(PA. 219 of 1931,348 of 1972,454 of 1978)
Leases contain a variety of legal terms and there are a few you should be familiar with in understanding a leasing situation. A LANDLORD is a person or business firm in control of property who allows others to occupy and use it. A landlord may be the owner, an agent or employee of the owner, or a management company. A TENANT is a person who occupies and uses property owned by someone else. A tenant’s right to occupy and use land or buildings is called a leasehold or LEASE. The term “lease” is also used to mean the rental agreement that creates the leasehold. A RENTAL AGREEMENT is the contract between landlord and tenant. Generally, such a contract governs the tenant’s use and occupancy of rental property, and provides for the payment of rent. Rental agreements may be written or oral as long as there is some type of agreement between the landlord and the tenant.
The different types of tenancy that a landlord and tenant can enter into for the rental of residential property include the following :
A fixed-term tenancy agreement will specify a starting date and a termination date. The conditions, rules, and the rent are fixed during the term of the lease agreement and the lease usually cannot be cut short or extended except by mutual consent or breach of the contract (i.e., tenant or landlord fails to keep promises and/or discharge obligations). The lease is often a written document but may be oral unless it exceeds a year in duration.
A periodic tenancy begins on a specific date and is renewed on a regular basis, usually by the month. Rents and rules can change more frequently than in a fixed-term tenancy. It is less likely the lease will be written. Since it is renewable on a monthly basis there is no requirement that it be written.
Stable rent for a specific time period. Fairly secure guarantee. Lease for a fixed term allows less change in arrangements.
Commitment to pay rent for a specific period of time. Tenant can be held liable for payment of rent until end of contract period.
Able to make different housing arrangements quicker. Not committed to rent payments for a specific period of time.
Rent can be increased with 30-day notice or with notice equal to length of rental period (i.e., month, week).
Advantages Of A Written Lease Agreement
Whether there is a fixed-term tenancy or a periodic tenancy, it’s best to have a written record of your rental agreement. A written record is a permanent record that can be referred to if misunderstandings arise. In the absence of a written document signed by both parties, it is advisable to keep a personal written record of mutual agreements. This is for your own benefit; it is not admissible in a court of law.
How To Avoid Potential Lease Problems
Before you, as a tenant, enter into a lease:
- know what you want for housing;
- know what you can afford;
- make a list of your concerns (who pays for utilities, parking, can there be pets, etc.);
- make sure the property suits your needs (if you are into stereo equipment and like to run it late at night, do not move into an apartment complex);
- understand. the lease agreement before you agree to it and/or sign it;
- if you are in doubt about its terms, have an attorney look at it and advise you;
- don’t agree to a lease you know you cannot live with (this applies to landlords as well).
Provisions Of The Rental Agreement
Leases differ in terms but a written rental contract, in order to be valid, should include:
- the name(s) and signature(s) of the landlord(s);
- the name(s) and signature(s) of the tenant(s);
- the amount of rent to be paid, how frequently, and when it is to be paid;
- a description of or location of the premises to be rented;
- the starting and ending dates, if it is a fixed-term tenancy;
- the landlord’s name and mailing address;
- the amount of the security deposit, if any; (see Deposits and Checklists)
- the name and address of the financial institution holding the security deposit;
- notice of the tenant’s obligation to supply a forwarding address within four days of terminating the tenancy;
- definition of responsibility for paying utilities;
- maintenance responsibilities; (see Maintenance)
- notice to quit procedures; (see Evictions) and
- any other agreements the landlord and tenant may wish to make.
Note: Attached to the lease should be two copies of an inventory checklist. (See Deposits and Checklists)
What A Rental Agreement Should Not Include (see Evictions)
The Legislature has passed the “Truth in Renting” law which makes it illegal for a lease to contain clauses that infringe on a tenant’s rights. This law requires that all rental leases shall:
- not include a provision which excludes or discriminates against the tenant;
- not include waivers or any alterations of a party’s right with respect to possession or eviction proceedings provided in the laws governing forcible and unlawful ejectment and summary proceedings to recover possession;
- not provide for a confession of judgment by a party; that is, require a party to give up the right to certain legal options in advance;
- not include any provision which relieves the landlord from liability for the landlord’s failure to perform a duty or for negligent performance of a duty imposed by law (however, the landlord’s liability could be waived to the extent a tenant was able to recover under a certain type of insurance policy for loss, damage, or injury caused by fire or other casualty);
- not include waivers or alterations of a party’s right to demand a trial by jury or any other right of notice or procedure required by law;
- not provide that a party be liable for legal costs or attorney’s fees incurred by another party in excess of costs or fees specifically permitted by statute;
- not provide for the acquisition by the lessor (party leasing the property) of a security interest in any personal property of the tenant to assure payments of rent or other charges except as specifically permitted by statute;
- not include any provision which accelerates rental payment if a breach of the lease occurs, unless the amount is determined by court;
- not include a provision that releases a party from a duty to mitigate damages;
- not require a tenant to pay rent or accept premises when the premises are in a condition which violates acceptable conditions established by law; and
- not include any provision that waives tenant’s rights regarding security deposits.’
Landlords have 20 days to correct any illegal clauses brought to their attention by tenants. If not corrected by then, tenants can bring action to void the lease to prohibit the landlord from including the clause in future leases, and to recover damages of $500 or actual damages, whichever is greater. Rental leases must comply with the Security Deposit Act, the Consumer Protection Act, the Michigan Civil Rights Act, the Handicappers’ Civil Rights Act, and the Truth in Renting Act.
