Leases & Rental Agreements

LEASES &

RENTAL

AGREEMENTS

Kay Simmons

HUD Certified Housing Counselor

Oakland Livingston Human Service Agency

What is a

lease?

A legal contract between the tenant

and landlord, transferring possession

and use of the rental property.

It specifies the duties of each party

and is enforceable by both the

tenant and landlord.

A lease can be written or oral. It will

define the type of tenancy

being transferred.

What is

Tenancy?

The right to occupy and use

a property under the lease

or rental agreement

Different types of tenancy

have different legal rights

and obligations.

Types of

Tenancy

Fixed Term Tenancy

▪ The lease agreement specifies when the tenancy

begins and when it ends.

▪ It terminates automatically at the end of the

period specified.

At the end of

a fixed term

tenancy

▪ Generally, a written lease states

that if a tenant remains after the

fixed term expires, the tenancy

shall be considered a month-to-

month tenancy.

▪ If the lease does not address

additional time, and the tenant

stays in possession and the

landlord accepts the rent, the

lease is considered renewed for

the same fixed term upon the

same conditions.

Pros & Cons of Fixed Term

Tenancy

▪ PRO: The rental period is fixed, and the rental amount

is stable; the landlord may not regain possession or

raise the rent, with few exceptions.

▪ CON: The tenant is bound by the lease term and may

not simply move without remaining liable for the rent,

permitting fewer changes in arrangements.

Types of

Tenancy

Tenancy at Will

▪ This type of tenancy is indefinite in duration. It is

created by actual or implied consent.

▪ Usually a month-to-month tenancy, the lease is

considered renewed at the end of each rental

period

▪ Termination procedure is governed by statute

and requires notice.

Pros & Cons

of Tenancy at Will

▪ PRO: Different housing arrangements can be made

quickly; the tenant is free from further obligation once

proper notice of termination is given to the landlord.

▪ CON: With proper notice, the landlord can raise rent or

change conditions within the rental agreement.

Types of

Tenancy

Tenancy at Sufferance OR Holdover Tenancy

▪ Created by operation of law only. A tenant holds possession

after his or her legal right to possession has ended

(oftentimes based on landlord’s failure to act).

▪ The elements:

▪ tenant entered into possession lawfully,

▪ tenant’s legal right to possession has ended,

▪ tenant remains without the landlord’s consent.

Joint and

Several

Liability

• If more than one person signs the lease as

a tenant, the lease may state that the

tenants' obligations are “joint and several.”

• This means that each person is responsible

not only for his or her individual obligations,

but also for the obligations of all other

tenants. This includes paying rent and

performing all other terms of the lease.

Truth in Renting Act

▪ Enacted in 1979, ensures fair dealing between

landlords and tenants in lease agreements.

▪ Requires landlords to disclose certain

information in every lease

▪ Guarantees tenants certain rights under the

law, and prohibits lease provisions that

attempt to waive a tenant’s guaranteed rights

▪ Prevents eviction without going through the

judicial process

What

Should Be

Included In

the Lease?

Address of the rental

property

Starting and ending dates if

it is a fixed-term tenancy

Rent amount to be paid, how

frequently, and when and

where it is to be paid

Name and signature of the

landlord & tenant

Landlord’s mailing address

Landlord and tenant

responsibilities, such as who

pays utilities, pet policies,

repair and maintenance

responsibilities, etc.

Consequences for breach

of contract, and eviction

procedures

Provisions in Truth in Renting

Act

The landlord must provide written notice of the following within 14 days from the day the

tenant moves in:

• The landlord’s name and address for receipt of communications regarding the tenancy;

AND

• The name and address of the financial institution where the security deposit is held, OR

the name and address of the surety company and who filed the bond with the Secretary of

State; AND

• The tenant’s obligation to provide a forwarding address, in writing, within 4 days after the

tenant moves out.

Notice of

Truth in

Renting

Act

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

qualifiedperson.”

Violating the Truth in Renting Act

▪ The entire lease is not void—only the prohibited

provision.

▪ A landlord may fix the prohibited provision or add the

required disclosure language within 20 days after the

tenant brings the deficiency to the landlord’s

attention in writing

Changes to

a Lease

Generally, the landlord may not alter a lease

without the tenant’s written consent.

Exceptions are allowed if there is a clause in

the lease allowing for adjustments and 30 days

written notice is provided:

▪ Changes required by federal, state, or local

law

▪ Changes in rules relating to the property

meant to protect health, safety, and

peaceful enjoyment

▪ Changes in the amount of rental payments

to cover additional costs incurred by the

landlord because of increases in property

taxes, increases in utilities, and increases in

property insurance premiums.

Inventory Checklist

• At move-in, the landlord must provide the tenant with

2 identical blank copies of an inventory checklist,

referencing all items in the rental unit that belong to

the landlord.

• The first page of the checklist must state that the

tenant is required to properly complete the checklist,

noting the condition of the property, and return it to

the landlord within 7 days after moving in.

