Michigan's Landlord and Tenant Relationships Act (1972 PA 348, M.C.L. § 554.601 and following) runs a security deposit on a chain of deadlines: 14 days for the landlord's opening notice, 4 days for the tenant's forwarding address, 30 days for the itemized damage list, 7 days for the tenant to object — and then the one almost no landlord knows: if the tenant disputes your deductions, you must file suit within 45 days of move-out or give the money back. Sitting on a contested deposit isn't an option in Michigan; it's a waiver, and bad-faith retention runs to double damages.
Here's the whole chain, in the order it fires.
The cap: 1.5 months' rent
M.C.L. § 554.602 caps the security deposit at one and a half months' rent — a hard ceiling, not a guideline. Michigan treats certain prepaid amounts as part of the deposit too: a "cleaning fee" or similar nonrefundable charge collected up front generally counts against the cap. If you want more protection than 1.5 months buys, the lease terms — not a bigger deposit — have to do that work.
Within 14 days: the landlord's written notice
Under M.C.L. § 554.603, within 14 days of the tenant taking possession you must give written notice stating:
- the landlord's name and address for receipt of communications,
- the name and address of the financial institution or surety holding the deposit, and
- the tenant's obligation to provide a forwarding address within 4 days of moving out (the statute prescribes the exact sentence, in 12-point boldface).
That last line matters later: the tenant's 4-day duty under M.C.L. § 554.611 is what makes your 30-day mailing possible, and your lease or notice has to say it in the statutory words.
Where the money lives: regulated institution or bond
M.C.L. § 554.604 gives you two lawful homes for the deposit: a regulated financial institution, or — if you want to use the funds during the tenancy — a cash or surety bond filed with the Secretary of State. What you can't do is quietly absorb the deposit into general funds without the bond. The deposit remains the tenant's money, held for their benefit, until deductions are lawfully established.
The two checklists
M.C.L. § 554.608 requires inventory checklists at both ends of the tenancy. At move-in you give the tenant two blank copies of the checklist; the tenant completes and returns one within 7 days of taking possession. At move-out you complete a termination inventory checklist recording the damage you claim. The move-in checklist must also carry prescribed notice text telling the tenant they're entitled to request a copy of the prior tenant's termination inventory.
This mirrors the rule that makes Washington's checklist requirement famous — but Michigan wants the procedure on both ends, and the termination checklist is the foundation for every deduction you'll claim in the next step.
Within 30 days: the itemized list — or full refund
Under M.C.L. § 554.609, within 30 days after the tenant moves out you must mail an itemized list of damages — each item described, each amount stated, in duplicate, with a check for the undisputed balance of the deposit. The notice must also include the statutory statement (again in the statute's own words) that the tenant must respond within 7 days. Normal wear and tear isn't damage; unpaid rent and unpaid utilities the tenant owed under the lease can be claimed.
Miss the 30 days and M.C.L. § 554.610 cuts the analysis short: the landlord loses the right to claim against the deposit entirely and owes the full amount back. (The one exception: you don't owe a mailing you couldn't make — a tenant who never gave a forwarding address within their 4-day window loosens the timing, but don't rely on that; document everything.)
The 45-day sue-or-forfeit rule
Now the step that surprises even experienced landlords. If the tenant answers your itemized list within 7 days (M.C.L. § 554.612) disputing your deductions, you can't just keep the contested money and let the tenant decide whether to sue. Under M.C.L. § 554.613, unless the tenant has agreed in writing to the deductions, the landlord must commence an action in court within 45 days of the end of occupancy to establish the claimed damages.
No suit inside the window means no claim: retaining the deposit anyway constitutes a waiver, and a landlord who holds the money in bad faith is liable to the tenant for double the amount retained. The burden lands where most landlords don't expect it — the landlord is the one who has to go to court, on a clock.
Compare Texas, where the landlord who itemizes on time simply keeps the deduction unless the tenant sues, or Ohio's 30-day double-damages rule, which punishes late returns but never forces the landlord to file first. Michigan inverts the default — that's the trap. You can see how all twenty states we cover handle this on our security deposit laws by state comparison page.
Common mistakes
Skipping the 14-day bank/surety notice. The § 554.603 notice — with the boldface forwarding-address sentence — is a day-one lease-packet item, not an afterthought.
No move-in checklist, or only one copy. § 554.608 wants two blank copies at move-in and a completed termination checklist at move-out; your deductions inherit their credibility from these documents.
Mailing the itemized list late. Day 31 means a full refund under § 554.610, regardless of how real the damage was.
Ignoring a tenant's 7-day dispute. Once the tenant objects, holding the contested amount past the 45-day suit window converts a valid claim into a double-damages liability under § 554.613.
Charging over the cap. 1.5 months is the ceiling — and up-front nonrefundable fees can count against it.
Build a compliant Michigan lease — $29 one-time, generated in minutes, with the § 554.603 notice language, checklist procedure, and deposit clauses baked in. New to deposits? Start with our security deposit glossary entry.
Statutory references
- M.C.L. § 554.602 — deposit capped at 1½ months' rent. Official text
- M.C.L. § 554.603 — 14-day written notice: landlord address, depository/surety, and the tenant's 4-day forwarding-address duty (prescribed text).
- M.C.L. § 554.604 — deposit held in a regulated financial institution, or cash/surety bond filed with the Secretary of State.
- M.C.L. § 554.608 — inventory checklists at commencement (two blank copies; tenant returns one in 7 days) and termination.
- M.C.L. § 554.609–.610 — 30-day itemized damage list in duplicate; failure forfeits the claim and requires full return. Official text
- M.C.L. § 554.611–.612 — tenant's 4-day forwarding address; tenant's 7-day response to the itemized list (prescribed notice text).
- M.C.L. § 554.613 — 45-day window to sue for contested deductions; bad-faith retention → double damages.