Published 2026-09-27 · 8 min read

Michigan Security Deposit Law 2026: Limits, Deadlines & Deductions

Michigan's Security Deposit Act caps deposits at 1.5 months' rent, requires an itemized notice of damages mailed within 30 days after occupancy ends, and then gives the landlord 45 days from the end of occupancy — and not thereafter — to sue for any disputed amount or return it. Miss that last step and the landlord waives all claimed damages and owes double the amount retained. Everything here is governed by MCL 554.601–554.616 (Act 348 of 1972).

The short version: Collect no more than 1½ months' rent. Within 14 days after the tenant takes possession, send the written §554.603 notice naming yourself, the financial institution or surety, and the tenant's duty to give a forwarding address within 4 days after moving out. Deposit the money in a regulated financial institution — you may use it only if you have posted the §554.604 bond with the secretary of state. Use inventory checklists at both move-in and move-out. Within 30 days after termination of occupancy, mail the itemized notice with a check or money order for the balance, or pay the balance electronically within 10 days after mailing under §554.609(3). If the tenant disputes an item in detail within 7 days after receiving the notice, sue or return the disputed amount by day 45.

Corrections to the earlier version of this page: The old page understated the holding rule — §554.604 requires the deposit to sit in a regulated financial institution, and a landlord may use the funds only after posting a cash or surety bond with the secretary of state. It also overstated the checklist rule: §554.608 requires checklists at both ends of the tenancy but contains no "no checklist, no deductions" bar; the actual bars are in §554.609(2), §554.610, and §554.613. And the penalty is double the amount retained, not automatically double the full deposit. The §554.603 14-day notice, the §554.609(4) bold-face response statement, and the §554.610 consequence for a late notice were missing or vague and are covered below.

Michigan runs four clocks at once — 14 days, 30 days, 7 days, and 45 days — and the last one ends "and not thereafter." The Security Deposit Disposition & Deadline Tracker keeps your deposit register, deduction ledger, and deadlines in one formula-driven tracker ($14.95, one-time purchase).

The statute table

Limits: how much can you charge?

The cap is 1½ months' rent (MCL 554.602) — one of the most generous caps in the Midwest, but still a hard ceiling. You cannot charge two months "for pets" or stack refundable deposits on top; the total of everything demanded as a refundable security deposit may not exceed 1½ months' rent. On $1,200 rent, the ceiling is $1,800. Check your numbers with the Security Deposit Max Checker.

The deadlines, precisely

Michigan's system is a chain, and each link has its own clock:

• Day 14 (possession): the §554.603 written notice is due no later than 14 days after the tenant assumes possession.
• Day 4 (after move-out): the tenant's written forwarding address is due within 4 days after termination of occupancy (§554.611).
• Day 30 (after move-out): the itemized notice of damages must be mailed (§554.609(1)).
• Day 7 (after receipt): the tenant's detailed response is due within 7 days after receiving the notice (§554.612).
• Day 45 (after move-out): the landlord's suit-or-return deadline for disputed amounts — "and not thereafter" (§554.613(1)).

When the clocks actually start

The 30-day and 45-day clocks both run from termination of occupancy, not from your inspection, your repair bills, or the date the tenant's response arrives — which is why a tenant who responds on day 40 still leaves you only 5 days to file. The tenant's 7-day response clock is the exception: it runs from receipt of the notice, and the tenant's mailing date counts as the response date (§554.612). The electronic-payment clock runs from mailing the notice: the transfer must land within 10 days after mailing (§554.609(3)). The §554.603 notice clock runs from the tenant assuming possession, at the very start of the tenancy.

A worked example

Say rent is $1,200 a month and the deposit is $1,800, at the 1½-month cap. Occupancy terminates on Monday, March 2, 2026.

• The tenant's forwarding address is due Friday, March 6, 2026 (4 days).
• You find $650 in proper charges — $400 of damage beyond normal habitation and $250 of unpaid utilities — so the balance is $1,150. The itemized notice must be mailed by Wednesday, April 1, 2026 (30 days), accompanied by a check or money order for $1,150 — or, if you pay electronically instead, the $1,150 must be deposited into the tenant's account by Saturday, April 11, 2026 (10 days after mailing).
• The tenant receives the notice on Friday, April 3 and mails a detailed dispute of the $400 damage item on Friday, April 10, 2026 — inside the 7-day window. Your deadline to sue for that $400 or return it is Thursday, April 16, 2026 (45 days from March 2), and not thereafter.

