Security Deposit Alternative in Michigan
Michigan caps a security deposit at one and a half months' rent and gives you 30 days after occupancy ends to mail an itemized list of the damages you are claiming, with the estimated repair cost of each item and a check for the balance. The part that catches people comes next. You generally cannot keep any of a disputed deposit unless you have first gone to court and obtained a money judgment for it, and you have 45 days from the end of occupancy to start that action.
What Michigan law says about security deposits
Read from the Michigan statute on 2026-09-09. Deposit rules change, and this is general information rather than legal advice. Confirm the current text with your own counsel before you change a lease.
Can you require it of every Michigan resident?
Michigan has no statute written for a monthly fee charged instead of a deposit, so the arrangement rests on your lease and the general deposit rules. What makes Michigan distinctive is how hard the deposit is to actually use. Section 554.613 gives you 45 days after occupancy ends, and not a day more, to start an action for a money judgment on the damages you are claiming, and says a landlord is not entitled to retain any part of a deposit for claimed damages without first obtaining that judgment. The exceptions are narrow: the resident failed to give a forwarding address, or failed to respond to your notice of damages. A deposit you cannot keep without going to court is a weaker instrument than its size suggests.
Rules differ by state and by city, and subsidized housing is its own question. This is general information for property managers, not legal advice. Get a written opinion before you make the fee a condition of tenancy anywhere.
How the program works in Michigan
The mechanics are the same in every state Beagle operates in. The program is designed to comply with applicable state and local regulations, and the rate is set by the deposit amount rather than by geography, so a Michigan property and one two states over are quoted the same way.
The resident chooses at signing
Instead of producing the full deposit, the resident pays a smaller non-refundable monthly fee that is billed with rent. Nothing is held, so nothing has to be returned.
The property keeps its protection
Damage beyond normal wear is reimbursed up to the deposit amount the unit would otherwise have required, so what you can recover does not shrink.
Move-out stops being a negotiation
A claim is filed against the program rather than deducted from money you are holding, which takes the itemised-deduction letter and the dispute that follows it off your team's desk.
You earn on every resident who takes it
You set an administrative fee on top of the premium, up to $5 per unit per month, and keep it.
Michigan security deposit alternative FAQs
Because the cap is not the hard part in Michigan. Keeping a disputed deposit generally requires a money judgment first, and the action to get one has to be filed within 45 days of occupancy ending. A deposit alternative moves recovery out of that process without lowering what the property can recover.
Security deposit rules in other states
See it on your Michigan units
Run the program against your own unit count, or walk through it with our team. No upfront fees, no onboarding charges, no long-term contracts.