Michigan Real Estate Questions Answered

Q.    What provisions should be included in the lease?

A.    The Michigan Truth in Renting Act (Act 454 of 1978, MCL 554.631 to 554.641) regulates residential leases – requiring the landlord to disclose certain information.  Leases differ somewhat in terms, but a written lease agreement should include:

  1. Name and signature of the landlord;
  2. Name and signature of the tenant;
  3. Rent amount to be paid, how frequently, and when and where it is to be paid;
  4. Address of the rental property;
  5. Starting and ending dates if it is a fixed-term tenancy;
  6. Landlord’s mailing address;
  7. Amount of the security deposit, if any;
  8. Name and address of the financial institution holding the security deposit;
  9. Notice of the tenant’s obligation to provide a forwarding address to the landlord within 4 days of terminating the tenancy;
  10. Who is responsible for paying utilities;
  11. Repair and maintenance responsibilities;
  12. Eviction procedures;
  13. Any other terms and conditions that the landlord and tenant agreed to; and
  14. This statement must be provided in a prominent place in the lease, in at least 12-point font size:

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 any questions about the interpretation or legality of a provision of this agreement, you may want to seek assistance from a lawyer or other qualified person.

Note:  Two copies of an inventory checklist must be provided to the tenant when the tenant takes possession of the property.

Q.    What provisions are prohibited by law from being included in the lease?

A.    The Michigan Truth in Renting Act regulates residential leases – prohibiting certain clauses or provisions and prescribing penalties.  A provision or clause in a lease that violates the Truth in Renting Act is void.  In particular, a written lease shall not include a provision which:

  1. Waives or alters a remedy available to a party when the rental property is in a condition which violates the covenants of fitness and habitability;
  2. Waives a right established under the laws that regulate security deposits;
  3. Unlawfully excludes or discriminates against a person in violation of the laws relating to civil rights;
  4. Provides for a confession of judgment, e.g., requiring a person to give up certain legal rights in advance;
  5. 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 duty could be waived to the extent a tenant was able to recover under an insurance policy for loss, damage, or injury caused by a fire or other casualty);
  6. Waives or alters a party’s right to demand a jury trial or any other right of notice or procedure required by law;
  7. Provides that a party is liable for legal cost or attorney fees incurred by the other party in excess of costs or fees specifically permitted by statute;
  8. Provides for the landlord to take a security interest in any of the tenant’s personal property to assure payment of rent or other charges, except as specifically permitted by statute;
  9. Provides that rental payments may be accelerated if the tenant violates a lease provision unless the amount is determined by the court;
  10. Waives or alters a party’s rights with respect to possession or eviction proceedings;
  11. Releases a party from the duty to mitigate (or minimize) damages;
  12. Provides that the landlord may alter a lease provision after the lease begins without the tenant’s written consent, EXCEPT: with 30 days’ written notice, the landlord may make the following types of adjustments, as long as there is a clause in the lease allowing for the adjustments:
  • changes required by federal, state, or local law, rule, or regulation;
  • changes in rules relating to the property meant to protect health, safety, and peaceful enjoyment; and
  • changes in the amount of rental payments to cover additional costs incurred by the landlord because of increases in property taxes, increases in utilities, and increases in property insurance premiums.

13.    Violates the Consumer Protection Act (Act 331 of 1976, MCL 445.901 to 445.922), which lists 34 unfair trade practices; or 
14.    Requires the tenant to give the landlord a power of attorney.

Q.    What lawful reason(s) must be given to evict a tenant?

A.    There are nine reasons specified by law that would allow a landlord to start eviction proceedings:

  1. Nonpayment of rent;
  2. Extensive and continuing physical injury to property;
  3. Serious and continuing health hazard;
  4. Illegal drug activity and formal police report filed (lease provision must allow for termination);
  5. Violation of a lease provision and the lease allows for termination;
  6. Forceful entry OR peaceful entry, but forceful stay OR trespass;
  7. Holding over after natural expiration of lease term;
  8. “Just cause” for terminating tenant of mobile home park (“just cause” is defined for this purpose by MCL 600.5775; OR
  9. “Just cause” for terminating tenant of government-subsidized housing.

