Rental Laws & Taxes

Landlords and Tenants in Michigan – There are few things most landlords and tenants are unaware of security deposits in tenancy. Here are few:

1.There a limit on the amount that a landlord may collect as a security deposit and the law states that a security deposit shall not exceed 11⁄2 times the monthly rent.

2.What exactly is considered a security deposit?
– Any prepayment of rent—other than for the first full rental payment period established in the lease—and any refundable fee or deposit are considered by law to be part of the security deposit.
Sometimes the lease requires that both the first and last months’ rent be paid before a tenant moves in. If this is the case, the last month’s rent would be considered a security deposit. Sometimes, too, additional fees or deposits are charged to hold the rental property, for credit checks, for pets, for cleaning, for keys, for mailboxes, for storage, and for many other reasons. While these fees or deposits may not be called “security deposits” in the lease, if they are otherwise refundable, they are still considered by law to be part of the security deposit and subject to the strict rules that Michigan has adopted— including the limit on the total amount that a landlord may collect.

3.Things landlord must do with security deposit :
The landlord must either:
a) Deposit the money with a regulated financial institution (e.g., bank), OR
b) Deposit a cash bond or surety bond, to secure the entire deposit, with the Secretary of State. (Note: If the landlord does this, he or she may use the money at any time, for any purpose.) The bond ensures that there is money available to repay the tenant’s security deposit.

4.The security deposit is considered the lawful property of the tenant, until the landlord establishes a right to it—generally by obtaining a judgment in a court of law.
If the landlord sells the rental property, he or she remains liable with respect to the tenant’s security deposit until any ONE of the following occurs:
a) The landlord returns the deposit to the tenant, OR
b) The landlord transfers the deposit to the new owner and sends notice—by mail—to the tenant informing him or her of the new owner’s name and address, OR
c) The new owner sends written notice of their name and address to the tenant AND the name and address of the financial institution where the deposit is held AND the tenant’s obligation to provide a forwarding address within 4 days of terminating occupancy.

Source: www.legislature.mi.gov/documents/publications/tenantlandlord.pdf

Landlords and tenants in Michigan – What are the important terms need to be included in a lease agreement when you are involved in tenancy? 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 a 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 a question 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 he or she takes possession of the rental property.

Landlords and tenants – Make sure to check for these terms in a lease agreement as it will insure you a smooth tenancy period.

Source: www.legislature.mi.gov/documents/publications/tenantlandlord.pdf

Landlords in Louisiana – What do you do with the tenant’s security deposit after the lease agreement has expired? Here are basic guidelines on how to deal with security deposits in tenancy.

The Lessee’s Deposit Act requires the landlord to return deposits within one month after the end of the lease, provided the tenant fulfilled the lease obligations and left a forwarding address.

If any part of the deposit is retained, the landlord must send the tenant an itemized list of deductions and any remaining balance within one month. If the landlord fails to return the deposit or to send the itemized list within one month, the tenant may sue in Small Claims Court to recover the deposit.

If the landlord fails to account for the deposit within thirty (30) days of a tenant’s written request for a refund, then the law allows the tenant to recover actual damages (amount of damages made) or $200.00 whichever is greater. The judge may also award court costs and attorney fees to the person who wins the suit. The law does not permit the tenant to give up, or waive, this right in a lease.

Source: Louisiana landlord and tenant guide.

Landlords in Louisiana – A landlord may file a separate suit to collect past due rent and may seize personal items, such as furniture and appliances, found in the property. If the landlord is unable to locate the tenant, the court has a procedure which will still allow the landlord to get a judgment against the former tenant. The landlord may get a court order to seize personal property in the property without posting a bond or other security. If this happens, it is probably best to consult an attorney. If the landlord does not follow proper legal procedure, the tenant may be entitled to damages.

Source: Louisiana landlord and tenant guide.

Landlords and tenants in Louisiana – Pets may or may not be permitted under the terms of the lease. However, most leases that allow pets require the tenant to pay a deposit for damages caused by the pet. Money held as a pet deposit is recoverable under the Lessee’s Deposit Act. Money held as a “pet fee or charge” is not covered by the Act and may or may not be recoverable according to the terms of the lease. Tenants should apply for refunds of pet deposits in writing on the final day of occupancy, the same way they would request security or damage deposits.

Source: Louisiana landlord and tenant guide.

If the court decides in favor of the tenant, the tenant will not have to move, and the landlord may be ordered to pay the tenant’s court costs (for example, filing fees) and the tenant’s attorney’s fees. However, the tenant will have to pay any rent that the court orders.

If the landlord wins, the tenant will have to move. In addition, the court may order the tenant to pay the landlord’s court costs and attorney’s fees, and any proven damages, such as overdue rent or the cost of repairs if the tenant damaged the premises.

It is possible, but rare, for a losing tenant to convince the court to allow the tenant to remain in the rental unit. This is called relief from forfeiture of the tenancy. The tenant must convince the court of two things in order to obtain relief from forfeiture: that the eviction would cause the tenant severe hardship, and that the tenant is able to pay all of the rent that is due or that the tenant will fully comply with the lease or rental agreement.320

A tenant can obtain relief from forfeiture of a lease or a rental agreement, even if the tenancy has terminated (ended), so long as possession of the unit has not been turned over to the landlord. A tenant seeking relief from forfeiture (or the tenant’s attorney) must apply for relief immediately after the court issues its judgment in the unlawful detainer lawsuit.321

A tenant who loses an unlawful detainer lawsuit may appeal the judgment if the tenant believes that the judge mistakenly decided a legal issue in the case. However, the tenant will have to move before the appeal is heard, unless the tenant obtains a stay of enforcement of the judgment or relief from forfeiture (described immediately above). The court will not grant the tenant’s request for a stay of enforcement unless the court finds that the tenant or the tenant’s family will suffer extreme hardship, and that the landlord will not suffer irreparable harm. If the court grants the request for a stay of enforcement, it will order the tenant to make rent payments to the court in the amount ordered by the court.322

320    Code of Civil Procedure Section 1179.

321    California Practice Guide, Landlord-Tenant, Paragraph 9:444-9:445.1(Rutter Group 2009). The tenant’s written petition must be served on the landlord at least five days before the date of the hearing on the request for relief. If the tenant does not have an attorney, the tenant may orally apply to the court for relief, if the landlord either is present in court or has been given proper notice. The court also may order relief from forfeiture on its own motion. The court may order relief from forfeiture only on condition that the tenant pay all of the rent due (or fully comply with the lease or rental agreement). (Code of Civil Procedure Section 1179).

322    Code of Civil Procedure Section 1176.