It is common for a Michigan landlord to collect a security deposit from new tenants. There are a variety of different rules Michigan law has in place regarding security deposits. It can be very important for landlords to understand and follow these rules when it comes to their security deposit policies and practices, as failure to do so could cause a landlord to be in a tough legal situation that could have negative financial implications.

Among the security-deposit-related issues that state law has rules on are what things landlords are allowed to keep part or all of a tenant’s security deposit for when the rental relationship with that tenant ends. Generally, under Michigan law, a landlord can only keep a deposit to use it to cover the following:

  • Past-due rent the tenant owes.
  • Utility bills the tenant hasn’t paid.
  • Rent a tenant owes due to terminating their rental agreement prematurely.
  • Actual damage the rental unit the tenant rented or ancillary facilities suffered from conduct that is outside of the reasonable expectations of conduct related to normal habitation.

Now, sometimes, when a landlord keeps a safety deposit of a departing tenant, the tenant may try to argue that the landlord is keeping the deposit for some reason other than the ones allowed by state law and thus that the withholding of the deposit is improper. This is an example of one of the security deposit disputes that can arise between landlords and tenants.

Security deposit disputes with a departing tenant have the potential to be very impactful on a landlord. Thus, when a landlord is facing such a dispute, they may want to seek out guidance from a landlord litigation attorney regarding what their legal position is and what their options are.