Real estate

Michigan lease agreement template

Renting out a commercial or residential property in Michigan? You'll need a contract in place first.

Our templates are for general information only. You should not rely on them, and Juro is not liable for any reliance on them. The templates might contain errors, including unlawful provisions and might create risks and liabilities if used. The templates are not legal advice, nor a substitute for it. By accessing any template, you accept these terms and agree that any use is at your own risk. Some of these templates were created using generative AI with human-assisted prompts.

What is a Michigan lease agreement?

A Michigan lease agreement is a legal document that outlines the terms and conditions for renting residential or commercial property in Michigan.

This agreement governs the relationship between a landlord and tenant, along with other important details, like the duration of the lease, rental payments, security deposits, maintenance responsibilities, and more.

But before we get into the contents of a Michigan lease agreement, let's first look at the real estate landscape in the state.

Real estate and leasing trends in Michigan

Before entering into a lease agreement, Michigan-based landlords should familarise themselves with the market and understand the environment they're leasing in. Here are a few stats to get started with:

According to Redfin, the number of residential properties for sale in Michigan increased more than 18 per cent in 2024, compared to 2023.
The median rent sits around around $2,150 per month in Michigan, according to Zillow.
There are more than 3.8m residential properties in Michigan, and more than 300,000 commercial properties, according to ATTOM.
It's estimated that 70 per cent of Michigan residents own their homes, while 30 per cent lease properties.
The Central Michigan region, near Mount Pleasant, has witnesses the largest increases in average sales prices in 2024, jumping nearly 30 per cent.
Michigan is described as having an 'acute housing shortage', which is worse than the national average in the US.

Which laws in Michigan are relevant to lease agreements?

Leasing in Michigan is governed by several state-specific laws that ensure fair practices and protect the interests of both landlords and tenants.

Understanding and adhering to these laws is crucial for drafting a compliant and effective lease agreement, so let's run through the most relevant provisions in more detail now.

Michigan Truth in Renting act

The Michigan Truth in Renting Act regulates the content of lease agreements in Michigan to make sure they are both transparent and fair, which prevents landlords from including illegal or unfair provisions.

For example, this legislation outlines puts a ban on certain types of clauses in a Michigan lease agreement, including:

Clauses that limit the landlord’s liability for injuries on the property due to the landlord’s negligence.
Clauses that require tenants to waive their right to a jury trial.
Clauses that shift responsibility for repairs required by law onto the tenant.

Michigan Landlord-Tenant Relationships Act

The Michigan Landlord-Tenant Relationships Act outlines the overall framework for landlord-tenant relationships, focusing on responsibilities, lease termination, and security deposits.

On security deposits, the act states that a landlord may not collect more than 1.5 times the monthly rent as a security deposit, and that all deposits must be placed in a regulated financial institution, too.

When it comes to returning the deposit, the landlord has 30 days to return the deposit or send an itemized list of damages (with costs). The tenant then has seven days to dispute any charges.

Michigan Anti-Lockout Law

Michigan also has a law that makes it illegal for landlords to evict tenants or reclaim possession of a property by means other than the court system.

Under this law, landlords cannot change the locks without first obtaining a court order, or shut off utilities to force a tenant out of the property.

Instead, the landlord must follow the proper legal eviction process by providing the tenant with proper notice and filing an eviction lawsuit in court, also known as a summary proceeding.

There are also a series of other laws and regulations placed on leases in Michigan, including the Fair Housing Act (a federal law), Michigan's lead based paint disclosure law, and more.

You should always speak to a legal professional to make sure you've covered all bases and protected your interests.

Why is lease agreement important in Michigan?

As you've just heard, lease arrangements are heavily regulated in Michigan, and there are high expectations on landlords and tenants to draft, agree, and later abide by a fair and transparent lease agreement.

But the importance of a lease agreement in Michigan goes beyond just the laws they're governed by. It affords certainty, security, and clarity to landlords and tenants, meaning they can align on their expectations of one another and have a long-term, smooth relationship overall.

Who manages Michigan lease agreements?

In Michigan, lease agreements are typically managed by several different parties who each play a role in making sure these contracts are clear, enforceable, and legally compliant:

‍Landlords who lease their property to tenants – are responsible for creating, maintaining, and enforcing the lease agreements
‍Property managers are often hired by landlords to handle the day-to-day management of rental properties, including drafting and managing lease agreements, collecting rent, and addressing tenant issues.‍
Real estate agents may assist landlords and tenants in finding rental properties and can also help in preparing and reviewing lease agreements.‍
Legal professionals should be asked to provide advice, draft lease agreements, and help resolve disputes related to lease terms and conditions (if they arise).

