Landlord-Tenant Eviction: Process Handling the Security Deposit Post-Vacancy

Disclaimer: some of what you read in this blog will be frustrating to learn, but it is crucial that the harsh reality of Michigan law is expressed.

We field frequent calls from landlords who were unaware of the specific laws that govern how they need to process security deposits after a tenant vacates their unit. The unfortunate result of not following the stepped requirements of Michigan law—more specifically, the Landlord Tenant Relationships Act 348 of 1972—often results in a virtual automatic award of double the amount of the deposit in damages, even when the landlord had an otherwise lawful right to withhold some, if not all, of the deposit.

Consequently, it is important to know exactly what needs to be done to comply with the associate laws and in what timeframes those activities must occur.

Compliance for Security Deposit Laws

First, let’s step back to pre-vacancy necessities. Please thoroughly review your lease to ensure that you are disclaiming to your tenant where the security deposit will be held; name and branch location of the bank are ideal.
Next, please make sure that you include in the necessary font size and bolding that the forwarding address must be provided to you within 4 days of the tenant vacating the premises. We are happy to help conduct a lease review to verify that your lease is fully compliant.

Timing your Notice of Damages

Now that we are confident that your lease is compliant with the associated security deposit laws, it is important that you know how long you have to provide a notice of damages. If the tenant, provides the forwarding address within the required 4 days, then you MUST provide a compliant notice of damages within 30 days of them vacating the unit. And, this notice of damages MUST include a statement that they have 7 days to object to the notice of damages in a particular font size and bolding. Our lease package review includes us providing you with a compliant notice of damages that you can use with all tenants moving forward.

If the tenant does not provide you with a forwarding address, we still recommend sending the notice of damages to the last known address: the address of the subject unit. You will likely hear us say on occasion that we recommend keeping your side of the street as clean as possible, and such a practice fits that bill.

Damage Disputes and Other Options

If the tenant disputes the damages within the allotted 7 days, then you MUST sue them to retain the deposit. And, you must sue them WITHIN 45 DAYS of them vacating the unit. We understand, this provision of the law does not comport with common sense. I am sure this does not come as a surprise to any of you seasoned landlords who have found common sense lacking at times in our landlord-tenant legal arena.

If the tenant does not object to the notice within the allotted 7 days, then you are relieved from the requirement that you sue them to retain the deposit. You still may end up suing them if the damages exceed the deposit, but it is no longer a legal requirement to retain those funds.

As an alternative to suit, you can certainly negotiate a settlement for some number in between what you are claiming and what they are disputing. We often help clients walk through the process for a less financially painful result; even though, we understand that can be a tough pill to swallow at times.

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