Security Deposits: Are Michigan Landlords and Investors Collecting the Legal Maximum from Tenants?
When it comes to protecting your investment property in Michigan, a strong lease agreement isn’t the only thing you need to get right. One of the most overlooked—but critical—parts of the landlord-tenant relationship is the security deposit.
We see it all the time at Harp Law—landlords charging too little, too much, not following the right procedures, or failing to update their leases to stay compliant with Michigan law. This can put you at serious financial risk when something goes wrong.
Here’s what you need to know.
💡 What Is the Legal Maximum Security Deposit in Michigan?
Under the Michigan Security Deposit Act, residential landlords can collect up to 1.5 times the monthly rent as a security deposit. That’s it—no more.
For example:
If your monthly rent is $1,000, you can legally collect up to $1,500 as a security deposit.
This limit applies regardless of the type of property or tenant situation, in the residential context. Charging more than this amount can result in legal penalties or court challenges if a tenant disputes it.
✅ Why You Should Collect the Maximum
Attorney Hadi Harp strongly recommends collecting the full 1.5x allowed under the law. Here’s why:
🧾 Damage Repairs – Unexpected damage to walls, appliances, or fixtures happens more often than you think.
💧 Unpaid Utilities – If your tenant skips out on the water bill, you could be stuck with the cost.
🚪 Early Lease Termination – If a tenant moves out six months early, that extra deposit gives you breathing room while you find a replacement.
Having a full security deposit gives landlords peace of mind and legal leverage when it’s needed most.
📋 Other Lease Compliance Tips
Alongside the deposit, make sure your lease:
Includes all required disclosures
Complies with Michigan’s Landlord-Tenant Act
Specifies how and when the deposit will be returned
Notes where the deposit is being held (as required by law).
Not sure your lease is up to date? Now’s the time to review.
🛠️ Protect Your Property the Smart Way
Don’t leave money—and legal protection—on the table.
At Harp Law, we help out of state landlords and investors in Michigan safeguard what matters most. Whether you’re starting out or growing your portfolio, we’re here to support your next legal step.
Need help reviewing your lease or updating your landlord documents? Contact us today.