Find your exact cutoffs with the Security Deposit Deadline Finder.

Deductions and the itemized list

Deductions are limited to the §554.607 list, and nothing else:

1. Actual damages to the rental unit or an ancillary facility that are the direct result of conduct not reasonably expected in the normal course of habitation;

2. Rent in arrears under the rental agreement, rent due for premature termination by the tenant, and utility bills the tenant did not pay.

The notice itself has required contents (§554.609): an itemized list of the damages claimed, the estimated cost of repair of each damaged item, and the amounts and bases on which you intend to assess the tenant. It must be accompanied by a check or money order for the difference between the damages claimed and the deposit held — or paid electronically under subsection (3) — and it must not include any damages that were claimed on a previous termination inventory checklist from before this tenant's occupancy. It must also carry the §554.609(4) statement, in 12-point boldface type at least 4 points larger than the body, telling the tenant they must respond by mail within 7 days after receipt or forfeit the amount claimed. Generate a compliant letter with the Security Deposit Deduction Letter Generator.

The checklists are the evidence base, and §554.608 prescribes them in detail: checklists at both commencement and termination; at commencement you furnish the tenant 2 blank copies of a form identical to the termination form, covering every landlord-owned item in the unit; the tenant reviews it, notes the condition, and returns 1 copy within 7 days after receiving possession; the form carries its own bold-face notice, including the tenant's right to a copy of the last termination checklist; and at termination you complete a termination checklist listing all the damages you claim the tenant caused. The Act sets no separate "no checklist, no deduction" penalty — but a missing commencement checklist leaves the §554.609 notice with nothing to stand on, and re-claiming a prior tenant's checklist damage is expressly barred.

Move-in to move-out compliance checklist

1. Stay at or under 1½ months' rent for everything that functions as a refundable deposit (§554.602).

2. Send the §554.603 notice within 14 days after the tenant assumes possession: your name and address for communications, the financial institution or surety, the tenant's forwarding-address duty, and the statutory statement in 12-point boldface.

3. Bank it, or bond it. Deposit the money in a regulated financial institution; use the funds only if the §554.604 cash or surety bond is on file with the secretary of state.

4. Run the commencement checklist. Two blank copies at move-in, the tenant's signed copy back within 7 days after possession, and offer the last termination checklist on request (§554.608).

5. Complete the termination checklist listing every item of damage you claim, and keep invoices, estimates, and photos for each charge (§554.608(5)).

6. Mail the §554.609 notice within 30 days after termination of occupancy — itemized, per-item estimated costs, amounts and bases, the bold-face 7-day response statement, and the balance by check or money order, or electronically within 10 days after mailing.

7. Calendar day 45 before you mail anything. If the tenant disputes an item in detail within 7 days after receipt, file for a money judgment or return the disputed amount by day 45 after termination of occupancy — there is no extension (§554.613).

Interest and where the money sits

• Where it sits: a regulated financial institution (§554.604(1)). The deposit remains the tenant's lawful property until you establish a right to part of it (§554.605).
• Using the money requires a bond: a landlord who wants to use deposited funds must file a cash bond or a surety bond from a licensed surety, acceptable to the attorney general, with the secretary of state, securing the entire deposits up to $50,000 and 25% of any amount above that (§554.604(1)). Anyone the bond protects may sue on it in the court where the landlord resides or does business (§554.604(2)).
• Interest: the Act requires no interest payment to the tenant. That silence is not permission to commingle casually — without the bond, the money stays deposited.

The penalty, spelled out

Three different failures carry three different sanctions — do not merge them:

• Late or missing notice (§554.610): fail to comply with the §554.609 notice requirement within 30 days after termination of occupancy and you are deemed to agree that no damages are due — remit the full deposit immediately.
• Keeping a disputed amount without a judgment (§554.613(1)): you may not retain any part of the deposit for claimed damages unless you first obtained a money judgment for the disputed amount, or filed satisfactory proof that the tenant could not be served, or one of four exceptions applies: the tenant gave no forwarding address (§554.611), the tenant did not respond as §554.612 requires, the parties agreed in writing, or the amount is entirely accrued unpaid rent for a period of the tenant's actual or constructive possession. Section 554.613(2) separately preserves retention in satisfaction of a money judgment from summary proceedings or other proceedings at law.
• Waiver plus double (§554.613(2)): fail to comply fully with §554.613 and you waive all claimed damages and are liable to the tenant for double the amount of the security deposit retained.

