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Whether you're a seasoned landlord or a first-time property owner, figuring out the ins and outs of security deposits can be a hard situation. One wrong move can destroy the delicate trust you and your tenants have.
Luckily, we can help you out.
Let's go through how to handle security deposits in Auburn Hills.
Know the Laws
When handling security deposits at your Auburn Hills properties, it's crucial to be familiar with Michigan's landlord-tenant laws.
In Michigan, landlords can generally charge up to one and a half month's rent as a security deposit. Check local regulations to ensure compliance.
Keep the security deposit in a distinct escrow account. Michigan law requires landlords with more than six rental units or landlords who have held a tenant's security deposit for at least one year to pay the tenant interest on the deposit.
Document Property Condition
Documenting the condition of your Auburn Hills properties is a crucial step in handling security deposits. This documentation serves as a reference point to assess any damages and determine if deductions are necessary.
Before a new tenant moves in, conduct a thorough inspection of the property. Take note of the condition of each room, including walls, floors, ceilings, appliances, fixtures, and any existing damages.
It's advisable to use a checklist for consistency. You'll want to perform tenant screenings, too, to ensure you have responsible tenants moving in.
When a tenant is moving out, conduct a final inspection. Use the move-in inspection form as a reference. Compare the current condition with the documented move-in condition to identify any new damages. You also may want to take photos before and after.
Have It in Writing
Include detailed provisions in your lease agreement. Cover important aspects such as the amount of the deposit, how it will be held, the conditions under which deductions may be made, and the timeline for returning the deposit.
Clearly state the amount of the security deposit and its purpose in the lease agreement. Indicate whether it covers potential damages, cleaning fees, or any other specific uses.
Clearly define the tenant's responsibilities regarding reporting damages, maintenance issues, and the general upkeep of the property. This can help establish expectations for care and maintenance during the lease term.
Get Professional Help
You don't have to struggle with security deposit management all on your own.
Consider hiring a reputable property management company with experience in the Auburn Hills area.
Property managers are often well-versed in local laws, and they can handle various aspects of property management, including lease agreements, inspections, and security deposits.
Connect with other landlords in the Auburn Hills area. Sharing experiences and insights can be valuable, and you may learn about local nuances and best practices. Local landlord groups or online forums can be good resources for networking.
Handle Security Deposits With Ease Today
Handling security deposits when you don't know what you're doing can be tricky. With these tips, you should be able to get the hang of it in no time.
Do you need more help taking care of your Auburn Hills properties? PMI Great Lakes's property managers are dedicated to providing top-quality services. Contact us today.
