Michigan security deposit account for landlords
Easily collect and manage deposits for every property with dedicated security deposit accounts.
Why use a security deposit account in {{ state }}
Security deposit funds are instantly separated, making move-in, move-out, and returns completely clear.
Benefits for property
owners
Repair and maintenance
Covers property damage such as paint, carpet, or floor damage, including costs caused by pets.
Fund separation
Meet state requirements for holding deposits in a dedicated tenant security deposit account.
Streamlined returns
Simplifies refunding tenants while accounting for deductions like cleaning or unpaid utilities.
Benefits for tenants
Fair protection
Funds are protected from misuse, covering only actual repair costs like cleaning, carpet replacement, or floor damage.
Transparency on deductions
Tenants can clearly see allowable charges, protecting against unfair claims on normal wear and tear.
Savings potential
Deposits may be held in a tenant security deposit account or rental deposit account that earns security deposit interest, helping tenants recover more than they put in.
Baselane accounts cannot hold security deposits in states requiring escrow or state-based accounts, but can be used to collect, track, and securely transfer deposits to compliant external accounts.
{{ state }} security deposit account
Each tenant’s deposit in Michigan can be placed into an escrow account at a financial institution (bank or credit union) or secured by a surety bond, but it's not a legal requirement. If an account is used, the landlord must notify the tenant of the location of the security deposit bank account in Michigan.
{{ state }} security deposit
limits
The maximum security deposit Michigan landlords can charge is 1.5 times the monthly rent. This cap is higher than the national average security deposit, and it includes any prepaid last month's rent collected upfront.
{{ state }} security deposit interest
State law security deposit rules don’t require landlords to pay Interest on security deposits in Michigan. This means the security deposit interest rate is zero.
Go beyond standard security deposit accounts
Collect, return, and track deposits by tenant and
property, even when funds are held in external accounts.
{{ state }} security deposit accounts
Keep every deposit organized and accounted for with secure transfers to [State] security deposit accounts.
Unlimited accounts for all entities
Manage deposits for all entities under one login — LLCs, corporations, partnerships, and individuals.
Free online payments
Collect rent and deposits online for free and easily return deposits via ACH, wire, or check.
Automated bookkeeping
Track and tag payments to the right tenant and property — automatically.
Essentials for every door
Everything you need for every part of the rental process.
Lease creation and e-sign
Upload or create and e-sign state-specific leases online.
Free tenant screening
Screen tenants online for free — instantly verify credit, background, evictions, ID, and income.
Property-specific accounts
Open unlimited checking and savings accounts to easily separate funds for all your properties with no monthly maintenance fees.
{{ state }} security deposit rules
1 1/2 months' rent
No
Escrow account with a bank or credit union, or hold as a surety bond.
Unpaid rent or utility bills, repairs, lease violations, cleaning costs
30 days
Additional resources
ARTICLE
How to collect security deposits
FAQs
How much security deposit can a landlord charge in Michigan?
The maximum Michigan security deposit is limited to 1 1/2 times (1.5x) the monthly rent.
Is interest required on Michigan landlord security deposits?
No, interest on the security deposit in Michigan isn’t required.
How should I issue a security deposit receipt to tenants in Michigan?
You must give the tenant written notice (often in the lease or a separate letter) within 14 days of their move-in. This notice must include your name and address, location of the bank, and a notice about the tenant’s obligation to provide a forwarding address within four days of moving out.
How many days to return the security deposit in Michigan?
Landlords must return the tenant’s security deposit within 30 days after a lease ends, but only if the tenant provides a forwarding address within four days of moving out. If the tenant doesn't provide an address, the landlord doesn't have to return the deposit. If the landlord has the address, they must either return the full deposit by check or mail order or mail an itemized list of deductions and the remaining balance.
What can a landlord deduct from a security deposit in Michigan?
The landlord's right to security deposit deductions is clearly laid out in the state law. A landlord is legally entitled to make deductions from a tenant's security deposit for specific reasons including any actual damages beyond normal wear and tear, such as floor damages. Landlords may also deduct for all past-due rent under the lease agreement, including rent owed due to the premature termination of the lease agreement, as well as any unpaid utility bills.
Can a security deposit be used for unpaid rent in Michigan?
Yes, a security deposit from an escrow account in Michigan can be used toward unpaid rent.
Can a landlord keep a security deposit for breaking a lease in Michigan?
In Michigan, a tenant’s security deposit can be applied to cover unpaid rent resulting from a tenant's early termination or breaking of the lease, provided the lease agreement permits this use. This is because the tenant remains responsible for rent until a replacement tenant is secured.
