Michigan does not issue a statewide landlord license, so the Michigan landlord license and registration requirements a new rental owner actually faces are set at the local level by their city, village, or township, layered on top of state rules for security deposits and lease terms and federal rules on lead paint, fair housing, and tax reporting. The Housing Law of Michigan hands registration, inspection, and certification authority to local governments, which is why a landlord in Detroit, Grand Rapids, Taylor, or a small township outside Traverse City will all follow different procedures.
Who Requires Registration in Michigan
The Housing Law of Michigan applies to every city, village, and township with a population of 10,000 or more, and smaller communities can opt in by resolution.1Michigan Legislature. Michigan Compiled Laws 125.401 – Short Title; Scope of Act The statute preserves local authority to go further, stating that it does not “preempt, preclude, or interfere with the authority of a municipality to protect the health, safety, and general welfare of the public through ordinance, charter, or other means.”2Michigan Legislature. Michigan Compiled Laws 125.534 Municipalities can set standards stricter than the state minimum.3Michigan Courts. Housing Law of Michigan
There is no single form or single office that works statewide. Your first call is to the local building department or city clerk where the property sits. Some jurisdictions require annual registration and recurring inspections. Others have no rental program at all. Grand Rapids runs its own rental certification program and issues certificates of compliance through it.4City of Grand Rapids, Michigan. Rental Certification Program Bay City requires every rental to be registered, inspected, and certified before a tenant moves in.5Bay City, MI. Rental Registration and Inspection Detroit handles landlord registration through its Buildings, Safety Engineering and Environmental Department, and treats registration failures as blight violations.6City of Detroit. Landlord Rental Requirements
What Goes Into a Rental Registration
The state’s Housing Law sets a floor for what the local registry must contain. Under MCL 125.525, the owner of a multiple dwelling or rooming house offered for rent more than six months per year must register with the local enforcing agency within 60 days of first offering the property for occupancy. The entry has to include the owner’s name, the address of the owner’s residence or usual place of business, and the location of the rental. If a management company or other agent runs the property, that agent’s name and place of business go in as well.7Michigan Legislature. Michigan Compiled Laws 125.525 – Registry of Owners and Premises; Transfer of Ownership
Most local programs ask for more. Grand Rapids collects the property address, owner name and contact information, and manager contact information if someone else handles the property.8City of Grand Rapids, Michigan. Register a Rental or Vacant Property Depending on where you are, you may also be asked for the property tax identification number, unit count, government-issued ID, and articles of organization if the owner of record is an LLC. The name on the application should match the deed recorded with the county register of deeds.
Registration Fees
Fees are local and vary widely. Delhi Charter Township charges $110 per parcel plus $33 per unit, which works out to $143 for a single-family house and $176 for a duplex.9Delhi Charter Township. Rental Registration The City of Taylor charges a flat $200 one-time registration fee per rental home.10City of Taylor. Rental Department Check the current fee schedule with your local building department before you submit.
Inspections and the Certificate of Compliance
After registration, most municipalities schedule an inspection before issuing a certificate of compliance. Code enforcement officers look at fire safety, plumbing, electrical, and general habitability, and when the property passes, the municipality issues the certificate confirming the unit is fit for occupancy.4City of Grand Rapids, Michigan. Rental Certification Program
Under the Housing Law, the maximum period between inspections for a multiple dwelling or rooming house is four years, extending to six if the most recent inspection found no violations and the property hasn’t changed hands. Local ordinances often shorten those intervals. Inspection fees have to be reasonable and cannot exceed the actual cost of performing the inspection.11Michigan Legislature. Michigan Compiled Laws 125.526 Schedule inspections well ahead of a planned lease start so you aren’t renting a unit without a current certificate.
The Cost of Renting Without a Certificate
Operating without a valid certificate of compliance is not just a fine risk. When a certificate is withheld or suspended, the tenant’s obligation to pay rent to the landlord is suspended. Those payments go into an escrow account controlled by the enforcing agency, and the money can be used to pay for repairs that bring the property into compliance.12Michigan Legislature. Michigan Compiled Laws 125.530 A landlord without a certificate can lose control of the income stream.
The enforcing agency can also order unoccupied units to stay empty and order occupied units vacated until the property passes reinspection.12Michigan Legislature. Michigan Compiled Laws 125.530 The rent-suspension rule has two carve-outs: it doesn’t apply if the landlord can show the hazardous conditions were caused by the tenant, or if the landlord has not yet had a reasonable opportunity after receiving notice of violations to apply for a temporary certificate.