Run the worked example through that formula. You retained the disputed $400 past Thursday, April 16, 2026 with no judgment, no proof of unservability, and no exception: the $400 claim is waived and you owe double the amount retained — 2 × $400 = $800 — on top of giving the money back. If instead you had retained the entire $1,800, the double figure is 2 × $1,800 = $3,600. Separately, had you never mailed the §554.609 notice at all, §554.610 would have cost you the whole $650 in otherwise-valid charges: no damages are due, and the full $1,800 goes back immediately.

FAQ

How long does a Michigan landlord have to send the itemized list?

Within 30 days after termination of occupancy, by mail, with the balance — a check or money order with the notice, or an electronic transfer deposited within 10 days after mailing it (§554.609).

What is the maximum security deposit in Michigan?

1½ months' rent (§554.602). On $1,200 rent, that is $1,800, and every refundable deposit charge counts toward the one total.

Do I need a move-in checklist?

Yes — §554.608 requires inventory checklists at both commencement and termination, on identical forms, with the tenant returning the commencement copy within 7 days after taking possession. The Act's express deduction bars sit elsewhere (§554.609(2) prior-checklist damages; §554.610; §554.613), but the checklists are the record your notice is judged against.

What if the tenant never gives me a forwarding address?

The tenant must notify you in writing within 4 days after termination of occupancy (§554.611). Failing that relieves you of the §554.609 notice duty and is one of the §554.613(1) exceptions to the judgment-first rule — but it does not prejudice the tenant's later claim for the deposit, so document the file either way. Note the mirror rule: if you never sent the §554.603 notice, the tenant is relieved of the forwarding-address obligation.

Can the tenant just "disagree" with my itemized list?

No — §554.612 requires a response by ordinary mail within 7 days after receipt, indicating in detail agreement or disagreement with the charges listed. A timely, detailed dispute is what triggers your 45-day suit-or-return duty; a tenant who does not respond falls under a §554.613(1) exception.

Can I pay the balance electronically instead of mailing a check?

Yes. Under §554.609(3), if you transmit the balance by direct deposit or electronic transfer to the tenant's bank account, or to an internet or mobile payment account or application, no check or money order accompanies the notice — but the money must be deposited within 10 days after you mail the notice.

Can I deduct for carpet replacement after a 3-year tenancy?

Only if it fits §554.607(a): actual damage that is the direct result of conduct not reasonably expected in normal habitation. A carpet worn out at the end of its useful life is normal habitation, not §554.607(a) damage, and the charge also may not repeat anything claimed on a previous termination checklist (§554.609(2)).

What happens to the deposit if I sell the property mid-tenancy?

You remain liable until one of three things happens under §554.614: the deposit is transferred to your successor with written notice to the tenant by ordinary mail naming the successor, the successor complies with §554.604, or the deposit is returned to the tenant.

Read the statute yourself

Everything here traces back to Act 348 of 1972, MCL 554.601–554.616. If anything is disputed, the primary sources control:

• Michigan Security Deposit Act, Act 348 of 1972 (Michigan Legislature, official) — the official chapter page for the full current Act.
• MCL 554.609 (Michigan Legislature, official) — the 30-day notice, its required contents, and the electronic-payment rule in subsection (3).
• MCL 554.613 (Michigan Legislature, official) — the 45-day suit-or-return rule, the retention exceptions, and the waiver-plus-double sanction.
• MCL 554.609 (Justia) — the same section on Justia.
• MCL 554.613 (Cornell LII) — the same section in Cornell's code.

The deposit is only one piece of Michigan compliance. Our full Michigan landlord-tenant law guide covers the rest of the relationship — rent rules, the Truth in Renting Act, repairs and habitability, entry rights, ending a tenancy under MCL 554.134, and eviction through summary proceedings.

More security deposit guides

• Security deposit laws by state
• Massachusetts security deposit law
• Minnesota security deposit law
• Maryland security deposit law
• Mississippi security deposit law

Last verified: October 15, 2026. This is general information, not legal advice. Verify with a licensed Michigan attorney before acting.