landlord claims were caused by the tenant. (MCL 554.608(5))

6.        After the tenancy terminates, the landlord has 30 days to provide an itemized statement of damages and charges to the tenant. If the damages are less than the amount of the security deposit, the balance in excess of the damages is to be returned to the tenant. If the damages exceed the amount of the security deposit, the landlord may keep all of the security deposit and sue for the balance. (MCL 554.609)

7.        The itemized list of damages sent to the tenant must include the following statement in boldface type, "YOU MUST RESPOND TO THIS NOTICE BY MAIL WITHIN SEVEN DAYS AFTER RECEIPT OF SAME, OTHERWISE YOU WILL FORFEIT THE AMOUNT CLAIMED FOR DAMAGES." (MCL 554.609)

8.        If the landlord does not comply with the notice provision to the tenant as described in the preceding two paragraphs, the failure to comply with those requirements constitutes an agreement by the landlord that no damages are due and all of the security deposit must be immediately returned to the tenant. (MCL 554.610)

9.        If the tenant fails to give his forwarding address within four days after he terminates occupancy as required by the law, then the landlord is relieved of sending the notice described in the preceding three paragraphs, but that does not bar the tenant from claiming part or all of the security deposit. (MCL 554.611)

10.        If the landlord gives the required notice and itemization of damages as described above, the tenant must respond within seven days indicating in detail his or her agreement or disagreement with the damage charges claimed. The date of mailing by the tenant is considered the date of the tenant's response. (MCL 554.612)

11.        If the damages are disputed, or if the damages exceed the amount of the security deposit, the landlord has 45 days to commence an action in court to resolve the dispute. The only way a landlord can avoid the requirement of going to court to retain the security deposit (or any part thereof) or get additional damages is if one of the following has occurred:

The tenant did not provide a forwarding address as required by the law, or
The tenant failed to respond to the itemized notice of damages as required by the law, or
The parties have agreed in writing to the disposition of the security deposit, or
The amount claimed by the landlord is entirely based upon unpaid rents for periods which the tenant had actual or constructive possession of the premises.

NOTE WELL: