The term tenant screening is used in the rental property industry as the way in which tenants are reviewed for occupancy within a property. Tenant screening is essential for landlords to find the right individual to rent their property. In the state of Michigan, there are tenant screening laws in place that must be understood in order to correctly check the background of a potential tenant as well as stay within legal boundaries during screening.
Tenant Screening Laws of Michigan
The laws regarding tenant screening in Michigan will vary to other states, so when investing in rental properties in the region, you want to learn more about their particular laws. In Michigan, landlords can charge whatever they like for the application process. There is no maximum limit set on fees. For security deposit, there is a maximum amount. A landlord cannot ask for more than one and one-half times the monthly rent amount.
Landlords also have restrictions on funds collected. Application fees and security funds are considered different funds, so they cannot co-exist. There should be separate accounts in place for these funds. An application fee is nonrefundable while security deposits can be returned based on the condition of the property, so it is important to make sure the two do not mix.
Consider Your Screening Process
When it comes to screening tenants, you want to have a set list in place. This list will be used every time you consider an application for occupancy. Such items on your list could include no smoking, no pets, no history of criminal activity, never been evicted, income to debt ratio, etc. It is also important for landlords to never discriminate against anyone that is filling out an application for rent.
Hud.gov has a list of protected classes where discrimination is defined. Individuals should not be discriminated against based on religion, national origin, race, color, disability, sex or having children. Be sure to follow these guidelines to be a good landlord and build a reputation as a fair rental property owner.
By learning the tenant screening laws of Michigan, you will be better able to be a success with the property you own in the state.