Most residential landlords require tenants to pay a security deposit to cover any repairs needed when the tenant moves out, or to cover the tenant’s failure to pay the last month's rent.

Laws vary from state to state, but many states have statutes that provide the maximum amount of security deposit a landlord may require for a residential lease and the costs for which the landlord may use the security deposit (cleaning, repairs, unpaid rent) following termination of the lease.

These laws also provide a specific deadline (often 30-60 days) for the landlord to return the tenant’s security deposit following termination of the lease—after deducting any amount properly withheld, as allowed by law.

In Michigan, the law governing security deposits for residential leases is the Security Deposit Act (Public Act 348 of 1972). This act stipulates that a landlord may require a security deposit of up to 1.5 times the monthly rent. The security deposit can be used by the landlord to cover damages to the property beyond normal wear and tear, unpaid rent, and unpaid utility bills. Upon termination of the lease, the landlord is required to return the security deposit, or provide a detailed list of damages and the estimated cost of repairs, within 30 days after the tenant has vacated the property. If the landlord fails to comply with this requirement, the tenant may be entitled to recover the full security deposit plus damages and attorney fees. It is important for both landlords and tenants to document the condition of the property at move-in and move-out to support any deductions from the security deposit.