Mich. Comp. Laws § § 554.607
Security deposit; permissible uses.
Operative Text
Sec. 7. A security deposit may be used only for the following purposes: (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.
Michigan law under MCL § 554.601 et seq. § 554.607 limits the purposes for which a landlord may draw on a tenant's security deposit. The deposit may only cover two categories: actual physical damages to the rental unit or related facilities that go beyond normal wear and tear from ordinary living, and unpaid financial obligations such as rent arrears, rent owed due to early lease termination, or utility bills the tenant failed to pay. Any use of the deposit outside these two categories is not permitted under this provision.
Plain English — not legal advice.
Under MCL § 554.601 et seq. § 554.607, compliant operators document the condition of the rental unit at move-in and move-out to substantiate any damage claims that exceed normal habitation wear. Landlords generally track rent balances, early-termination charges, and unpaid utility obligations separately so that any deductions from the security deposit can be clearly tied to one of the two permitted categories. Maintaining thorough records—such as dated photographs, signed inspection reports, and itemized billing statements—supports a defensible accounting of how deposit funds were applied.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
MCL § 554.601 et seq. § 554.607 establishes that a security deposit cannot be used for purposes beyond actual damages from abnormal use and specific unpaid financial obligations, which means deductions for ordinary wear and tear or other unlisted reasons are not authorized by this provision. Tenants who believe a landlord has made improper deductions may have grounds to challenge those deductions, and tenant-rights organizations can help explain what options are generally available under Michigan law. Reviewing the itemized statement of deductions that landlords are required to provide is typically a useful starting point for understanding whether the deductions align with the permitted uses listed in § 554.607.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 13, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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