How can a landlord properly collect a security deposit?

In Michigan, a landlord must properly collect a security deposit from a tenant in order to ensure that the tenant is able to pay damages to the landlord’s property in case of any unexpected costs. In order to do this, the landlord must provide the tenant with a written statement that outlines the terms of the security deposit. This statement needs to include the amount of the security deposit, the tenant’s legal rights, a list of all charges that could be deducted from the security deposit, and the name, address, and phone number of the financial institution where the security deposit is being held. The landlord must also provide the tenant with a receipt for the security deposit upon receipt of the funds. The receipt must include the date and amount of the security deposit, the name and address of the landlord, and the address of the property for which the security deposit is being collected. Within 14 days of receiving the security deposit, the landlord must also provide the tenant with a written confirmation of the security deposit amount and the address of the financial institution where it is being held. This confirmation must also provide the tenant with a list of all of the acceptable amounts that could be deducted from the security deposit and the tenant’s right to receive remaining funds upon moving out. Finally, the landlord must provide the tenant with a written itemized list of all deductions from the security deposit at the end of the tenancy. This list must include the description, amount, and date of each amount deducted, and it must be signed by both the landlord and tenant. If the landlord fails to provide this list, then the tenant may be able to keep the full security deposit.

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How can a landlord properly collect a security deposit?

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