Rights and Responsibilities
(Based on Public Act No. 42 of 1917 and Public Act No. 219 of 1931)
The landlord has a right to receive rent on time, to expect that the property will not be damaged or wasted or used for illegal purposes, and to receive payment for damages from the tenant at the end of the lease. The landlord has the right to expect the tenant will not bother others and will abide by the responsibilities under the lease agreement.
The landlord also has maintenance rights. This includes access to the unit to inspect and repair at reasonable intervals (with notice to the tenants) and at times of emergency. In addition, the landlord has recourse to court procedures to evict and sue tenants who cause damage to the property through action or neglect.
On the other hand, the landlord has maintenance responsibilities. The landlord must provide a safe and habitable dwelling, comply with state and local laws, and carry out repairs that are not the fault of the tenant. (See Maintenance.) The landlord is also required to return the unused portion of the security deposit. The landlord’s specific duties and responsibilities are a very important and basic part of a lease. Before entering into either a written or oral lease, these rights and responsibilities should be clearly understood by both parties.
It should also be noted that in terms of insurance, the landlord generally will carry fire, liability, and, if necessary, flood protection on the land and structures. That insurance may not cover the tenant, so the tenant should find out the extent of the landlord’s coverage and make arrangements with him to be notified in the event there is a change in insurance coverage that would affect the tenant. Tenant would also be wise to explore the purchase of a renter’s policy to protect personal possessions from theft, damage, or loss. Renter’s policies are readily available through most area insurance agencies.
The tenant has the right to “quiet enjoyment” of the rented premises, that the premises will be kept in repair, to receive a written eviction notice as provided by law, to the return of the unused portion of the security deposit, and to expect that the landlord will discharge the responsibilities contained in the lease agreement. Also, the tenant has the right to remain in the rental unit if the landlord sells it. This holds until the expiration of the lease agreement. If the new landlord wants the tenant to vacate the rental unit before the end of the lease period, the legal process of eviction must still be used. (See Evictions)
A tenant generally is expected to make timely rent payments and other agreed-upon payments (i.e., utility bills), to keep the property in good condition, and not to engage in actions that are illegal or bothersome to the others around. Again, the written or oral lease will usually contain the tenant’s specific duties and responsibilities. Also, the tenant is required to inform the landlord of necessary repairs.
If the landlord fails to refund the security deposit or submit a list of damages within 30 days of the end of the tenancy, the tenant has a right, after 45 days, to sue the landlord for double the amount of the security deposit. If the landlord returns none or only a portion of the security deposit within 30 days, and the tenant feels that this is unreasonable, the tenant must inform the landlord of this within 7 days of hearing from the landlord.
Deposits and Checklists
(Based on Public Act No. 348 of 1972.)
In 1972, the Michigan Legislature passed a law that regulates security deposits. The law sets forth the procedures governing the collection, management, and return of security deposits. A security deposit is a deposit, in any amount, paid by the tenant to the landlord or an agent to be held for the term of the rental agreement, or any part thereof, and includes any required prepayment of rent other than the first full rental period of the lease agreement; any sum required to be paid as rent in any rental period in excess of the average rent for the term; and any other amount of money or property returnable to the tenant on condition of return of the rental unit by the tenant in conditions as required by the rental agreement. “Security deposit” does not include an amount paid for an option to purchase, unless it is shown the intent was to evade this act, nor does it include paramount paid as a subscription for or purchase of a membership in a cooperative housing association that provides dwelling units to its members.
Always remember that first, the tenant has a right to the security deposit when he/she moves from the rental unit if the tenant (1) does not owe the landlord any money; (2) does not owe for utilities; and (3) leaves the rental unit in the same condition, excluding normal wear and tear, as when the tenant moved in. Security deposits are considered the tenant’s property until the landlord proves in court that money is due him.
Second, a security deposit includes any money the tenant gives the landlord beyond the first month’s rent (except for specifically stated nonrefundable fees), whether or not the landlord defines that money as a security deposit. State law puts a limit on how much a landlord may collect for a security deposit, but some landlords attempt to circumvent that law by giving deposits other names. This is why the definition of a security deposit must be understood.
Third, the Michigan security deposit law is quite specific about the procedures governing deposits, and it is important that you follow all of them closely. This law assigns tenant and landlord responsibilities the moment the lease is signed or a unit is occupied; knowing and following the procedures from the start prevents misunderstanding.
The Ins and Outs
Landlords and tenants are given rights and responsibilities in the security deposit law. Below is a list for both parties.
- May require a security deposit that may not be greater than 1 1/2 month’s rent.
- Must notify tenant in writing and within 14 days after the tenant’s occupancy, of his/her address, where the security deposit is being held, and of the tenant’s duty to supply a forwarding address, in writing, within four days after vacancy. This is often included in the body of the lease.
- Can use the security deposit for the duration of the lease if he posts a surety bond with the Secretary of State.
- Must give two blank tenant inventory checklist forms at the beginning of occupancy and must fill one out at the end of occupancy.
- Must return unused portion of security deposit within 30 days after the tenant moves out and inform the tenant that he/she must respond to the landlord’s list of damages within seven days after receiving it.