• The tenant may request a copy of the itemized list of

damages for the previous tenant. If requested, the

landlord must provide a copy to the tenant.

• It is highly recommended the tenant takes photos or

video recordings of the rental unit at move in.

Security Deposits

All refundable fees are considered part of the security deposit, as well as rent payments

past the first month.

By law, the maximum total security deposit can be no more than one and a half month’s

rent.

If there is a security deposit, the following must be provided in writing:

• Amount of any security deposit

• Name and address of the financial institution holding the security deposit

• Notice of the tenant’s obligation to provide a forwarding address to the landlord

within 4 days of terminating the tenancy

Early Termination of

Lease

Some leases have early termination

clauses that allow tenants to

terminate the lease under a specific

set of conditions.

Tenants who need to break their

leases must often:

• negotiate with their landlords

• provide ample notice or forfeit the

security deposit

• seek legal counsel

This Photo by Unknown author is licensed under CC BY-NC-ND.

Special Protections to Terminate Lease

Early

• Servicemembers Civil Relief Act allows active military to break their leases if they receive orders

requiring them to relocate for more than 90 days.

• Violence Against Women Act allow domestic violence victims to break leases without negative

consequences.

• Not just for women

• The abuse must have been fairly recent (normally within the last year) and usually requires

some proof, such as a court order of protection or a police report documenting the

violence.

• There may be an addendum added to leases stating this act, or separate statement

provided

• Senior Citizens or Those Incapable of Independent Living applies to a tenant who has occupied

a rental unit for more than 13 months and becomes eligible to move into senior-citizen housing

subsidized by a federal, state, or local government program, OR becomes incapable of living

independently, as certified by a physician in a notarized statement

• Must provide 60 days written notice

The End of

a Lease Term

▪ Use the tenant's copy of the move-in

checklist to assess damages. If

possible, the tenant should request a

final walkthrough with the landlord

and obtain a signed copy of the

move-out check list.

▪ Return all keys and obtain receipt.

▪ The tenant MUST provide

a forwarding address, in writing, to

the landlord within 4 days of moving

out.

Security

Deposit

The tenant has the right to

have the entire security

deposit returned unless the

tenant:

▪ Owes unpaid rent

▪ Owes unpaid utility bills

▪ Caused damage to the

rented property beyond

reasonable wear and tear

Refunding A

Security Deposit

The tenant MUST provide his or her

forwarding address—in writing—to the

landlord within 4 days of moving out.

▪ Calling or telling the landlord, or

landlord’s agent, won’t do.

Landlord has 30 days from move-out to

either:

▪ Return the entire amount of the

deposit by check or money order,

▪ Mail an itemized list of damages,

and a check or money order for the

remaining balance of the deposit.

▪ The itemized list must also contain

the following notice: “You must

respond to this notice by mail within

7 days after receipt of same.

Otherwise, you will forfeit the

amount claimed for damages.”

This Photo by Unknown author is licensed under CC BY.

Disputing Itemized List of Damages

If the tenant disputes any of the items on the itemized list, the tenant

MUST respond by mail within 7 days of receiving the list.

▪ The response must define reasons why the tenant disputes each

individual item of damage, the amount assessed against the

security deposit, and why the tenant should not be responsible.

The landlord then has two options:

▪ Negotiate an agreement in writing with the tenant

▪ File for a money judgment for damages against the tenant’s

security deposit

Going to

Court over

Security

Deposit

▪ If the landlord and tenant cannot agree and if

the landlord goes to court, the landlord MUST

prove that the tenant is responsible for the

damages.

▪ Either the landlord or the tenant can be the

plaintiff in a security deposit suit.

The landlord may file suit within 45 days

from termination of occupancy.

▪ The landlord MUST file suit to retain the

deposit. If the landlord does not file suit, he or

she may be liable to the tenant for double

the amount of the security deposit retained.

Court Legal Filing

The burden of filing suit shifts to the tenant if

• The tenant failed to provide his or her

forwarding address in writing within 4 days

of terminating occupancy; OR

• The tenant failed to respond—by mail— to

the itemized list of damages within 7 days of

receiving it; OR

• The landlord failed to return the

tenant’s deposit after receiving the tenant’s

response disputing the amount assessed

against it.

This Photo by Unknown author is licensed under CC BY.

Questions

Practical Guide for

Tenants & Landlords

MSU College of Law Housing Law Clinic

http://legislature.mi.gov/documents/Publicatio

ns/tenantlandlord.pdf

Additional Resources

MI Department of Attorney

General Landlord/Tenant web page

https://www.michigan.gov/ag/about/la

ndlord

Michigan Legal Help Web Site

https://michiganlegalhelp.org/

Truth in Renting Act

http://www.legislature.mi.gov/(S(3chdfu

sdsh50ab2da3cw5si5))/mileg.aspx?pag

e=getObject&objectname=mcl-act-348-

of-1972

HUD Certified Housing Counselors

https://www.michigan.gov/mshda/hom

eownership/housing-education