Laws on a Business Lease Eviction & Renter's Rights in Michigan

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The State of Michigan commercial lease laws follow the same protocol as residential lease laws pertaining to evictions and anti-discriminatory renter’s rights. A Michigan commercial property lease agreement itself, however, has requirements that differ from those of a residential lease. Tenants – whether residential or commercial – enjoy certain rights under state law, such as civil rights and protection from illegal discrimination.

Commercial vs. Residential Leases

A basic commercial lease agreement in Michigan must only contain four parts: the property that’s being leased, the parties to the lease, the amount of rent under the lease and the term of the lease. Although the parties in a residential lease must follow strict statutory and common law mandates, parties in a commercial lease are allowed broader governing guidelines. For example, the Landlord and Tenant Relationship Act and the Truth in Renting Act, both of which govern the rights, duties and obligations between residential tenants and landlords, do not afford these same rights to commercial tenants and their landlords.

Two primary distinctions between commercial and residential leases are the treatment of security deposits and the responsibility for the condition of the premises.

  1. Security deposits. The same strict regulations for residential security deposits are not required for commercial leases. A landlord can require a commercial tenant to produce an “evergreen” security deposit, which must be replenished if the landlord has to use part of the original deposit to repair damage or cure a default.
  2. Condition of premises. Although residential landlords typically are responsible for maintaining their rental properties, commercial landlords generally do not have this responsibility. Commercial tenants rent their properties with no implied guarantee of suitability for the intended commercial purpose.

Michigan Tenant Rights

Landlords cannot discriminate against commercial tenants by violating their civil rights. Renter’s rights cannot be denied a commercial tenant because of age, gender, race, religion, national origin, marital status or disability.

Examples of discriminatory acts by landlords include refusing to show a commercial rental space that’s available, falsely telling a prospective tenant that no rentals or a particular rental property is unavailable, quoting a different price to different tenants, or asking for a different payment structure from different tenants, harassment, intimidation or making threats.

Michigan Tenant Rights No Lease

Although a commercial lease does not actually grant ownership to the renter, the property it covers essentially is treated the same as a sale during the lease term. And if a commercial tenant does not have a lease, some common law requirements govern the tenancy.

For example, Michigan landlord entry laws for commercial properties without a lease follow the default rule that the landlord does not have the right to enter the property or inspect it. If a landlord wants to reserve this right, she must negotiate the terms with the tenant and draft the provision into a written lease.

Michigan Eviction Process

Section 600.5714 of the Michigan Code is the legal mandate for eviction proceedings, whether residential or commercial, which must follow the process known as Summary Proceedings. Lawful reasons for eviction in the State of Michigan include nonpayment of rent, violation of a lease provision in a lease that allows termination for the violation, holding over (continuing to remain in a rental past the term of the lease without the landlord's consent), and illegal drug activity on the premises (as documented in a formal police report).

Before a Michigan court will grant a landlord’s request for Order of Eviction, the landlord must serve the tenant a proper eviction notice. After serving notice, a landlord must wait either seven or 30 days, depending on the reason for an eviction, before he can file an eviction lawsuit against the tenant. A seven-day notice must be given, for example, for nonpayment of rent. A 30-day notice must be given, for example, when a tenant is holding over after her lease has expired.

A Summary Proceedings action, the official name for an eviction lawsuit, begins when the landlord files certain forms, including the Complaint and Summons, in district court or municipal court, depending on where the property is located. After the paperwork also has been delivered to the tenant, the tenant must answer the Complaint by the date noted on the Summons, which is typically only three to 10 days. If the tenant fails to appear, the judge will issue a default judgment (the landlord can evict). If the tenant does appear, she can present her case for the judge's ruling.

References

About the Author

Victoria Lee Blackstone was formerly with Freddie Mac’s mortgage acquisition department, where she funded multi-million-dollar loan pools for primary lending institutions, worked on a mortgage fraud task force and wrote the convertible ARM section of the company’s policies and procedures manual. Currently, Blackstone is a professional writer with expertise in the fields of mortgage, finance, budgeting, tax and law. She is the author of more than 2,000 published works for newspapers, magazines, online publications and individual clients.

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