- Must take the tenant to court within 45 days of the end of occupancy to collect any disputed portion of the security deposit.
- Is entitled to part or all of the amount of the deposit if the tenant has failed to pay rent or utility bills, or has failed to fully vacate the premises.
- Must complete an inventory checklist at the start of occupancy (within seven days of moving in).
- Must give the landlord a forwarding address within 4 days after moving out. If the tenant does not do this, the right to an itemized list of damages from the landlord is forfeited. However, this is only effective if the landlord has informed the tenant of this requirement in writing.
- Has a right to a refund of the security deposit if the landlord does not send a list of damages within 30 days and does not take the case to court within 45 days of the end of occupancy.
This completes the list of important factors for security deposits. But not all deposits required by a landlord are refundable. Some are not required by law. For example, a cleaning deposit may be required. It is a sum of money paid by the tenant and used by the landlord for the cleaning of the premises after the tenant moves out. If such a deposit is required, the amount and terms and conditions for its use should be included in the lease. Nonrefundable deposits must be in writing. Other nonrefundable deposits include “key,” “carpet,” and “drape,” deposits.
Upon receiving possession of the rented premises, the landlord must also furnish the tenant with two blank copies of a commencement inventory checklist including all the items in the rental unit owned by the landlord, as mentioned above. Within seven days the tenant should review the checklist by noting the condition of the landlord’s property and return one copy to the landlord. The tenant has a right to request and receive a copy of the termination checklist (also mentioned above), showing the claims chargeable to the last prior tenants. At the end of the occupancy, the landlord should complete a termination inventory checklist of damages that were caused by the tenant. This procedure will protect both the landlord and the tenant.
How To Get Your Security Deposit Back
Remember, within four days of moving out of the rental unit the tenant must advise the landlord in writing of a forwarding address. Within 30 days after the tenant has moved, the landlord must mail to the tenant’s new address an itemized list of damages claimed against the tenant’s security deposit. At the same time, the landlord must list the estimated cost of repair for each damaged item, the amounts and basis on which the tenant is assessed, and enclose a check or money order for the difference between damages claimed and the amount of the security deposit held by the landlord. It is important that both landlord and tenant perform their duties within the allotted time. Public Act No. 348 of 1972 is a guide to when and how each party should perform. Failure to comply may result in the loss of a claim to the security deposit. If the landlord and tenant do not agree on damage charges within 45 days after termination of the occupancy, the landlord must sue the tenant and secure a court judgment covering damage charges in order to rightfully retain any portion of the security deposit. (See Legal Questions.)
(Based on Public Act No. 42 of 1917)
What if a landlord wants a tenant to leave the rental unit at some point in time? How can a landlord do that? By one of two methods. One, the landlord and tenant mutually agree to terminate the rental arrangement. Two, the landlord evicts the tenant. Eviction is the process used by a landlord to remove a tenant from the rented premises with or without the consent of the tenant. The landlord may want the tenant evicted if the tenant’s conduct includes any of the following:
- nonpayment of rent;
- damage to property;
- causing a “serious and continuing” health hazard;
- engaging in illegal activities;
- violation of the terms of the rental agreement (lease);
- failure to vacate the premises after the lease expires; and
- failure to vacate the premises after the landlord has given timely notice to terminate the lease.
Evictions Under A Seven-Day Notice To Quit
If a tenant is renting under either a fixed-term or a periodic tenancy and the landlord wishes to evict for reasons 1, 2, 3, or 5 above, it may be done with a seven-day notice to quit. This is a type of eviction notice that gives you seven days to either correct the situation or move.
Example: The rent is due May 1, but the tenant doesn’t make the payment. On May 2, the tenant receives a written notice to move out due to nonpayment of rent. On May 9, the landlord can file for a court hearing to evict the tenant if the rent is still unpaid.
Note: Regarding damage to the property or presence of a serious and continuing health hazard, if there is a major violation of the local or state housing or zoning codes, the city may condemn a structure. Such action would force the tenants to vacate, but if the violation was not caused by them, they would be allowed to sue for money damages (i.e., moving expenses or temporary shelter).
There are other eviction notices such as notice of termination of tenancy for reason 7 above. A tenant who rents under a periodic tenancy can be evicted for any of the above reasons as long as it is not retaliatory or discriminatory. The notice must be in writing and give the tenant at least one rental period’s time.
Example: On May 1 the landlord gives a tenant written notice to vacate. The notice states that the tenant is to leave by June 1. This is a proper notice because it includes a full month.
Keep in mind that in each of the above situations, a tenant has a right to a court hearing before any actual eviction takes place. A judge or a jury decides if the tenant must move, not the landlord.
Remember that an eviction notice must include the tenant’s name and the address or description of the premises, the reason for the demand (Note: A notice of termination of tenancy need not state a reason), a date and the landlord’s signature.
The following should also be noted:
- Tenants are entitled to a written notice of eviction, served properly;
- Tenants are not required to move when the eviction notice expires. Expiration of the notice only enables the landlord to file for a court hearing;
- When a summons is received, keep it and show up in court on time. If the tenant does not go to the hearing, he/she will probably lose the case automatically;
- If you lose the case, you can appeal the decision;
- Only a bailiff with a court order can eject a tenant. Actual eviction can only occur when a writ of restitution is obtained by the landlord and after the landlord has won the court hearing and the appeal period expires; and
- You have legal recourse to an illegal eviction. Consult an attorney or housing counselor for assistance. (See Appendix for sample letter to landlord on eviction attempt.