(Note:  “Just cause” is defined by statute.  See MCL 125.694a and 600.5714.)

Several of the lawful reasons describe prohibited behavior.  One reason includes, “Violation of a lease provision.”  This could be any provision agreed to by the parties when the lease is signed.  For example, it could be as silly as, “Only red cars may be parked in the driveway.”  If the tenant signed the lease, and if the tenant later buys a blue car, the tenant cannot park it in the driveway without violating a provision of the lease.  If the lease also includes a provision that allows the landlord to terminate the lease, the landlord could seek to evict the tenant on that basis.

Q.    What is the procedure to evict a tenant?

A.    The following is a brief outline of the procedure:

  • Some INCIDENT gives rise for eviction. (MCL 600.5714)
  • Notice must be given as appropriate pursuant to the following guidelines:
    • 24-HOUR NOTICE is required for the following reason: Illegal drug activity and formal police report filed (lease provision must allow for termination).
    • 7-DAY NOTICE is required for the following reasons:
      • Nonpayment of rent;
      • Extensive and continuing physical injury to property;
      • Serious and continuing health hazard.
    • 30-DAY NOTICE is required for the following reasons:
      • Violation of a lease provision and the lease allows for termination;
      • Forceful entry OR peaceful entry, but forceful stay OR trepass;
      • Holding over after natural termination of lease term;
      • “Just cause” for terminating tenant of mobile home park; OR
      • “Just cause” for terminating tenant of government-subsidized housing.
  • BEGIN THE LAWSUIT after the time period (24 hours, 7 days or 30 days) has expired if things cannot be worked out. File with the district or municipal court and serve on the tenant a Summons and Complaint. (MCL 600.5704 and 600.5735)
  • A TRIAL OR A HEARING is scheduled to be heard within 10 days. If either party appears without an attorney, but requests to retain one, the judge will generally adjourn the trial or hearing for 7 days.
  • A JUDGMENT, or decision, is rendered by the court. The Judgment will either be in favor of the landlord evicting the tenant, OR in favor of the tenant allowing the tenant to remain in possession. A money award may also be entered for damages incurred by either party. [Michigan Court Rule (MCR) 4.201(K)]
  • Within 10 days after judgment, either party may APPEAL the judge’s decision. The party appealing the judge’s decision must pay an appeal bond, filing fees, and transcript fees to preserve the appeal and stop the Order of Eviction from being issued. [MCR 4.201(N)]
  • After 10 days, an ORDER OF EVICTION may be requested, issued and executed. [MCR 4.201(L)]

Q.    What is a Purchase Agreement?

A.    The Purchase Agreement is a contract that contains a complex bundle of legal terms that outline the rights and obligations of the Buyer and the Seller. The Purchase Agreement should include the terms of the sale, the legal description of the property, the personal property included in the sale, the type of deed to be provided, the purchase of title insurance, responsibilities for payment of taxes, title insurance, contingent conditions of the sale, and any other necessary terms of the sale. The Purchase Agreement also sets forth the Buyer and Seller responsibilities that must be completed prior to the “Closing.”

Q.    What are the duties and obligations of the Seller?

A.    The Seller is required to provide the Buyer with a Seller’s Disclosure Notice. The Seller may also be required to pay “Closing costs.” In addition to these responsibilities, the Seller must adhere to any duties and obligations contained within the Purchase Agreement.

Q.    What must be completed prior to the “Closing”?

A.    At “Closing”, the final documents will be reviewed and signed by both parties, thereby legally transferring ownership to the property. There are many details of the sale that must be reviewed prior to the closing, including: the title insurance for defects in the title, the legal description of the land and deed, the settlement statement to insure all costs are properly allocated, the Bill of Sale for the proper title transfer of personal property, and many other terms of the sale.