What is considered a Security Deposit?
Any prepayment of rent (other than the first full month’s rent) is considered part of the security deposit. In addition, any Refundable fees – by definition- are deemed “security deposits”. Nonrefundable fees are not; and they can be assessed in any amount and for any reason but the reason for the fee must be made clear. A nonrefundable fee may not cover anything already covered by a refundable fee. In the state of Michigan, a security deposit is not to exceed 1 1/2 times the monthly rent. EXAMPLE: If the monthly rent is $600 than the maximum the landlord can receive for a security deposit is $900 ($600 x 1.5 = $900).
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