9. SUIT TO RETAIN A DISPUTED SECURITY DEPOSIT
If a landlord wants to keep part or all of a security deposit after the tenant has disputed charges claimed by the landlord, the landlord has 45 days after the termination of tenancy to bring suit against the tenant in order to keep the disputed money. The security deposit is considered the tenant’s property until a landlord obtains a money judgment from the court for the disputed amount. The 45-day limit for the landlord to file suit to keep the security deposit will not apply where: (a) The landlord has filed with the court satisfactory proof of an inability to obtain service on the tenant. (b) The tenant has failed to provide his/her written forwarding address. (c) The tenant has failed to respond to the notice of damages within the seven-day limit. (d) The parties have agreed in writing to the disposition of the balance of the deposit claimed by the landlord. (e) The amount claimed is entirely based upon unpaid rent equal to the actual rental period or portion thereof during which the tenant had possession of the premises.
11. TERMINATION OF LANDLORD’S INTEREST
Upon termination of a landlord’s interest in a rental unit, he/she is still liable for the security deposit until the occurrence of any of the following: (a) He/she transfers the deposit to the successor and notifies the tenant in writing of the transfer and of the successor’s name and address. (b) The successor deposits the security deposit in a regulated financial institution. (c) The return of the security deposit to the tenant.
security
LANDLORD & TENANT REQUIREMENTS IT’S THE LAW PUBLIC ACT 348
deposit
The information in this brochure is of a general nature only and is provided as a public service of Western Michigan University. It is not intended to take the place of legal advice. Should the reader wish to clarify his or her legal rights with respect to tenancies, he or she is advised to consult with an attorney.
10. FAILURE OF THE LANDLORD TO SUE WITHIN 45 DAYS
Failure of the landlord to comply fully with the 45-day limit on an action to retain a security deposit constitutes waiver of all claimed damages and makes him/her liable to the tenant for double the amount of the security deposit retained. Note: In Martinez v. O’Brien, (1975) the Ingham County Circuit Court ruled that the double damages provision in section 13, Public Act 348 is mandatory, not discretionary.
Community Living
3510 Faunce Student Services Bldg. Western Michigan University Kalamazoo, MI 49008-5077 Phone: 269-387-2336 Fax: 269-387-4786 E-Mail: ocl@groupwise.wmich.edu http://www.ocl.wmich.edu
3/06
An Educational Resource
Community Living
Division of Student Affairs
Published By
WESTERN MICHIGAN UNIVERSITY
1. AMOUNT OF SECURITY DEPOSIT
A security deposit shall not exceed one and onehalf month’s rent. Note: It has been ruled in Stutelberg v. Practical Management, Michigan Court of Appeals (1976), that a nonrefundable cleaning fee is not a security deposit, therefore it is not covered by Public Act 348. The court ruled further that a landlord can demand a nonrefundable cleaning fee if the following conditions are satisfied: 1. The fee is set at the beginning of the tenancy and the tenant is informed of and agrees to the charge in writing The fee is for the defrayment of cleaning expenses between tenancies The fee is absolutely nonrefundable
3. DISPOSITION OF SECURITY DEPOSIT
The security deposit shall be deposited in a financial institution. Landlords may use it if they deposit a bond with the Secretary of State.
6. ENDING INVENTORY CHECKLIST
At the termination of the occupancy, the landlord must complete a termination inventory checklist listing all the damages he/she claims were caused by the tenant.
4. USE OF SECURITY DEPOSIT
A security deposit can be used only for the following purposes: (a) Reimburse the landlord for actual damages not reasonably expected in the normal course of habitation. (b) Pay the landlord for rent in arrearage, rent due for the premature termination of the rental agreement, and for utility bills not paid by the tenant. Note: It has been ruled in Smolen v. Dahlman, Michigan Court of Appeals, (1983), that cleaning expenses are not actual damages. Therefore cleaning expenses cannot be withheld from a tenant’s security deposit.
7. NOTICE OF DAMAGES
In case of damages to the rental unit or other obligation against the security deposit, the landlord must mail to the tenant, within 30 days after the termination of occupancy, an itemized list of charges, including the cost of repair of each damaged item. The list must be accompanied by a check for the difference between the charges claimed and the amount of the security deposit. The notice of damages must include the following statement in 12 point boldface type.
2. 3.
2. NOTICE TO TENANT
Within 14 days from the date of occupancy, the landlord must provide the following information in writing to the tenant: (a) The landlord’s name and address. (b) The name and address of the financial institution. (c) The following notice in 12 point bold face type:
5. BEGINNING INVENTORY CHECKLIST
At the beginning of the lease, the landlord must furnish the tenant with two blank copies of an inventory checklist which will list everything in the unit owned by the landlord and provide space for the tenant to note the condition of the property. The checklist must contain the following notice in 12 point bold face type at the top of the first page:
YOU MUST RESPOND TO THIS NOTICE BY MAIL WITHIN 7 DAYS AFTER THE RECEIPT OF SAME, OTHERWISE YOU WILL FORFEIT THE AMOUNT CLAIMED FOR DAMAGES.
8. FAILURE TO SEND NOTICE OF DAMAGES
Failure by the landlord to comply with the notice of damages requirement within 30 days after termination of occupancy constitutes agreement by the landlord that no damages are due and he/she must remit to the tenant immediately the full security deposit.
YOU MUST NOTIFY YOUR LANDLORD IN WRITING WITHIN 4 DAYS AFTER YOU MOVE OF A FORWARDING ADDRESS WHERE YOU CAN BE REACHED AND WHERE YOU WILL RECEIVE MAIL; OTHERWISE YOUR LANDLORD SHALL BE RELIEVED OF SENDING YOU AN ITEMIZED LIST OF DAMAGES AND THE PENALTIES ADHERENT TO THAT FAILURE.
Y O U S HO U L D C O M P L E T E T H I S CHECKLIST, NOTING THE CONDITION OF THE RENTAL PROPERTY, AND RETURN IT TO THE LANDLORD WITHIN 7 DAYS AFTER OBTAINING POSSESSION OF THE RENTAL UNIT. YOU ARE ALSO ENTITLED TO REQUEST AND RECEIVE A COPY OF THE LAST TERMINATION INVENTORY CHECKLIST, WHICH SHOWS WHAT CLAIMS WERE CHARGEABLE TO THE LAST PRIOR TENANTS.