There is one final eviction that the tenant should be aware of…”self-help” eviction. It’s an attempt by the landlord to remove a tenant from the rented premises without benefit of the legal eviction process. Public Act No. 300 of 1976 prohibits this type of eviction. The four most common forms are (1) turning off utilities; (2) changing the locks on the doors; (3) putting the tenant’s possessions out of the rented premises; and (4) removing the tenant’s possessions to another location. Eviction is a legal process. Unless you are absolutely positive that you know what you are doing, consult an attorney. There is no substitute for good legal advice, and that is what is needed as soon as the process begins.
- Landlord provides a seven-day notice to quit.
- After seven days, the landlord may file a complaint with the district court, whereupon the court shall deliver or mail to the tenant a summons to appear before the court on a certain date.
- At the court hearing, if the tenant wins, the tenancy continues. If the tenant loses, he or she has ten days to pay the rent past due, settle the dispute, or vacate the premises.
- After ten days, if the tenant has not vacated, a writ of restitution is issued by the court commanding the sheriff or other authorized court officer to serve the process and restore the plaintiff to full possession of the premises.
Maintenance – What To Do If The Landlord Won’t Fix It
(Based an Public Act No. 42 of 1917)
Maintenance problems range from things that are merely annoying to things that pose an immediate threat to health and safety. However, it should be noted that both landlord and tenant have some maintenance responsibilities. A tenant is generally expected to pay rent on time, keep the rented premises in a safe and sanitary condition, promptly notify the landlord of maintenance problems, exterminate insects that appear if they were not there when the tenant moved in, and leave the rented premises in good condition (normal wear and tear excepted). These responsibilities can be modified in certain instances, as noted above, by mutual agreement of the landlord and the tenant.
There are three types of maintenance problems: (1) emergencies, (2) major problems, and (3) minor problems. Emergencies are situations that require action within 24 hours, and pose an immediate threat to the health and safety of the household. Examples include leaking gas, flooding, major roof damage, or a defective furnace.
Major problems are problems that affect the quality of the residential environment, but not to the degree that the life of the occupant is immediately endangered. Examples are a defective water heater, clogged drain, or heating problems in part of a house.
Minor problems fall into the nuisance category and include defective lighting, locks, faucets, household pests, and peeling paint.
In solving these or any maintenance problem, the first step is to talk to your landlord. Explain the situation, the importance of its repair, and when you would like it done. The state and cities have enacted housing codes to protect the rights of both landlords and tenants. Each city has its own specific codes which may be checked by going to your local city hall.
The second step is to write a letter to the landlord about the problem and mention the previous talk, and that you will take action if there are any more delays. Have it certified and keep a copy. It is important to keep track of all your phone calls and conversations with your landlord or a building inspector. You may want to have a building inspector sent to your home for inspection, if so—-note the date.
The third step should be to take action only after (1) you have documented the problems; (2) you’ve given the landlord time to repair; and (3) the landlord has failed to act. Keep any receipts and note the dates of all conversations regarding the problems. Keep all broken parts and if you feel it’s necessary, call the building inspector to come out. Withholding your rent is a right under Michigan law when the landlord fails to maintain your home. Put the money into a separate savings account, depositing it with a check including a memo of purpose for your records. This should be done before rent is due. Then send a letter to your landlord when rent is due stating why you are withholding rent and that you will release the amount when the maintenance problems have been corrected. Again, this letter should be sent by certified mail with a return receipt requested and a copy kept.
Your next option is to pay for repairs yourself and then deduct the cost from your rent. The money may even be drawn from the savings account. Before you allow any repair work to be done, call at least three companies for estimates (if a do-it-yourself job, go to three stores for prices of parts). Reputable firms will come to your home and give you a free written estimate. Then mail these estimates to your landlord stating you will pay for the repairs out of your withheld rent. Set a date for the landlord to fix the problem. Then state that you will have the problem taken care of if he does not act by this time. Again, make a copy of all letters and estimates for your records.
The last step is to hire the lowest bidder and pay for the work yourself if the landlord still does not respond. Send the landlord a copy of the receipt along with a letter stating that you are deducting the amount from your rent or that you used withheld rent to pay for repairs. Then wait for the landlord’s response.
The landlord may try and have you evicted. Your defense in an eviction is that your landlord has not lived up to the legal duty to keep your home in good shape. Make sure you can prove it. Your landlord has mortgages, taxes, and bills to pay; by using the options listed above, you can put pressure on the landlord to negotiate. Keep in mind that evictions take your landlord’s time (at least 3 weeks) and money, while the landlord’s bills keep piling up. If you document carefully, you have a good chance of winning an eviction.
A maintenance agreement is a timetable for your landlord to make repairs. Be sure that it is in writing, that you and your landlord have signed and dated it, and that you have a copy. Before you sit down to talk with your landlord, you should think about how long you will wait for repairs, and whether to release rent (if you are withholding) after the repairs are made. A problem that can occur regarding repairs is that both parties will become so irritated at each other that after the dispute is resolved, it is impossible for them to continue to discharge lease obligations without expressing considerable hostility toward each other. If the repair problems become too critical, it is entirely possible that the eviction process, lawsuits, counter lawsuits and vindictive incidents could occur. Both parties should remember that in many landlord/tenant disputes the basic issues become obscured by personal disagreements that develop and continue to grow and fester. Unless both parties understand and remember that the purpose of the lease is to record mutual agreement, and that there is a direct relationship between rights and responsibilities, the lease is doomed to failure. Substituting petty arguments for a basic desire to make a lease work is the surest way to an unhappy situation that can result in legal disagreements, unnecessary financial expenses, and an unpleasant experience for all.
