Can landlords charge non-refundable security deposits?
This rental guidance was reviewed by the Tenants & Landlords Intelligence Team, specializing in lease agreements, notices, rent disputes, deposits, evictions, and tenant-landlord operational procedures.
Understanding Security Deposits in Michigan: Can Landlords Charge Non-Refundable Deposits?
In Michigan, tenants often wonder about the rules surrounding security deposits, especially whether landlords can charge non-refundable security deposits. This guide clarifies the regulations and best practices related to security deposits under Michigan law, helping tenants understand their rights and what to expect when renting.
What Is a Security Deposit?
A security deposit is an amount of money a landlord requires from a tenant before moving in. It serves as financial protection for the landlord against potential damages beyond normal wear and tear, unpaid rent, or other lease violations.
Can Landlords Charge Non-Refundable Security Deposits in Michigan?
The short answer is: Michigan law generally requires security deposits to be refundable, and landlords cannot simply label a security deposit as “non-refundable” to avoid returning it under legitimate conditions.
Key points to understand:
- Security Deposits must be refundable: Michigan’s landlord-tenant laws treat security deposits as refundable funds intended to cover damages, unpaid rent, or other costs at the end of tenancy. Labeling a deposit as “non-refundable” does not exempt the landlord from this.
- Advance rent and non-refundable fees: While traditional security deposits cannot be non-refundable, landlords can charge other types of fees such as application fees, pet fees, or cleaning fees that are non-refundable, so long as these are clearly outlined in the lease agreement.
- Written lease agreements: Any fees, deposits, or charges must be clearly stated in the lease to be enforceable.
Michigan Security Deposit Regulations
Michigan’s security deposit regulations are governed primarily by the Michigan Security Deposit Act (MCL 554.601 et seq.) and related landlord-tenant statutes.
Maximum Amount Landlords Can Charge
- A landlord can charge up to one and a half months’ rent for a security deposit.
Returning the Security Deposit
- Landlords must return the portion of the security deposit that is not withheld for damages or unpaid rent within 30 days after the tenant moves out and the landlord receives possession.
- The landlord must provide a written itemized list of damages and the amounts withheld from the deposit.
- If the landlord fails to return the deposit or provide an itemized list, tenants may have legal recourse.
Use of the Deposit
- The deposit can only be withheld for:
- Normal wear and tear—such as minor scuff marks or carpet wear—is generally not chargeable against the deposit.
Non-Refundable Fees vs. Security Deposits
Non-refundable fees are distinct from security deposits and can include:
- Application fees: Charged to cover processing tenant applications; cannot be applied toward rent or deposit.
- Pet fees: Non-refundable fees associated with keeping pets in rental units.
- Cleaning fees: Sometimes charged but more often this is covered by the security deposit unless explicitly stated as a non-refundable fee in the lease.
What Tenants Should Do
If you are a tenant in Michigan and your landlord:
- Charges a non-refundable security deposit purporting to be damage or rent protection, you can request written clarification and documentation.
- Fails to return a refundable security deposit after tenancy ends, demand a written itemized statement of deductions.
- Needs to ensure that you understand the fees and deposits upfront, ask for everything in writing before signing your lease.
Sample Questions Tenants Can Ask Landlords About Deposits
- Is the security deposit refundable in whole or in part?
- Are there any non-refundable fees? If so, what are they for?
- What conditions will lead to deductions from the security deposit?
- What is the expected timeline for the return of the deposit after move-out?
Summary
In Michigan:
- Security deposits must be refundable and are limited to no more than one and a half months’ rent.
- Landlords cannot simply impose non-refundable security deposits.
- Non-refundable fees are allowed only if clearly specified and for purposes other than traditional security deposit use.
- Tenants have the right to a timely, itemized return of their security deposit minus lawful deductions.
For more detailed information, Michigan tenants may consider consulting resources provided by the Michigan Department of Licensing and Regulatory Affairs (LARA) or seeking legal advice when disputes occur.