Common types of lease in Michigan

Residential leases

When a landlord rents out a house, apartment, or other residential property to a tenant, it is considered a residential tenancy agreement.

These agreements are the most common type of lease in Michigan and these leases must comply with Michigan's Truth in Renting Act, ensuring the agreement doesn't contain illegal provisions that limit tenants' rights.

Residential lease agreements in Michigan can either be a fixed lease (e.g, 12 months), or a month-to-month lease which offers greater flexibility for the landlord and tenant.

Commercial leases

When a landlord leases commercial property, such as office space, retail stores, or industrial buildings, to a business tenant, a commercial lease agreement is used.

These leases tend to be more complex than residential leases due to the nature of business use and the different risks involved. They also tend to have a higher contract value.

These types of Michigan lease tend to fall into two main categories:

Gross lease: where the tenant pays a fixed rent, and the landlord covers all property-related expenses like taxes, insurance, and maintenance.
Net lease: where the tenant pays rent plus some or all of the property-relate expenses.

These Michigan lease agreements also tend to have a longer contract duration than residential ones.

Short-term leases

Short-term rentals are leases that cover a brief duration, such as month-to-month rentals or vacation rentals. In Michigan, these types of leases are increasingly common for properties listed on platforms like Airbnb or Vrbo.

Short-term rental agreements are typically more streamlined than long-term leases but still provide essential protections for both parties, especially regarding payment, property condition, and liability.

Rent-to-own leases

A lease-to-own agreement (also called a rent-to-own or lease-option agreement) allows a tenant to lease a property with the option to purchase it after a certain period.

These agreements combine a standard lease with an option to purchase, and they include specific terms that outline:

Option to purchase: The tenant has the right (but not the obligation) to purchase the property at a later date, often after renting for a specified period (e.g., one to three years).
Rent payments and option fee: Typically, the tenant pays an option fee (which is usually non-refundable) for the right to purchase the property later. Part of the rent may be credited toward the future purchase price.
Purchase price: The purchase price may be agreed upon when the lease is signed or determined at a later date based on market conditions.

What should a Michigan lease agreement template include?

A Michigan lease agreement template should include the following key elements:

‍Parties involved: Names and contact information of the landlord and tenant(s).‍
Property description: Detailed description of the rental property, including the address and any specific unit or apartment numbers.‍
Lease term: Start and end dates of the lease, including any provisions for lease renewal or lease cancellation.‍
Rent details: Amount of rent, due date, acceptable payment methods, and any late fees or penalties for missed payments.‍
Security deposit: Amount of the security deposit, conditions for its return, and any deductions that may be made for damages or unpaid rent.‍
Utilities and services: Information on which utilities and services are included in the rent and which are the tenant's responsibility.‍
Maintenance and repairs: Responsibilities of both the landlord and tenant for maintaining the property and handling repairs.‍
Use of property: Permitted uses of the property, including any restrictions on activities or alterations.
Rent escalation clause: Include a provision for how and when the landlord can raise the rent, especially if it's a long-term lease.‍
Occupancy limits: Maximum number of occupants allowed to live in the rental unit.
Automatic renewal clause: Specify if the lease will automatically renew unless terminated by either party or if a new agreement will be needed.‍
Pet policy: Rules regarding pets, including any pet deposits or additional fees.
Landlord access: Detail the circumstances under which the landlord or property manager can enter the rental unit (e.g., for inspections, repairs, emergencies). Michigan law generally requires at least 24 hours’ notice unless it’s an emergency.
Tenant alterations: State whether the tenant is allowed to make any alterations to the property (e.g., painting walls, installing fixtures), and if permission is required in advance.
Renter’s insurance: Some landlords require tenants to carry renter’s insurance. If applicable, this should be mentioned, including the required coverage amount.
Landlord’s insurance: Clarify what is covered by the landlord’s insurance (e.g., damage to the building itself but not to the tenant's personal property).
Property rules: If applicable, outline any specific rules for living on the property (e.g., quiet hours, rules for shared spaces, parking policies, smoking policies, etc.).
Subleasing: Conditions under which subleasing is allowed, and how a separate sublease agreement should be set up if so.‍
Lease termination: Procedures and notice requirements for terminating the lease by either party.‍
Legal requirements. Additional clauses that comply with Michigan state laws, such as disclosures required by law and tenant rights.‍
Signatures: Signatures of all parties involved, along with the date of signing.

How are Michigan lease agreement templates usually managed?

Michigan lease agreement templates are usually managed through a series of manual steps involving creation, customization, execution, and storage. Here’s how a manual approach typically works:

1. Creation

The landlord or property manager obtains a standard lease agreement template, which can be sourced from legal form providers, real estate associations, or attorneys.
The template is reviewed to ensure it complies with Michigan state laws and includes all necessary provisions.