Emergencies: Serious and Common Type
(Based an Public Act No. 42 of 1917)
Emergencies of the less serious type, like one where the tenant has been given timely notice and then finds it impossible to vacate the rental unit by the date specified, are the most common. See the landlord immediately if that happens. The rental unit may have been rented to another party. A tenant has no automatic right to remain in the rental unit beyond the last day of the rental period. The only way a tenant can “hold over” into the next rental period is with the permission of the landlord. Be sure both parties understand and agree upon what the cost is to “hold over.” Remember, the last agreement was rental of the unit for a specific period of time, for example, one month, and the tenant may not want to end up paying a full month’s rent for one or two days’ occupancy of the former housing.
The other type of emergency situation arises when the tenant’s health or safety is threatened. The tenant may have to move to temporary housing and immediately notify the landlord. If repairs are not made in a reasonable period of time, the tenant may wish to consider deducting expenses from the rent payment or a lawsuit. Save receipts for expenses as it may be necessary to prove costs in a legal proceeding.
Subleasing occurs when a tenant permits another party to lease from him/her the premises the tenant has leased from the landlord. The tenant thus assumes the position of being landlord in relation to his/her subtenants. Subleasing usually occurs because the tenant has signed a fixed-term tenancy lease and wants, for a variety of reasons, to get out of it before it expires. To avoid the financial burden of the unexpired portion of the lease, the tenant tries to find a subtenant who will assume that burden.
A tenant considering subleasing should realize that his/her lease agreement will permit a sublease unless it specifically prohibits subleasing, that the subtenant assumes only the duties and rights enjoyed by the tenant, that the tenant is still responsible to the landlord for performance of the lease agreement, and the tenant, in relation to the subtenant, assumes the responsibilities of a landlord and must, therefore, follow all the rules and laws applying to landlords including the security deposit law.
When a subtenant leases from a tenant the subtenant will receive only the rights and obligations of the tenant unless the subtenant and the tenant agree to the subtenant taking something less than all of the tenant’s rights and responsibilities. Please note that the subtenant cannot receive more rights and responsibilities than the tenant enjoys in relationship to the tenant’s landlord because the tenant cannot sell to the subtenant rights and responsibilities that were never possessed in the first place.
Example: The tenant subleases the last three months of a fixed-term tenancy to a subtenant. At the end of the three months the tenant’s landlord refuses to renew the lease and insists that the subtenant move out. The subtenant is required to move because the tenant was only entitled to three more months’ occupancy of the premises.
The tenant may also want to consider the following before subleasing:
Example: If subtenants fail to pay the rent, the original landlord can hold you responsible for missed rent payments. This amount can be withheld from your security deposit, as can charges for physical damages done by the subtenants.
Two things may be done to protect against this: (1) require the subtenants to sign a written agreement that includes everything in your contract with the landlord; and (2) require a security deposit from the subtenants.
The tenant should also understand what assuming the role of landlord means. For instance, if you require security deposits from the subtenants, the provisions of the security deposit law (including providing inventory checklists and placing the deposit in a financial institution) must be followed. (See Deposits And Checklists for more information). Also, if you want to evict the subtenants, you must use legal eviction procedures. (See Evictions). In addition, if landlords must register with a city housing department, sublessors may also have to do so. As an example, usually the person who sublets for more than a specified period of time qualifies as a landlord and must register with the city. To see if you qualify, check with your city housing department.
Subleasing can be a complicated procedure, particularly if you are planning on leaving the area for the period of the sublease. If so, you might try to get your landlord to sign a new contract with the persons who are interested in subletting. If your landlord agrees (this is often the case), and agrees to terminate your rental contract, your responsibilities end when your occupancy ends.
If you permit the subtenants to pay rent directly to the landlord, you run the risk of not knowing if the subtenants are continuing to meet their rental obligations. When the subtenants are required to pay rent directly to you, with you paying the usual rent to the landlord, there is much less risk.
Remember, if you should decide to just move out without subleasing, your landlord can hold you liable for rent due until the end of your agreed-upon occupancy. In a fixed-term lease, you can be held responsible for rent due until the specified ending date; in a periodic tenancy, you can be held responsible for rent due until the required notice period for termination has expired. The landlord, on the other hand, is supposed to make a “reasonable” effort to re-rent the place. If he is unable to do this, your responsibility, as mentioned, above, to pay rent ends when the new tenants begin paying rent. However, you can be held liable for reasonable re-renting costs such as advertising or transfer fees.
If you feel an individual or a business has treated you unfairly and you believe they owe you money or satisfaction, there is something you can do about it. You can sue them in small claims court for up to $6,000. You can do it yourself without hiring a lawyer. It is advisable, however, that in any legal situation an attorney be consulted. This holds true for both landlords and tenants.
