Michigan: Security Deposit Return Deadlines & Deductions

Requirements one by one

Governing law

Michigan's rules live in the Landlord and Tenant Relationships Act, 1972 PA 348, MCL §§ 554.601 through 554.616 — one compact act covering the deposit cap, how the deposit must be held, the inventory-checklist system, the return/itemization deadline, the tenant's dispute rights, and the remedies for noncompliance.

Deadline to return the deposit

The baseline deadline is 30 days, but a second, later deadline kicks in if the tenant disputes what's claimed. First: "the landlord shall mail to the tenant, within 30 days after the termination of occupancy, an itemized list of damages claimed for which the security deposit may be used as provided in section 7... The list shall be accompanied by a check or money order for the difference between the damages claimed and the amount of the security deposit held by the landlord." (§ 554.609). Miss that window entirely and "Failure by the landlord to comply with the notice of damages requirement within the 30 days after the termination of occupancy, constitutes agreement by the landlord that no damages are due and he shall remit to the tenant immediately the full security deposit." (§ 554.610). If the tenant instead disputes the claimed damages, the landlord has a second, outer deadline: "Within 45 days after termination of the occupancy and not thereafter the landlord may commence an action in a court of competent jurisdiction for a money judgment for damages which he has claimed or in lieu thereof return the balance of the security deposit held by him to the tenant... A landlord shall not be entitled to retain any portion of a security deposit for damages claimed unless he has first obtained a money judgment for the disputed amount or filed with the court satisfactory proof of an inability to obtain service on the tenant" or one of a few listed exceptions applies (§ 554.613(1)).

Itemized statement required?

Yes, whenever the landlord wants to keep any part of the deposit: a mailed itemized list of the damage claimed with an estimated repair cost for each item, sent with a check or money order for the balance, within the 30-day window. The notice also has to warn the tenant in bold type: "You must respond to this notice by mail within 7 days after receipt of same, otherwise you will forfeit the amount claimed for damages." (§ 554.609).

What can be deducted

Section 554.607 sets a short, exclusive list: "(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's Act phrases the wear-and-tear line differently than most states — instead of saying "no deduction for normal wear and tear," it limits deductible damage to what results from conduct that isn't "reasonably expected in the normal course of habitation," which excludes ordinary wear and tear by definition.

Maximum deposit amount

"A security deposit shall be required and maintained in accordance with the terms of this act and shall not exceed 1 1/2 months' rent." (§ 554.602). Unlike some states, Michigan doesn't vary the cap by tenancy length or type.

Interest on the deposit?

No. Nothing in §§ 554.601 through 554.616 requires a landlord to pay interest on a held deposit — the Act's only rule about the deposit's status while held is that it "is considered the lawful property of the tenant until the landlord establishes a right to the deposit or portions thereof" (§ 554.605), which says nothing about interest.

Penalty for a late/bad-faith withholding

Michigan layers two separate consequences. Missing the 30-day notice deadline outright forfeits any damages claim, as above. Separately, once a claim is disputed, the landlord has to follow through: "Failure of the landlord to comply fully with this section constitutes waiver of all claimed damages and makes him liable to the tenant for double the amount of the security deposit retained." (§ 554.613(2)). That doubling applies specifically to a landlord who claimed damages, got disputed, and then didn't obtain a judgment (or qualify for an exception) within the 45-day window.

Separate account or bond required?

Yes, with a use-based alternative: "The security deposit shall be deposited in a regulated financial institution. A landlord may use the moneys so deposited for any purposes he desires if he deposits with the secretary of state a cash bond or surety bond written by a surety company licensed to do business in this state... to secure the entire deposits up to $50,000.00 and 25% of any amount exceeding $50,000.00." (§ 554.604(1)). Unlike a simple escrow-or-bond choice, Michigan's bond option specifically unlocks the landlord's ability to spend the deposited funds for any purpose while the tenancy continues.

What trips people up

A missing forwarding address doesn't delay the landlord's 30-day clock — it can excuse the landlord from sending notice at all. Under § 554.611, if the tenant never gives the landlord a forwarding address, that "relieves the landlord of the requirement of notice of damages," but it doesn't push the 30-day deadline itself back to a later date; the clock in § 554.609 runs from termination of occupancy regardless.

Disputing the deductions doesn't get you paid faster — it starts a second, 45-day clock for the landlord to sue, not for you to get paid. If you respond disagreeing with the itemized list, the landlord isn't required to pay you immediately; the landlord instead has until 45 days after your tenancy ended to get a court judgment for the disputed amount, or lose the right to keep it (plus owe double).

The double-damages remedy in § 554.613(2) is tied to failing the 45-day judgment/exception process, not simply to a landlord acting in bad faith. A landlord can trigger it by procedural failure alone — not obtaining a judgment, not proving it couldn't serve the tenant, and not fitting one of the statute's four listed exceptions — regardless of whether a court ever labels the conduct "bad faith."

Common questions

Does my Michigan landlord owe me interest on my deposit? No — the Landlord and Tenant Relationships Act doesn't require it.

My landlord never sent me a damage list within 30 days — do I automatically get my whole deposit back? Yes, under § 554.610: missing that 30-day deadline is treated as the landlord agreeing no damages are due, and the full deposit must be returned immediately.

I disagreed with my landlord's itemized list — now what? The landlord then has until 45 days after your tenancy ended to get a court money judgment for the disputed amount (or prove to the court it couldn't serve you). If the landlord doesn't do either, it waives the claim and owes you double the amount it retained.

Statutes and sources

• MCL § 554.602 — 1.5-months'-rent deposit cap.
  https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-554-602 (accessed 2026-07-06)
• MCL § 554.604 — regulated-institution deposit or Secretary-of-State bond alternative.
  https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-554-604 (accessed 2026-07-06)
• MCL § 554.607 — permitted uses of the deposit.
  https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-554-607 (accessed 2026-07-06)
• MCL § 554.609 — 30-day itemized notice of damages.
  https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-554-609 (accessed 2026-07-06)
• MCL § 554.610 — forfeiture for missing the 30-day deadline.
  https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-554-610 (accessed 2026-07-06)
• MCL § 554.611 — effect of a missing tenant forwarding address.
  https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-554-611 (accessed 2026-07-06)
• MCL § 554.613 — 45-day suit deadline and double-damages penalty.
  https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-554-613 (accessed 2026-07-06)