Top Laws Michigan Landlords Miss

[Account Closed]

I regularly teach courses at the RPOA and find that there are a few laws that many Michigan landlords miss in their management practices. Here are the top 10 I observe:

1. Not following Federally and State mandated lead-based paint disclosure. If your rental property was built before 1978, you must give your tenants the EPA/HUD booklet titled "Protect Your Family from Lead in Your Home" and complete and sign and have your tenants sign the rental lead disclosure form. You must do this BEFORE the tenant signs the lease. If you didn't disclose at the time the tenant moved in or don't have copies of the disclosures from the previous landlord, do it right away. Not knowing about the law or blaming it on the previous landlord will not be a defense.
2. Not using lead-safe work practices . In homes built before 1978, work that disturbs lead-painted surfaces must be done by an EPA RRP certified person and done using lead-safe work practices. If you’re doing the work yourself, you’ll need to be certified. Just about any surface in an older home will have lead-based paint on it. This is both a Federal and State Law. (Who is looking to see that you’re using lead-safe work practices? Tenants, neighborhood associations, municipalities—and knowledgeable neighbors. The EPA keeps their eyes on contractors.)
3. Not accepting Section 8 and ignoring lawful source of income laws. In many larger Michigan cities (Grand Rapids, Kentwood, and Wyoming included), there are fair housing laws that make it unlawful to refuse to rent to a prospective tenant based upon “lawful sources of income.” Sources typically include public housing assistance, including Section 8 rental vouchers. In other words, you cannot deny a person using a Section 8 voucher and must include the amount of the voucher as part of their calculated household income for screening purposes. You should never say “we don’t accept Section 8” or “we don’t participate in the Section 8 program.” Ergo, if you require 3 times the monthly rent for income and the tenant’s only source of income is the Section 8 voucher, the tenant will not qualify.
4. Disallowing a service/assistance/comfort animal. If a person within your unit has a prescription or documentation from a medical person or therapist that says the person needs a service/assistance/comfort animal, you cannot prevent the tenant from having the animal—even if you have a no-pet policy. You may also not ask for a pet fee or additional rent for the pet. You MAY be able to deny the animal if you can prove that your insurance carrier will not allow certain breeds of animals. Proof is necessary, and the jury is still out on this one.
5. Collecting too much for the security deposit. Many people are aware that a security deposit cannot be more than 1 ½ times the monthly rent. However, many landlords don’t know that ANY monies collected other than first month’s rent and non-refundable fees are also considered part of the security deposit. So, if you’re collecting “last month’s rent,” you must also count that as part of the total security deposit. That is problematic. Unless the tenant does not pay you the last month’s rent, you can’t keep that portion of the security deposit. As for non-refundable fees, such as cleaning fees, you cannot include any option that the money can be refunded—otherwise, they are also considered part of the security deposit.
6. Keeping a security deposit for cleaning and/or repainting. Security deposits can only be kept for damage beyond normal wear and tear, past due rent, past due utilities (if the landlord pays for them and collects the payments from the tenant or if it is a water bill that the city demands you, the owner, to pay), and court fees (if awarded by a judge). Cleaning and painting between tenants is considered a regular expense of owning rental property.
7. Not sending a notice of damage fast enough or suing for a security deposit soon enough. Landlords have 30 days to send out a notice of damages from the date the tenant moves out. Tenants have 7 days to respond to a notice of damages. Landlords have 45 days from the day of move-out to sue the tenant to keep the deposit if the tenant disputes the landlord’s claims. Waiting too long to send out the notice can mess up a landlord’s chance of suing in court to keep the deposit. If you wait the full 30 days to send out the notice and the tenant takes the full 7 days to respond, this only leaves you 8 days to file a case in small claims court to sue to retain the security deposit. The number of landlords that miss this window of opportunity is enormous. Also, the Michigan Landlord-Tenant Relationship Act includes a provision that enables the tenant to sue the landlord indefinitely for the security deposit.
8. Harassing tenants. Some landlord actions can be considered legal harassment. To avoid harassment claims you should always give 24 notice of your intent to enter the unit for any reason—except an emergency. You should also avoid frequent visits to the property even with 24 hours’ notice. And, you should not make a regular practice of aggressively collecting past due rent face-to-face; a Demand for Nonpayment of Rent should be sent instead. Landlords should also make sure to include a statement in their lease that allows them entry for regular safety and maintenance inspections, e.g. every 6 months. (Making friends with tenants is also not a good idea. At some point, your tenant may no longer consider you a friend and your frequent visits may become unwanted.)
9. Not getting it in writing. Simply telling your tenants that you’re going to raise the rent at the end of the initial lease term isn’t enough. Or, telling them that you’ll allow a certain pet regardless of the initial pet policy and exclusion in the lease. All changes to a lease should be in writing and given with the proper amount of notice.  (Verbal leases of less than a year are allowed--but not advisable. And, if you end up in court, the judge will deem the less to be a periodic, 30 day, lease.)
10. Not using a licensed contractor and/or pulling permits. This is becoming more of a problem. Many cities are now looking for work that appears to be unprofessional or, if work seems relatively new, checking to see if the proper permits were pulled. If the work is determined to have been done without a permit or done by an unlicensed person, you may be required to have it inspected by a licensed person or—worse yet—completely redone by a licensed person. This is not to mention the huge fines and fees that will need to be paid for the permit and/or lack thereof.

If you have questions, feel free to contact me.

[George P.]

not allowing the landlords to pull permits frustrates me to NO END. my reasoning is this...

as a landlord i want to pull a permit so they come and inspect the property. it's not like i am trying to HIDE the fact that updates were done. why they only allow licensed people to pull a permit is the dumbest thing in the land lording business.