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The Security Deposit- Explained

photo via legalcrunch.com

photo via legalcrunch.com

 

It’s required by landlords across the country, and in Michigan it can be as high as 1.5 times the monthly rent. But what, if any, rules surround the security deposit for both the landlord and tenant in Michigan? Read on to find out.

Unlike a fee, the refundable security deposit is the tenant’s property, and during tenancy must be kept in either a regulated financial institution or deposited into a cash or surety bond. The landlord must disclose to the tenant(s) where the security deposit will be held.

* Any refundable fee is considered part of the security deposit and therefore, with the security deposit shall not exceed the limit of state designated security deposit amount.

Upon the termination of a lease, the tenant retains full right to the security deposit unless the landlord establishes the right to it for one of the following reasons:

  1. Tenant owes unpaid rent
  2. Tenant owes unpaid utility bill(s)
  3. Tenant caused damaged to property beyond typical wear and tear

Tracking damages is crucial, and filling out a complete checklist upon tenant move in or out of property is imperative when it comes to understanding responsibility for damages for both tenant(s) and landlord. Taking pictures is also a good idea.

 

Some numbers to remember when it comes to a security deposit:

-Within 14 days of tenant moving into the property, landlord must provide to tenant landlord’s address and name of where deposit is being held.

-The tenant has 4 days upon moving out to provide landlord with a forwarding address. Failing to do so can result in the tenant forfeiting the deposit.

– Landlord has up to 30 days to respond to tenant (upon move out) with the money owed, and if not all of the security deposit will be returned, landlord must provide an itemized list against any money kept.

-Tenant then has 7 days to respond to charge in detail by mail

Then arises the opportunity to negotiate, mediate or take the issue to court.

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