On July 1st, 1979, Michigan's Truth In Renting Act went into effect to ensure fair dealing between residential landlords and tenants in lease agreements. Landlords are prohibited from including certain self-serving and arbitrary provisions in written agreements intended to be a waiver of the tenant's legal rights. Furthermore, landlords cannot arbitrarily evict tenants from their residences without going through the judicial process, and they cannot compel the tenants to sign lease agreements waiving those requirements. It is imperative that all tenants understand their rights and all landlords understand their responsibilities under the Truth in Renting Act.
Pursuant to MCL 554.633(1), a written lease is prohibited from including ANY of the following provisions:
- (a) Waives or alters a remedy available to the parties when the premises are in a condition that violates the covenants of fitness and habitability (e.g. lease cannot say that landlord is not responsible for repairs).
- (b) Provides that the parties waive a right established by Michigan law which regulates security deposits (e.g. lease cannot say landlord keeps security deposit after an alleged breach of the lease).
- (c) Excludes or discriminates against a person in violation of Michigan's various civil rights act statutes.
- (d) Provides for a confession of judgment by a party (e.g. lease says tenant has to agree to give up legal rights to go to court in advance).
- (e) Exculpates the lessor from liability for the lessor's failure to perform, or negligent performance of, a duty imposed by law. This subdivision does not apply to a provision that releases a party from liability arising from loss, damage, or injury caused by fire or other casualty for which insurance is carried by the other party, under a policy that permits waiver of liability and waives the insurer's rights of subrogation, to the extent of any recovery by the insured party under the policy.
- (f) Waives or alters a party's right to demand a trial by jury or any other right of notice or procedure required by law in a judicial proceeding arising under the rental agreement (e.g. lease cannot say that landlord can evict you at will).
- (g) Provides that a party is liable for legal costs or attorney's fees incurred by another party, in connection with a dispute arising under the rental agreement, in excess of costs or fees specifically permitted by statute.
- (h) Provides for the acquisition by the lessor of a security interest in any personal property of the tenant to assure payment of rent or other charges arising under the rental agreement, except as specifically allowed by law (e.g. lease says landlord can take tenant's property to cover rent if payments fall behind).
- (i) Provides that rental payments may be accelerated if the rental agreement is breached by the tenant, unless the provision also includes a statement that the tenant may not be liable for the total accelerated amount because of the landlord's obligation to minimize damages, and that either party may have a court determine the actual amount owed, if any (e.g. lease says tenant must pay landlord the rent for the entire year if lease is broken after two months).
- (j) Waives or alters a party's rights with respect to possession or eviction proceedings or with respect to summary proceedings to recover possession as provided under Michigan law.
- (k) Releases a party from a duty to mitigate damages.
- (l) Provides that a lessor may alter a provision of the rental agreement after its commencement without the written consent of the tenant, or, in the case of a rental agreement between a consumer cooperative that provides housing and a member of the consumer cooperative, without the approval of the board of directors of the cooperative or other appropriate body elected by members who are also tenants of the cooperative, except that an agreement may provide for the following types of adjustments to be made upon written notice of not less than 30 days:
- (i) Changes required by federal, state, or local law or rule or regulation.
- (ii) Changes in rules relating to the property that are required to protect the physical health, safety, or peaceful enjoyment of tenants and guests.
- (iii) Changes in the amount of rental payments to cover additional costs in operating the rental premises incurred by the lessor because of increases in ad valorem property taxes, charges for the electricity, heating fuel, water, or sanitary sewer services consumed at the property, or increases in premiums paid for liability, fire, or worker compensation insurance.
- (m) Violates the Michigan Consumer Protection Act, 1976 PA 331, MCL 445.901 to 445.922.
- (n) Requires the tenant to give the landlord a power of attorney.
A provision or clause of a rental agreement that violates this section is void. MCL 555.634(3). In addition, "[a] rental agreement shall not include a clause or provision that, not less than 90 days before the execution of the rental agreement, has been prohibited by statute or declared unenforceable by a published decision of the supreme court of this state or the United States supreme court relating to the law of this state." MCL 555.634(2). Every residential lease agreement in the State of Michigan must include the following mandatory statement in 12-point type font or printed legible letters not smaller than 1/8 inch:
"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 qualified person." MCL 554.634(2).