How To Sue Someone In Small Claims Court
You can bring a lawsuit against anyone you believe owes you money. You simply tell why you feel that someone owes you money and the person or business you are suing tells their side of the case. After the judge has heard both sides, he/she makes a decision on who is right. If you win, the person or business you are suing has to pay you. Note the fact that neither party is allowed to have an attorney in small claims court, but if you are suing a business or corporation, they may be represented by an employee who is also an attorney. This will not put you at a disadvantage as the judge decides the case on the facts of each side not on legal tactics.
Remember, you have a right to use this court; it is not complicated. Your first step is to file a claim against the party you are suing. This is done in person in the district court office. The district court in which you file your claim depends on where the person you are suing lives or where the business is located. In some instances, the court action may be brought in the county where the transaction took place. To be sure, call the District Court’s Office (989) 731.0239. If you wish to file a case, forms are available at the District Court office for a nominal fee, or online at http://courts.mi.gov. The form is called Affidavit and Claim (dc84). The affidavit names the party you are suing, how much money you are suing for, and why.
This is also a good time to bring along any evidence you may have to back up your claim such as a bill of sale, receipt, lease, or promissory note.
The fee for filing is minimal (usually between $30 and $70). Also, try and determine whether the party you are suing has enough money to settle your claim. In most cases you can collect the money awarded you in small claims court but there are a few times when you cannot. You should check this out before you invest your time in filing a claim.
After you have filed your claim, the court will notify the person or business that you are suing that you have filed a claim against them. This is called “serving the defendant” with a summons. Both parties will then be notified of the date on which you are to be in court to present your cases. When you appear, one of two things will happen. (1) if the defendant appears, the hearing will proceed; or (2) if the defendant does not appear, the court will tell you that you can take a “default” judgment. This means that if the judge decides you have a good claim you can collect your money without a hearing since the party you are suing did not appear to fight your claim.
Your hearing date will usually be within 30 days from the time you first filed your suit. It would be wise to use this time to double-check your evidence, contact witnesses, etc.
The party you are suing has the right to ask that the case be heard in a higher court which is the general district court The court will notify you if the defendant makes such a request. In the higher court, both you and the defendant have the right to be represented by an attorney. Whoever loses the case may be asked to pay for legal expenses. Note, however, that legal expenses may not necessarily include attorney fees.
The next step, of course, is the hearing. Be there on time and properly dressed. Bring all the evidence and make sure your witnesses will be there on time.
The clerk will call your case and both parties then will appear before a judge to present their cases. When you state your claim, be sure to do so in your own words and why you think the party you are suing owes you money.
The defendant will also have an opportunity to present his side of the case. Listen to him carefully. Make sure all the facts of the case are presented to the judge fairly and completely. The judge wants to hear all the facts before making his decision. His decision is final and the case may not be taken to a higher court by either party. In some instances, however, a petition by either party may be used to persuade the same judge to reopen the case in small claims division.
When and if the judge decides in your favor, that means the court agrees with you that the person or business you are suing owes you money. You must be paid the amount specified by the judge plus the amount of court costs.
If the defendant refuses to pay according to the settlement, you can make him pay legally by having his wages or bank account garnished. If garnishment is necessary, you must go back to court and file more papers.
When you have collected your money, you will be finished with the lawsuit in small claims division of district court.
Points To Remember
- Do not be afraid to go to court. If you feel your claim is valid and it cannot be settled in any other manner, take them to court;
- You do not need a lawyer to file and carry through a small claim for $6,000 or less in the small claims division of district court.
- If you win your case, the defendant is legally bound to pay you.
- You may sue in a civil action in general civil court for up to $25,000. and both you and the person or business you are suing have the right to an attorney in municipal court.
- Small claims of district court cannot be appealed to a higher court. General civil court decisions can be appealed by either you or the defendant.
Please remember that there is a legal and proper method for a tenant or landlord to terminate a lease and/or make the landlord or tenant fulfill his/her end of the lease. If the written lease specifies a method for terminating the lease, the tenant or landlord should follow that procedure. In the absence of such a provision, the tenant should give written notice of any intent to vacate the premises. The notice should be given at the end of a rent period and should be equal in time to at least one rent period.
Note that the landlord in the lease has promised (a covenant) that all common areas are fit for the use intended (to be used as a residence), that the premises will be kept in reasonable repair, and that the premises will be kept in compliance with applicable state and local health and safety laws except when the disrepair or violation is caused by the tenant’s willful or irresponsible conduct or lack of conduct. Legally the landlord may enter the leased premises to inspect and repair at reasonable intervals, with consent of the tenant. The landlord and tenant should respect each other’s rights and cooperate because each right held by one party carries with it a responsibility.
To be safe, records should be kept. They include a copy of the lease agreement, rent receipts, cancelled checks, paid utility bills, inventory checklists, and communications including registered or certified mail receipts. If it pertains to the lease agreement and it’s written, keep it.
Be familiar with all of your obligations as a tenant, and be sure your roommates are also well-informed. Find out if your landlord’s insurance covers any of your property that may be damaged by fire, theft, or flood. Get to know your landlord and/or manager before problems arise. If you do not know who your landlord is, find out. It is in this way that landlord/tenant communication breakdowns are kept at a minimum. Hopefully, then, you will not need many of the things referenced above.