Security Deposit Rules
Michigan caps security deposits at one and a half months’ rent.13Michigan Legislature. Michigan Compiled Laws 554.602 – Security Deposit On a $1,200-per-month rental, the maximum deposit is $1,800. The deposit has to be held in a regulated financial institution such as a bank or credit union, or you must post a cash or surety bond with the Michigan Secretary of State guaranteeing the funds are available for repayment.
Within 30 days after a tenant moves out, you have to mail an itemized list of any damages you’re claiming, the estimated repair cost for each item, and a check or money order for the difference between those damages and the deposit.14Michigan Legislature. Michigan Compiled Laws 554.609 You cannot deduct for damage already noted on a move-in checklist before the tenant took occupancy. Missing the 30-day deadline or skipping the itemized statement can forfeit your right to keep any part of the deposit.
What Your Lease Cannot Say
Michigan’s Truth in Renting Act restricts what you can put in a residential lease. A prohibited clause is unenforceable and can expose you to liability. The Act bars lease provisions that waive the tenant’s right to a fit and habitable unit, override statutory security deposit rules, allow confession of judgment, excuse the landlord’s own negligence in maintaining the property, waive a jury trial, impose attorney’s fees or legal costs beyond what a statute specifically allows, or take a security interest in the tenant’s personal property for unpaid rent. If a lease accelerates rent on default, it must also tell the tenant they may not owe the full accelerated amount because of the landlord’s duty to mitigate damages, and either party can ask a court to determine the actual amount owed. Lease terms that discriminate in violation of Michigan civil rights law or that waive eviction procedural protections are also prohibited.15Michigan Legislature. Truth in Renting Act (Act 454 of 1978) A template lease pulled off the internet needs to be reviewed against this list before anyone signs it.
Lead Paint Disclosure for Pre-1978 Properties
Federal law requires landlords renting housing built before 1978 to disclose any known lead-based paint or lead hazards before the tenant signs the lease. You must provide all available records and reports about lead paint on the property and give the tenant a copy of the EPA pamphlet “Protect Your Family From Lead in Your Home.” Both parties sign a disclosure form confirming the information was provided.16eCFR. 24 CFR Part 35 Subpart A – Disclosure of Known Lead-Based Paint and/or Lead-Based Paint Hazards Even with no knowledge of lead paint in the building, you still complete the disclosure and state that on the form.
Any renovation, repair, or painting work that disturbs painted surfaces in a pre-1978 rental has to be done by a lead-safe certified contractor under the EPA’s Renovation, Repair and Painting rule. This applies to landlords doing their own maintenance on rental property. The homeowner exemption only covers work on a home the owner personally lives in, not rentals.17US EPA. Lead Renovation, Repair and Painting Program This is one federal requirement that landlords with older Michigan housing stock routinely overlook.
Fair Housing and Tenant Screening
The federal Fair Housing Act makes it illegal to refuse to rent, set different terms, or otherwise discriminate based on race, color, religion, sex, disability, familial status, or national origin.18Office of the Law Revision Counsel. 42 USC 3604 Michigan’s Elliott-Larsen Civil Rights Act adds further protections. In practice, you cannot advertise “no children,” set occupancy standards stricter than the local occupancy code, or refuse reasonable accommodations for tenants with disabilities.
Criminal background screening is a common trip wire. HUD guidance recommends against blanket bans on applicants with any criminal history. You cannot deny housing based solely on an arrest record, and any criminal history screening has to be applied consistently to every applicant. If you do consider criminal history, evaluate each applicant individually based on the nature and severity of the offense and the time that has passed. A policy that looks neutral but disproportionately excludes a protected class can still violate fair housing law.
Adverse Action Notices
If you reject a rental applicant based in whole or in part on information from a credit report or background check, federal law requires you to provide an adverse action notice. It must include the name, address, and phone number of the consumer reporting agency that provided the report, a statement that the agency did not make the decision and cannot explain the reasons for it, and notice of the applicant’s right to dispute the report’s accuracy and to request a free copy within 60 days.19Office of the Law Revision Counsel. 15 USC 1681m This applies even when the report was only one factor in your decision. A written notice gives you proof of compliance.
Reporting the Rental Income
Rental income gets reported on Schedule E (Form 1040), where you list revenue and deduct allowable expenses such as mortgage interest, property taxes, insurance, repairs, and depreciation.20Internal Revenue Service. About Schedule E (Form 1040), Supplemental Income and Loss If you own the property through an LLC or partnership, the entity may need its own Employer Identification Number and separate return. Individual landlords typically do not need an EIN unless they have employees, though one can simplify opening a dedicated bank account for rental income.
Residential rental property is depreciated over 27.5 years using Form 4562. When you later sell, any depreciation claimed (or that could have been claimed) is recaptured as taxable income, so tracking depreciation from the first year protects you at sale. IRS Publication 527 covers the details.