Michigan Truth in Renting Act
If we were teaching a class entitled Michigan Landlords 101, it might start with a primer on the Michigan Truth in Renting Act (“Renting Act”). The Truth in Renting Act (Act 454 of 1978) regulates residential leases. Its three major functions include:
- requiring landlords to disclose certain information in every lease;
- guaranteeing tenants certain rights under the law; and,
- prohibiting lease provisions that attempt to waive a tenant’s guaranteed rights.
Property leases are not required to be uniform across the board. Most leases do differ from each other in varying terms. Yet, at bare minimum, a lease agreement should be in writing and include the following:
- name and signature of the landlord;
- name and signature of the tenant;
- address of the rental property;
- amount of the security deposit;
- name and address of the financial institution holding the security deposit;
- rent amount to be paid;
- frequency of rent;
- rent due date;
- where rent is to be paid;
- start and end dates of the lease (for a fixed-term tenancy);
- mailing address of landlord;
- notice of the tenant’s obligation to provide a forwarding address to the landlord within four days of terminating the tenancy;
- an explanation of who is responsible for which utilities;
- a detailing of repair and maintenance responsibilities; and,
- eviction procedures.
Any additional terms or conditions agreed to by the landlord and tenant should also be memorialized in the lease; this serves to avoid future conflicts and/or misunderstandings.
Lastly, the following statement must be provided in a prominent place in the lease, in a font that is at least 12-point in 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.
If the lease fails to contain the landlord’s name and address or the required notice, the tenant can sue to:
- void the rental agreement;
- force the landlord to include the required notice statement in all rental agreements he or she enters into; and,
- recover $500 or actual damages, whichever is greater.
This article is not intended to serve as a comprehensive manual on the Truth in Renting Act. Yet, the following highlights may serve as a guideline creating awareness of the different kinds of prohibited lease clauses. Should you have detailed concerns about a provision and whether it is disallowed by law, it might be a good idea to either work with a licensed attorney or contact RPOA directly.
Mandating Payment in Full Upon Breach
Under a fixed-term lease (typically 6 months to a year), the lease cannot require a tenant to automatically pay the entire amount of outstanding future rent payments if they break the lease early (otherwise known as rent acceleration). In the instance of an early termination, both landlord and tenant have a legal duty to mitigate the damages. The landlord should do whatever is necessary to find a new tenant, and it is in the vacating tenant’s best interests to assist the landlord in finding a new, suitable tenant. Once this process has been concluded, the landlord will likely charge the vacating tenant for rent lost during the period between tenants. This, in addition to any costs incurred (advertising, broker fees, non-routine cleaning, etc.) for having to put the property on the market.
Waiving Security Deposit Rights
A security deposit is specifically tailored to reimburse the landlord for damage to the rental unit, unpaid rent, or unpaid utility bills incurred by the tenant (utility payments that were to be made to the landlord). Security deposits are governed by Michigan law, which prohibits a lease from waiving any of a tenant’s rights under the Landlord-Tenant Act. For more information on security deposits, please see RPOA’s related article Security Deposits: What Can Be Deducted at the End of a Lease?
Requiring the Tenant to Make Repairs
Michigan law (MCL 554.139), obligates a landlord to ensure that all residential rental property is fit for the use intended by the parties. The landlord is also required by law to keep premises in reasonable repair while complying with state and local health and safety law. In general, maintaining the structural integrity of the property (the roof, plumbing, and windows) is the landlord’s sole responsibility. As for tenants, it’s their responsibility to maintain a safe and clean rental unit. Should the landlord and tenant both be agreeable, they can modify some of these obligations if the term of the lease is one year or longer.
Forcing the Tenant to Pay for Landlord Attorney Fees
A lease cannot require a tenant to pay for his/her landlord’s attorney’s fees in the event of a lawsuit. Leases are also prohibited from containing language that permits the landlord to choose the tenant’s attorney. Language that forfeits the tenant’s right to a jury trial, or requires the tenant to plead guilty in any court dispute, is also disallowed.
Automatic, Discretionary Eviction
Any conditional language that provides for automatic eviction of a tenant is prohibited by law. A landlord cannot evict at will. Rather, he/she must provide “notice.” Notice is the official legal document necessary to start an eviction. There are various types of notices. The type of notice used will depend on what type of eviction is being initiated. Please see the RPOA Eviction Timeline & Notice Forms chart for more information on the types of evictions, forms used, waiting periods and typical timeframe it takes for each type of eviction.
The time period for advance notice will depend on the type of notice. Typically, the time period is 7 to 30 days. In some cases, the notice period can be as little as 24 hours.
Following proper notice, the landlord must take the tenant to court, win the court hearing, and then wait until the tenant’s appeal period has expired before conducting an eviction. Even then, only a bailiff or sheriff with a court order can physically remove the tenant from the rental unit.
Be warned: landlords who use force, remove a tenant’s personal property, change the locks, shut off utilities, or introduce any other sort of barrier or nuisance without court approval are subject to strict penalties for conducting an illegal eviction.
For more information on evictions, please see RPOA’s related article What are the steps to legally evict a tenant in Michigan?
Rent Adjustment Provisions
A landlord cannot alter a lease provision without the written consent of the tenant. However, a lease can contain a provision allowing for certain rent adjustments, provided that the tenant is given at least 30 days advance written notice. Permitted adjustments include increases that are:
- required by local, state or federal law;
- required to protect the tenant’s health, safety or enjoyment of the property; or
- necessary to cover additional operating costs resulting from increases in property taxes, insurance premiums, or utility bills.
Rent increases for other reasons, such as increased maintenance and labor costs, are not permitted.
The Consequences for Violating the Truth in Renting Act
When a tenant discovers a prohibited provision in their lease, the Renting Act encourages them to write a letter to their landlord, pointing out the questionable provision(s). Once the landlord receives the tenant’s letter, he/she has 20 days to correct the problem (not just in this lease, but in all leases containing the problematic provision) by:
- notifying all tenants potentially affected by provision; and
- voiding or altering the illegal provision.
If the landlord fails to cure the lease within 20 days, any affected tenant may seek relief by taking one or more of the following actions to:
- void the rental agreement and terminate the tenancy;
- enjoin the landlord from using the prohibited provision in any future rental agreements;
- require the landlord to remove the provision from all other existing rental agreements; or,
- recover damages in the amount of $250 or actual damages, whichever is greater.
Again, this article is intended as an overview. Should you have detailed concerns about a lease provision and whether it is disallowed by law, it might be a good idea to either consult with a licensed attorney or contact RPOA directly.