Landlord and Tenant Relationships Act 348 of 1972
AN ACT to regulate relationships between landlords and tenants relative to rental agreements for rental units; to regulate the payment, repayment, use and investment of security deposits; to provide for commencement and termination inventories of rental units; to provide for termination arrangements relative to rental units; to provide for legal remedies; and to provide penalties. History 1972, Act 348, Eff. Apr. 1, 1973
The People of the State of Michigan enact
Sec. 1. As used in this act:
(a) “Rental unit” means a structure or part thereof used as a home, residence, or sleeping unit by a single person or household unit, or any grounds, or other facilities or area promised for the use of a residential tenant and includes, but without limitation, apartment units, boarding houses, rooming houses, mobile home spaces, and single and 2-family dwellings.
(b) “Rental agreement” means all agreements which establish or modify the terms, conditions, rules, regulations, or any other provisions concerning the use and occupancy of a rental unit.
(c) “Landlord” means the owner, lessor, or sublessor of the rental unit or the property of which it is a part and, in addition, means a person authorized to exercise any aspect of the management of the premises, including a person who, directly or indirectly, acts as a rental agent, receives rent or any part thereof, other than as a bona fide purchaser, and who has no obligation to deliver the whole of such receipts to another person.
(d) “Tenant” means any person who occupies a rental unit for residential purposes with the landlord’s consent for an agreed upon consideration.
(e) “Security deposit” means a deposit, in any amount, paid by the tenant to the landlord or his or her agent to be held for the term of the rental agreement, or any part thereof, and includes any required prepayment of rent other than the first full rental period of the lease agreement; any sum required to be paid as rent in any rental period in excess of the average rent for the term; and any other amount of money or property returnable to the tenant on condition of return of the rental unit by the tenant in condition as required by the rental agreement. Security deposit does not include either of the following:
(i) An amount paid for an option to purchase, pursuant to a lease with option to purchase, unless it is shown the intent was to evade this act.
(ii) An amount paid as a subscription for or purchase of a membership in a cooperative housing association incorporated under the laws of this state. As used in this subparagraph, “cooperative housing association” means a consumer cooperative that provides dwelling units to its members. History 1972, Act 348, Eff. Apr. 1, 1973 – Am. 1984, Act 297, Imd. Eff. Dec. 21, 1984.
554.602 Security deposit; amount
Sec. 2. A landlord may require a security deposit for each rental unit. A security deposit shall be required and maintained in accordance with the terms of this act and shall not exceed 1 1/2 months’ rent. History 1972, Act 348, Eff. Apr. 1, 1973
554.603 Security deposit; notice.
Sec. 3. A landlord shall not require a security deposit unless he notifies the tenant no later than 14 days from the date a tenant assumes possession in a written instrument of the landlord’s name and address for receipt of communications under this act, the name and address of the financial institution or surety required by section 4 and the tenant’s obligation to provide in writing a forwarding mailing address to the landlord within 4 days after termination of. occupancy. The notice shall include the following statement in 12 point boldface type which is at least 4 points larger than the body of the notice or lease agreement: “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.” Failure to provide the information relieves the tenant of his obligation relative to notification of the landlord of his forwarding mailing address. History 1972, Act 348, Eff. Apr. 1, 1973
554.604 Security deposit, disposition; bond.
Sec. 4. (1) The security deposit shall be deposited in a regulated financial institution. A landlord may use the moneys so deposited for any purposes he desires if he deposits with the secretary of state a cash bond or surety bond written by a surety company licensed to do business in this state and acceptable to the attorney general to secure the entire deposits up to $50,000.00 and 25% of any amount exceeding $50,000.00. The attorney general may find a bond unacceptable based only upon reasonable criteria relating to the sufficiency of the bond, and shall notify the landlord in writing of his reasons for the unacceptability of the bond.
(2) The bond shall be for the benefit of persons making security deposits with the landlord. A person for whose benefit the bond is written or his legal representative may bring an action in the district, common pleas or municipal court where the landlord resides or does business for collection on the bond. History 1972, Act 348, Eff. Apr. 1, 1973
554.605 Security deposit as property of tenant.
Sec. 5. For the purposes of this act and any litigation arising thereunder, the security deposit is considered the lawful property of the tenant until the landlord establishes a right to the deposit or portions thereof as long as the bond provision is fulfilled, the landlord may use this fund for any purposes he desires. History 1972, Act 348, Eff. Apr. 1, 1973
554.606 Waiving requirements of act.
Sec. 6. The requirements of this act may not be waived by the parties to a rental agreement except as specifically provided herein. History 1972, Act 348, Eff. Apr. 1, 1973
554.607 Security deposit; permissible uses.
Sec. 7. A security deposit may be used only for the following purposes:
(a) Reimburse the landlord for actual damages to the rental unit or any ancillary facility that are the direct result of conduct not reasonably expected in the normal course of habitation of a dwelling.
(b) Pay the landlord for all rent in arrearage under the rental agreement, rent due for premature termination of the rental agreement by the tenant and for utility bills not paid by the tenant. History 1972, Act 348, Eff. Apr. 1, 1973
554.608 Inventory checklists.
Sec. 8. (1) The landlord shall make use of inventory checklists both at the commencement and termination of occupancy for each rental unit which detail the condition of the rental unit for which a security deposit is required.
(2) At the commencement of the lease, the landlord shall furnish the tenant 2 blank copies of a commencement inventory checklist, which form shall be identical to the form used for the termination inventory checklist. The checklist shall include all items in the rental unit owned by the landlord including, but not limited to, carpeting, draperies, appliances, windows, furniture, walls, closets, shelves, paint, doors, plumbing fixtures and electrical fixtures.