2. Customization

The landlord or property manager fills in the specific details of the lease – such as the names of the parties involved, property address, lease term, rent amount, and any special conditions or clauses.
Customizations are made to address the unique needs or agreements between the landlord and tenant, such as pet policies, utility responsibilities, or maintenance duties.

3. Review

The completed lease agreement is reviewed by both the landlord and the tenant to ensure all terms are understood and agreed upon.
Any necessary changes are negotiated and made to the document.

4. Execution

Once both parties are satisfied with the terms, they sign the contract.
Typically, this involves both parties meeting in person to sign the physical document.
If an in-person meeting is not possible, the document may be signed and exchanged via mail or scanned and sent electronically for signature.

5. Distribution

After the lease is signed, copies are made for all parties involved.
The landlord retains the original signed document, while the tenant receives a copy for their records.

6. Storage

The landlord or property manager stores the original lease agreement in a secure location, such as a file cabinet or safe.
It is important to keep the lease document accessible for reference throughout the lease term, especially if issues or disputes arise.

7. Updates and renewals

If any changes need to be made during the lease term – such as rent adjustments or amendments to the lease terms – a written addendum is created, signed by both parties, and attached to the original lease agreement.
As the lease term comes to an end, the landlord and tenant may negotiate a renewal or extension, which involves creating and signing a new lease agreement or an extension document.

8. Compliance and record keeping

The landlord ensures that all lease agreements and related documents comply with Michigan laws and regulations.
Detailed records are kept of all correspondence, payments, maintenance requests, and other interactions with the tenant to ensure transparency and legal compliance.

Challenges of managing Michigan lease agreement templates

The manual approach to managing Michigan lease agreement templates presents several challenges:

Time-consuming: Drafting, reviewing, and customizing lease agreements manually can take a significant amount of time – especially if multiple properties are involved and these are created without a standardized process
Human error: Manual entry and customization of lease details increase the risk of errors, such as incorrect dates, misspelled names, or missing clauses, which can lead to disputes or legal issues.
Storage and retrieval: Physical storage of lease agreements can be cumbersome and take up a lot of space. Retrieving specific documents from a large volume of paperwork can also prove slow and inefficient.
Limited accessibility: Physical documents are not easily accessible to multiple parties. Landlords, property managers, and tenants may need to exchange documents in person or through mail, causing delays.
Lack of standardization: Without a standardized digital template, each lease agreement might vary slightly, leading to inconsistencies that can complicate management and enforcement when these agreements are managed at scale.

How to manage Michigan lease agreements in Juro

Managing Michigan lease agreements can be made more efficient with Juro's AI-native contract management platform.

Here’s how Juro can streamline the process for those leasing properties in the state of Michigan (and beyond).

Automated templates

You can use Juro to create standardized lease agreement templates that comply with Michigan laws and can be varied at scale if and when these laws change.

These automated contract templates can be customized quickly for each new lease, reducing the time spent on drafting documents from scratch.

Juro users can even leverage Juro's legal AI assistant to draft, or redraft, clauses as they deem fit.

Real-time collaboration

Juro's browser-based contract collaboration platform enables you to sync on terms with tenants and other stakeholders directly within the Juro platform, allowing for real-time edits, comments, and contract negotiations.

This makes it quick and easy to get Michigan lease agreements over the line, with streamlined conversations and fewer hurdles along the way.

Version control

Juro automatically tracks changes and maintains version control, so all parties can see the evolution of the document and agree on the final terms.

This solves many of the version-related challenges that landlords and their representatives face today whereby different copies of a lease agreement are distributed in different places, with no single source of truth for amendments and discussions.

Native eSignatures

With Juro, you can execute lease agreements digitally using the built-in eSignature functionality. You can add legally binding signatures to lease agreements on any device, eliminating the need for in-person meetings or physical document exchanges.

Once signed, lease agreements can be instantly distributed to all parties, ensuring everyone has immediate access to the final document.

Centralized repository

You can store all lease agreements (and other real estate contracts) securely in Juro’s centralized, cloud-based contract repository. This makes it easy to access and retrieve documents from anywhere at any time.

You can even use powerful search and filter tools to quickly locate specific agreements or clauses within the platform. Or, set up automated contract reminders for important dates, such as lease renewals, rent due dates, and maintenance schedules, to avoid missed deadlines.

By leveraging Juro’s comprehensive contract management features, landlords, property managers, and real estate professionals in Michigan can significantly improve the efficiency, accuracy, and compliance of their lease agreement processes.

To find out more about how real estate contract management software works, or the benefits you can access, fill in the form below to book a personalized demo.

If your property portfolio extends beyond Michigan, you may benefit from these other free lease agreement templates, too:

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