Renting Out Your Property in Michigan: A Landlord's Guide

Before renting your property, familiarize yourself with Michigan's landlord-tenant laws, particularly the Michigan Truth in Renting Act and the Michigan Security Deposit Act. These laws govern your rights and responsibilities as a landlord, including security deposit limits, notice requirements, and tenant rights. The Michigan Legislature website provides access to these statutes.

Many Michigan municipalities require rental properties to be registered and inspected before they can be legally rented. Contact your local housing department to determine what permits, licenses, or certificates of compliance are needed in your specific area. Requirements vary significantly between cities like Detroit, Grand Rapids, Ann Arbor, and smaller communities.

Create a comprehensive rental application to screen potential tenants. Under Michigan law, you can collect application fees, but they must be reasonable and used for actual screening costs. The application should request information about employment, income, rental history, and references. Be aware that Michigan follows federal Fair Housing laws prohibiting discrimination based on protected characteristics.

Draft a legally compliant lease agreement that clearly outlines all terms and conditions of the tenancy. In Michigan, the lease must comply with the Truth in Renting Act, which prohibits certain provisions that waive tenant rights. Include details about rent amount, due date, lease term, maintenance responsibilities, and grounds for termination. Consider having an attorney review your lease to ensure compliance with state law.

Create a separate document outlining house rules and regulations that tenants must follow. This may include policies on noise, guests, smoking, pets, parking, and common area usage. In Michigan, these rules must be reasonable and cannot contradict rights granted to tenants under state law or the lease agreement.

For properties built before 1978, federal law requires landlords to disclose known information about lead-based paint hazards before leases take effect. You must provide tenants with an EPA-approved pamphlet on lead hazards and include specific disclosure language in your lease. Michigan follows these federal requirements, and failure to comply can result in significant penalties.

Michigan law requires landlords to provide tenants with an inventory checklist at the beginning of tenancy. This document records the condition of the property and must be completed by both parties. The same checklist is used when the tenant moves out to determine if any damage occurred beyond normal wear and tear. This is crucial for security deposit disputes.

In Michigan, security deposits are limited to 1.5 times the monthly rent. You must provide tenants with a receipt for their security deposit and inform them in writing of their right to request a move-out inspection. The receipt should include where the deposit is being held and the tenant's rights regarding the deposit under Michigan law.

Michigan law requires landlords to provide reasonable notice before entering a tenant's unit, except in emergencies. While the statute doesn't specify an exact timeframe, 24-48 hours is generally considered reasonable. Create a form to document when and why you need to enter the property to maintain good records and respect tenant privacy rights.

Michigan law requires security deposits to be held in a regulated financial institution with a physical presence in the state. Within 14 days of receiving a security deposit, you must provide tenants with written notice of where the deposit is being held. Consider setting up a separate account specifically for security deposits to avoid commingling funds.

Obtain appropriate insurance coverage for your rental property. Standard homeowner's insurance typically doesn't cover rental activities. You'll need a landlord policy that covers the building, liability protection, and potentially loss of rental income. While not legally required in Michigan, mortgage lenders typically require insurance, and it provides essential protection against financial losses.

Determine how you'll collect rent (check, electronic payment, etc.) and what your policies are regarding late payments. Michigan law allows landlords to charge late fees, but they must be reasonable and clearly stated in the lease. Be aware that Michigan does not have rent control, but you must follow the lease terms regarding rent increases.

Establish a clear procedure for tenants to report maintenance issues and for you to respond to them. Michigan landlords have a legal obligation to maintain rental properties in habitable condition. Failure to make necessary repairs can result in tenants withholding rent or making repairs themselves and deducting the cost from rent under certain circumstances.

Familiarize yourself with Michigan's legal eviction process, which requires proper notice and court proceedings. Self-help evictions (changing locks, removing belongings, shutting off utilities) are illegal. Different notice periods apply depending on the reason for eviction: 7 days for nonpayment of rent or serious lease violations, 30 days for month-to-month tenancies, and 24 hours for illegal drug activity.

If required in your municipality, register with local tax authorities. Some Michigan cities have specific taxes on rental properties or require landlords to report rental income. Check with your local treasurer's office to determine if there are any specific tax requirements for rental property owners in your area.