(3) Unless the landlord and tenant agree to complete their inventory checklist within a shorter period, the tenant shall review the checklist, note the condition of the property and return 1 copy of the checklist to the landlord within 7 days after receiving possession of the premises.
(4) The checklist shall contain the following notice in 12 point boldface type at the top of the first page: “You should complete this 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.”.
(5) At the termination of the occupancy, the landlord shall complete a termination inventory checklist listing all the damages he claims were caused by the tenant. History 1972, Act 348, Eff. Apr. 1, 1973
554.609 Itemized list of damages; check or money order; contents of notice of damages. Sec. 9. In case of damage to the rental unit or other obligation against the security deposit, the landlord shall mail to the tenant, within 30 days after the termination of occupancy, an itemized list of damages claimed for which the security deposit may be used as provided in section 7, including the estimated cost of repair of each property damaged item and the amounts and bases on which he intends to assess the tenant. The list shall be accompanied by a check or money order for the difference between the damages claimed and the amount of the security deposit held by the landlord and shall not include any damages that were claimed on a previous termination inventory checklist prior to the tenant’s occupancy of the rental unit. The notice of damages shall include the following statement in 12 point boldface type which shall be at least 4 points larger than the body of the notice: “You must respond to this notice by mail within 7 days after receipt of same, otherwise you will forfeit the amount claimed for damages. History 1972, Act 348, Eff. Apr. 1, 1973
554.610 Effect of noncompliance with notice of damages requirement Sec. 10. Failure by the landlord to comply with the notice of damages requirement within the 30 days after the termination of occupancy, constitutes agreement by the landlord that no damages are due and he shall remit to the tenant immediately the full security deposit. History 1972, Act 348, Eff. Apr. 1, 1973
554.611 Notice of forwarding address; effect of noncompliance. Sec. 11. The tenant shall notify the landlord in writing at the address given under section 4 within 4 days after termination of his occupancy of an address at which communications pursuant to this act may be received. Failure to comply with this requirement relieves the landlord of the requirement of notice of damages but does not prejudice a tenant’s subsequent claim for the security deposit. History 1972, Act 348, Eff. Apr. 1, 1973
554.612 Response to notice of damages. Sec. 12. If a landlord claims damages to a rental unit and gives notice of damages as required, the tenant upon receipt of the list of damages shall respond by ordinary mail to the address provided by the landlord as required by section 3 within 7 days, indicating in detail his agreement or disagreement to the damage charges listed. For the purposes of this section the date of mailing shall be considered the date of the tenant’s response. History 1972, Act 348, Eff. Apr. 1, 1973
554.613 Action for damages; retention of security deposit; waiver. Sec. 13. (1) Within 45 days after termination of the occupancy and not thereafter the landlord may commence an action in a court of competent jurisdiction for a money judgment for damages which he has claimed or in lieu thereof return the balance of the security deposit held by him to the tenant or any amount mutually agreed upon in writing by the parties. A landlord shall not be entitled to retain any portion of a security deposit for damages claimed unless he has first obtained a money judgment for the disputed amount or filed with the court satisfactory proof of an inability to obtain service on the tenant or unless:
- (a) The tenant has failed to provide a forwarding address as required by section 11.
- (b) The tenant has failed to respond to the notice of damages as required by section 12.
- (c) The parties have agreed in writing to the disposition of the balance of the deposit claimed by the landlord.
- (d) The amount claimed is entirely based upon accrued and unpaid rent equal to the actual rent for any full rental period or portion thereof during which the tenant has had actual or constructive possession of the premises.
- (2) This section does not prejudice a landlord’s right to retain any security deposit funds as satisfaction or partial satisfaction of a money judgment obtained pursuant to summary proceedings filed pursuant to chapter 57 of Act No.236 of the Public Acts of 1961, as amended, being sections 600.5701 to 600.5759 of the Compiled Laws of 1948 or other proceedings at law. Failure of the landlord to comply fully with this section constitutes waiver of all claimed damages and makes him liable to the tenant for double the amount of the security deposit retained. History 1972, Act 348, Eff. Apr. 1, 1973
554.614 Termination of landlord’s interest; liability for security deposit. Sec. 14. Upon termination of a landlord’s interest in a rental unit whether by sale, assignment, death, appointment of receiver or otherwise, the landlord or his agent is liable with respect to the security deposit, until the occurrence of any of the following:
- (a) Transfer of the deposit to the landlord’s successor in interest and written notification to the tenant by ordinary mail of the transfer and of the successor’s name and address.
- (b) Compliance with section 4 by the successor in interest.
- (c) Return of the security deposit to the tenant. History 1972, Act 348, Eff. Apr. 1, 1973
554.615 Action to enforce act. Sec. 15. The attorney general or any affected individual may bring an action to enforce this act in a court of competent jurisdiction in the county where the defendant resides or does business. History 1972, Act 348, Eff. Apr. 1, 1973
554.616 Effective date and applicability of act Sec. 16. This act takes effect April 1, 1973 and applies only to security deposits held pursuant to leases entered into, renewed or renegotiated after April 1, 1973. History 1972, Act 348, Eff. Apr. 1, 1973
Some forms have been prepared and approved by the Michigan State Court Administrator’s Office and are available, at a nominal fee, from local district courts, various landlord or tenant associations or online at http://courts.mi.gov.