A landlord can cure a violation regarding a prohibited provision in the lease agreement by providing written notice to the tenant that the prohibited provision is void and unenforceable. MCL 554.635(1). A landlord can cure a violation regarding an omitted mandatory statement in the lease agreement as required by MCL 554.634(2) by giving written notice to the tenant setting forth the mandatory statement. MCL 554.635(2). This notice can be delivered personally, sent by certified mail, or sent by first class mail. MCL 554.635(3).
If a rental agreement contains a prohibited provision, and if the landlord fails to cure the violation by exercising the notice provision within 20 days after the tenant gives written notice to the landlord of the provision believed to be in violation and the reason therefor, then a tenant may bring an action under MCL 554.636(1) for any of the following relief:
- (a) To void the rental agreement and terminate the tenancy.
- (b) To enjoin the lessor from including the provision in any rental agreement subsequently entered into and to require the lessor to exercise the notice procedure to cure the violation in all rental agreements in which the provision occurs and to which the lessor is currently a party.
- (c) To recover damages in the amount of $250.00 per action, or actual damages, whichever is greater.
If a rental agreement fails to contain the mandatory statement or contains an explicit and unambiguous prohibited provision, and if the landlord fails to cure the violation by exercising the notice provisions within 20 days after the tenant gives written notice to the landlord, then a tenant may bring an action under MCL 554.636(2) for any of the following relief:
- (a) To avoid the rental agreement and terminate the tenancy.
- (b) To enjoin the lessor from including the prohibited provision in any rental agreement subsequently entered into and to require the lessor to exercise the notice procedure to cure the violation in all rental agreements in which the provision occurs and to which the lessor is currently a party.
- (c) To enjoin the lessor from failing to include the mandatory statement in any rental agreement subsequently entered into and to require the lessor to exercise the notice procedure to cure the violation.
- (d) To recover damages in the amount of $500.00, or actual damages, whichever is greater.
A tenant may exercise the remedies regarding a prohibited provision or a missing mandatory statement WITHOUT giving any prior notice to the landlord if any of the following circumstances under MCL 554.636(3) apply:
- (a) If a rental agreement contains a provision which has previously been determined by a court of record to be in violation of the Truth in Renting Act in an action to which the lessor was a party.
- (b) If a rental agreement contains a provision which the landlord actually knew was a prohibited provision at the time the rental agreement was entered into. "[A]ctual knowledge" shall be established by written documentation, evidencing the actual knowledge, written or issued by the landlord or an agent of the landlord who is authorized to execute rental agreements or by an admission, evidencing the actual knowledge, made by the landlord or an agent of the landlord who is authorized to execute rental agreements or by showing the landlord has previously given notice relating to the same provision which is the subject of the current action.
- (c) If a rental agreement does not include a mandatory statement and the landlord actually knew that the provision was not included as required at the time the rental agreement was entered into. "[A]ctual knowledge" shall be established by written documentation, evidencing the actual knowledge, written or issued by the landlord or an agent of the landlord who is authorized to execute rental agreements or by an admission, evidencing the actual knowledge, made by the landlord or an agent of the landlord who is authorized to execute rental agreements or by showing the landlord has previously given notice relating to the same provision which is the subject of the current action.
A party who prevails in a legal action in district court under the Michigan Truth in Renting Act is entitled to recover court costs plus statutory attorney fees. MCL 554.636(4). The remedies provided by this Act shall be in addition to any other remedies provided by law, and the provisions of this act shall not limit a person's right to use any other cause of action available under law (e.g. civil rights act, consumer protection act, etc.). MCL 554.638. The responsibilities of the landlord and tenant under this act may not be waived. MCL 554.639.
As a tenant, you want to be sure that you are protected from unfair rental practices and the arbitrary whims of the lessor. As a landlord, you want to be sure that you are in full compliance with the law and your reputation is shielded from false claims of violation. In any event, a skilled attorney can advise and assist you at every step of the process. If you are a party to a residential lease and have questions about the Michigan Truth In Renting Act or any other aspect of property law, do not hesitate to contact the experienced lawyers at Kershaw, Vititoe & Jedinak PLC.