A Guide To Michigan Lease Agreements [+Free Template]

The key to maintaining a harmonious landlord-tenant relationship and preventing disputes is to have clear guidelines in place. And that’s what lease agreements are for.

A lease agreement is a legally binding document that details the rights and responsibilities of landlords and tenants throughout the rental period. Landlords in Michigan must ensure their lease agreements comply with state and federal laws, including required clauses and disclosures.

This guide explores the essential components of Michigan lease agreements, referencing relevant state laws. We also provide resources such as templates to streamline the leasing process.

Related Article: Michigan Landlord Tenant Laws

Essential Lease Clauses

To ensure a valid and legally sound rental agreement in Michigan, certain key elements must be included. 

Here are essential lease clauses Michigan landlords should incorporate into their residential leases:

• Parties Involved: Identify all parties, including the landlord and tenant(s). Listing property managers or leasing agents ensures all involved are bound by the agreement.
• Property Description: Provide a detailed address and specify the exact rental unit. This eliminates ambiguity about the leased premises.
• Lease Term: State the lease duration (fixed-term or month-to-month). Note that Michigan law requires leases exceeding one year to be in writing.
• Rent and Payment: Specify the rent amount, due date, and acceptable payment methods. Detail any late fee policies.
• Security Deposit: Include the security deposit amount, which cannot exceed 1.5 times the monthly rent. Outline the conditions for its return and the timeframe (typically 30 days) for refunding the deposit with an itemized deduction list, if applicable.
• Maintenance and Repairs: Define responsibilities for property upkeep, aligning with Michigan's implied warranty of habitability. Detail how tenants should report repair needs.
• Property Rules: Outline rules regarding pets, noise levels, smoking, or other restrictions. Ensure these rules comply with fair housing laws to prevent discrimination.
• Termination/Renewal: Describe conditions for lease termination or renewal, including required notice periods for both landlords and tenants. Specify procedures that a landlord can take if a tenant fails to pay rent or violates any lease term.

Required Disclosures in a Michigan Lease Agreement

To ensure transparency and legal compliance, Michigan landlords must include specific disclosures in their lease agreements. 

Here's a summary of what Michigan landlords must disclose to their tenants:

Truth in Renting Act

Michigan law mandates that all leases include a specific statement about tenant rights under the Truth in Renting Act. This notice, which must be in at least 12-point font, informs tenants that Michigan law establishes rights and obligations for rental agreements, advising them to seek legal assistance if needed. 

The exact wording is: "NOTICE: Michigan law establishes rights and obligations for parties to rental agreements. This agreement is required to comply with the Truth in Renting Act. If you have a question about the interpretation or legality of a provision of this agreement, you may want to seek assistance from a lawyer or other qualified person".

Landlord Identity

Landlords must provide their names and addresses to tenants in writing, ensuring clear communication channels. If an agent is managing the property, their contact information must also be disclosed.

Lead-Based Paint

For properties built before 1978, landlords must disclose any known lead-based paint hazards. This includes providing an EPA-approved information pamphlet on lead poisoning prevention.

Domestic Violence Victim Rights

Leases must include a statement informing tenants of their right to terminate the lease early without penalty if they have a reasonable apprehension of present danger from domestic violence, sexual assault, or stalking, as per Michigan Comp. Laws 554.601b.

Move-in Checklist

Landlords must provide tenants with two blank copies of a move-in checklist for inspecting the property at the beginning of the tenancy. This allows tenants to document any existing damages or issues.

Other potential disclosures (check local ordinances):

• Marijuana Use Policy: Landlords should state their policy on marijuana use within the lease agreement, especially if restrictions apply.
• Non-refundable fees: It is recommended to include all non-refundable charges in the lease or rental agreement to avoid any issues with residents.
• Water contamination: Landlords must notify tenants about any known water quality issues, including contamination or pollutants that could pose health risks.
• Mold: In Michigan, landlords are obligated to inform tenants about any known mold issues within the rental property.
• Methamphetamine contamination: Landlords are required to disclose if the property has been used for manufacturing or storing methamphetamine.

Fixed-term vs. Month-to-Month Leases

Michigan landlords commonly use fixed-term and month-to-month leases, each with distinct characteristics and legal implications. Understanding these differences is vital for choosing the agreement that best suits your rental property and goals.

Here's a comparison to help you evaluate your options: 

Related Article: What Should You Choose? Annual vs Month-To-Month Leases

Security Deposit Rules in Michigan

Michigan law mandates that lease agreements clearly define security deposit terms. Both landlords and tenants must understand the legal rules surrounding security deposit collection and return.

