Michigan security deposit law

A Michigan security deposit may not exceed one and a half months' rent. The cap covers every deposit the tenant pays, including a refundable pet deposit and any required prepaid rent beyond the first full rental period.

MCL 554.602 MCL 554.601(d)

• A security deposit includes any amount returnable to the tenant if the unit comes back in the condition the lease requires, and any rent charged for one period above the average rent for the term. MCL 554.601(d)
• An amount paid for an option to purchase is not a deposit unless the arrangement was meant to evade the act. MCL 554.601(d)(i)
• You may not require a deposit at all unless you give the tenant a written deposit notice within 14 days after the tenant takes possession. MCL 554.603 See Landlord name and address on the Michigan page
• A lease cannot waive any right the security deposit act gives the tenant, and a clause that tries is void. MCL 554.606 MCL 554.633(1)(b)

Within 30 days after the tenant's occupancy ends (move-out), you must mail the tenant an itemized notice of any damages you claim, with the estimated repair cost of each item, along with the balance of the deposit. If you miss the 30 days, the law treats it as your agreement that nothing is owed and you must return the full deposit immediately.

MCL 554.609 MCL 554.610

• You may apply a deposit only to actual damage beyond what normal living in the home causes, unpaid rent, rent due because the tenant ended the lease early, and utility bills the tenant left unpaid. MCL 554.607
• Instead of enclosing a check or money order, you may now send the balance by direct deposit or electronic transfer to the tenant's bank, internet or mobile payment account, within 10 days after mailing the notice of damages. This option took effect September 21, 2026. MCL 554.609(3)
• The notice of damages must carry a fixed statement, in 12 point bold type at least 4 points larger than the rest of the notice, telling the tenant to respond by mail within 7 days or forfeit the amount claimed. MCL 554.609(4)
• The tenant must give you a forwarding address in writing within 4 days after moving out. If the tenant does not, you are relieved of sending the notice of damages, but the tenant can still claim the deposit later. MCL 554.611
• To keep a disputed amount, you must sue for it within 45 days after the tenant's occupancy ends, unless the tenant gave no forwarding address, did not respond to your notice, agreed in writing, or the whole claim is unpaid rent for a period the tenant had possession. Otherwise return the balance. MCL 554.613(1)
• A landlord who does not comply fully with that 45-day rule waives all claimed damages and owes the tenant double the amount of the deposit retained. MCL 554.613(2)
• If you sell or transfer the property, you stay liable for the deposit until you transfer it to the new owner and tell the tenant by ordinary mail the new owner's name and address, the new owner complies with the deposit account rule, or the deposit is returned. MCL 554.614

You must place the security deposit in a regulated financial institution. You may use the deposited money for any purpose only if you file a cash bond or surety bond with the Secretary of State covering all deposits up to $50,000 plus 25 percent of any amount above that. The security deposit act sets no interest requirement.

MCL 554.604 MCL 554.601 to 554.616

• Until you establish a right to it, the deposit is legally the tenant's property. MCL 554.605
• Your deposit notice must name the financial institution or surety holding the deposit, with its address. MCL 554.603

If you require a security deposit, when the lease begins, you must give the tenant two blank copies of a move-in inventory checklist covering everything you own in the unit, from carpeting and appliances to walls, doors and fixtures. The tenant returns one completed copy within 7 days after getting possession, unless you both agree to a shorter time.

MCL 554.608

• Each checklist must start with a fixed notice in 12 point bold type at the top of the first page, which also tells the tenant they may ask for the last move-out checklist from the prior tenants. MCL 554.608(4)
• At move-out you complete a termination checklist on the same form, listing every damage you claim the tenant caused. MCL 554.608(2), (5)
• Damage already claimed on a move-out checklist before this tenant's occupancy cannot be charged again. MCL 554.609(2)