Does raising the rent mean raise the deposit

Question

Does raising the rent mean raise the deposit , in the middle of re structuring a lease, and ill be raising the rent, does this mean tenants will would need to pay additional money for to bring the deposit to equal the montlhy rent ?

Account Closed · Answer

Unless you're completely renewing the lease, it's questionable whether or not you can.There are so many other comments from those out of Michigan, I thought I'd share what happens here:In Michigan, to require a tenant to have security deposit, you have to collect it at the time of the lease or within 14 days of the tenant taking occupancy and noting where it is held.A deposit can be held in two different ways--all of which can collect interest for you:In an account with your other funds that you use for anything. If so, you have to bond the deposit to ensure that you can pay it back if you need to.In an account that you do not use for anything else.The deposit can only be, at the most, 1.5 times the monthly rent. (Everything but the first month's rent and non-refundable fees are consider part of the deposit. So, "last month's rent" is part of the deposit as well as any other fees that are refundable.)The deposit is the property of the tenant until you prove otherwise with a Notice of Damages after the tenant has moved out (unless the only thing you're keeping the deposit for is for past due rent). The deposit can only be used for:(a) Reimburse the landlord for actual damages to the rental unit or any ancillary facility that are the direct result of conduct not reasonably expected in the normal course of habitation of a dwelling.(b) Pay the landlord for all rent in arrearage under the rental agreement, rent due for premature termination of the rental agreement by the tenant and for utility bills not paid by the tenant.Hope that helps!

Tyler Ansell · Answer

I do ask for the difference. In most cases it's only like $10-15 bucks per month so it's not a big deal.

Ross Denman · Answer

I wouldn't worry about touching the deposit. Honestly, the longer a tenant is in the home, the more reasonable acceptable wear and tear becomes. If I have a tenant for 7+ years, I don't charge them anything unless I have to remove personal items or trash out of the property or do excessive cleaning. Typically, we are having to change carpets and paint the entire home after 7 years whether it's had 4 tenants or 1. The fact that the tenant is saving you the costs to refurb the unit, vacancy time, tenant placement fees, etc. is well worth it... no since in worrying about a few bucks. They are probably saving you thousands.

Kelly N. · Answer

Hello Tereal,If I am increasing rents by a small amount, I leave the deposit as the same amount. We're talking about a $25-50 increase, and if I am offering to renew the lease to the tenants then I already know they are not destroying my apartment, so I don't feel an increased deposit is necessary. If an existing tenant decides to get a cat, I would increase the deposit. There have been a few cases where I am increasing the rent by a bit more, and in those cases I let them know that the deposit needs to come up as well, but I may give them a couple of months to come up with the extra cash if needed. The times I have done that were when I was increasing rent to close to market value (or close to it) on an apartment with an inherited tenant, and they are generally planning on leaving anyways.For new tenants, the deposit is always increased to reflect the rent- I do 1x the monthly rent for a deposit, or 1.5x if they have a cat.Like Jerry said, these deposits should be kept in a separate account- I use a savings account labelled "Security Deposits" so that it is clear it is not my money. I have never had a tenant ask to be paid interest on their deposit (I am in Michigan as well) and frankly rates are low enough I don't think most people are going to worry about it. That being said, I did request a non interest bearing account just so that no one could complain about not getting paid interest on their deposit- I'm not collecting interest to pay them.

Thomas S. · Answer

Increasing the deposit would be your choice but not necessary, if you also have LMR you would need them to bring that up to the new rate. This would apply when you do any annual rent increases.A deposit is of less concern if you are doing regular inspections and having tenant damage repair work completed and billed to the tenant at the time. As long as repairs and billing are done on a ongoing bases there is rarely much to bill tenants for at move out.

Kim Meredith Hampton · Answer

@Tereal Wilsonn normally deposits are kept the same throughout their tenancy. On the other hand, if you feel that the tenant would be in agreement with an increased deposit, then it can be done with the new lease, common to the tenant getting a pet and charging them an pet deposit and or fees