Here's a breakdown of key security deposit regulations for Michigan leases:

• Maximum Amount: Landlords cannot charge more than 1.5 times the monthly rent as a security deposit. This limit protects tenants from excessive upfront costs.
• Collecting Security Deposits: Michigan law allows landlords to collect security deposits when the lease begins. Landlords must provide written notice within 14 days of when the tenant assumes possession, detailing specific information.
• Allowable Deductions: Landlords can deduct from a tenant’s security deposit to cover unpaid rent, damage beyond normal wear and tear, and unpaid utility bills.
• Return Timeline: Landlords have 30 days after lease termination and the tenant's provision of a forwarding address to return the security deposit or provide an itemized list of deductions. Failure to comply within this timeline may result in forfeiture of all claimed damages.
• Holding Deposits: Landlords must hold security deposits in a regulated financial institution (e.g., bank, credit union). They can use the deposit for any purpose if they deposit a cash bond or surety bond with the Secretary of State.

Rent Collection Rules in Michigan

Michigan's landlord-tenant laws outline regulations for rent collection, and it's essential to include these points in your rental agreements.

• Late Payments: Michigan law allows landlords to charge late fees if they are included in the lease agreement. Unlike some states, Michigan does not specify a maximum amount for late fees, so landlords have some flexibility, but the fee should be reasonable. It's recommended to include late fee clauses in the agreement to encourage timely payments.
• Grace Period: Michigan does not mandate a grace period. Landlords can decide whether or not to include a grace period in the lease agreement. If there is no grace period specified in the lease, a landlord can charge a late fee the day after rent is due.
• Rent Withholding: In Michigan, tenants can't simply withhold rent if they believe the landlord isn't maintaining the property. Instead, they must take legal action, such as making a court order, to be able to withhold rent.
• NSF Fees for Bounced Checks: Michigan landlords can charge a fee for bounced checks. The fee can cover any bank charges incurred by the landlord as a result of the dishonored check, in addition to the rent and any applicable late charges.

Tired of having to deal with late rent as a landlord? Try using Landlord Studio’s online rent collection tool. This platform allows tenants to automate their payments, and you’ll save time on bookkeeping with seamless, automated income tracking. 

Even better, it’s free for landlords! Each transaction carries a small fee of $2.50, which you can choose to pass along to tenants or cover yourself. And you’re always in control—set rent amounts and due dates, prevent partial payments, and easily manage late fees.

Lease Termination and Renewal

In Michigan, ending or extending a lease involves particular steps and notice periods that depend on the lease agreement type.

Lease Termination

In Michigan, tenants can end their lease by giving their landlord written notice. The required notice period depends on the lease's term. 

For a week-to-week lease, a tenant must provide at least seven days' notice before moving out. For a month-to-month lease, at least 30 days' notice is needed. If there is a yearly lease with no fixed end date, a tenant must provide a one-year notice. However, tenants aren't required to provide notice for fixed-term leases, as these expire on their last set day.

A lease may also contain an early termination clause that allows a tenant to break a lease early, typically in exchange for a penalty fee and 30 days' notice.

Reasons to send a notice to quit:

• Illegal activity
• Material health or safety violation
• Non-renewal of the lease after the rental period ends

Lease Renewal

Michigan allows leases to include automatic renewal clauses. If neither party gives notice to terminate, the lease may convert to a month-to-month arrangement. If the lease contains an auto-renewal clause but does not specify the notice period, then at least 60 days notice is required. 

Landlords typically offer lease renewals within a reasonable time frame before the current lease's expiration. The renewal offer should be formal, including the property address, tenant's name, and any changes to rent or lease terms.

Related Article: Lease Renewal and Non-Renewal of Lease Templates

Michigan Lease Agreements: Final Words

For landlords, a well-structured and legally sound lease agreement is essential for security and clarity in potential rental disputes. Therefore, they must understand both Michigan-specific and federal laws that govern rental agreements when drafting these documents.

However, we have included free Michigan lease agreement templates below to help streamline this process. These resources can help landlords comply with state regulations, while also promoting a transparent and positive rental experience for both landlords and tenants.

Download your free Michigan lease agreement template(s)

• Standard Residential Lease Agreement
• Month-to-Month Lease Agreement
• Room Rental (Roommate) Agreement
• Sublease Agreement

Michigan Landlord Tenant Laws

• Overview: Michigan Landlord Tenant Laws
• Guide To Michigan Rental Application Laws
• Michigan Tenant Screening Laws
• Michigan Security Deposit Laws
• How Much Can You Raise The Rent In Michigan?
• Michigan Eviction Laws

 Related Articles

• What is a Holdover Tenant? Definition & Holdover Tenant Legal Rights
• Lease Renewal and Non-Renewal of Lease Free Templates
• How Long Is a Short-Term Lease Agreement?
• Subletting And Sub-Lease Agreements In The USA