Make Buying Michigan REO Homes to Rent Easier by Knowing Landlord and Tenant Laws
If you’re planning to purchase an REO property in Michigan for rental income, be sure to find out what rights you have as a landlord, as well as what laws there are to protect tenants. When buying a foreclosed home to rent out, the first thing you’ll want to do is find out if the home is currently occupied. If it is, the current tenant will have rights, and you’ll need to find out what they are. Rights to remove tenants are different when a home is foreclosed on than they are when the owner voluntarily sells the home.
Start with the federal laws. Those will usually trump most state laws, unless the state laws are more in favor of protecting the tenants. When you buy a foreclosed home that is occupied, make sure you understand how the occupants are protected under The Helping Families Save Their Homes Act of 2009. If the current tenants were not the owners who were foreclosed on (or family members of the owners), you’ll need to give them 90 days notice of eviction if they were renting month-to-month. However, if they signed a lease, then you will have to allow them to stay until the end of their lease. An exception to this is if you are planning to live there yourself, in which case, you just need to give the tenants 90 days notice of eviction.
Once you’ve figured out what to do about the current renters, it’s up to you to decide whether to sign a new lease with those same renters or find new renters. In either case, you will have certain responsibilities as a landlord, and those will vary by state. Here are some things to keep in mind if you’re planning to become a landlord in the state of Michigan:
- In Michigan, landlords must start the eviction process by filing a “Notice to Quit”, which will determine the number of days a landlord must give to a tenant to make them aware of eviction prior to filing a complaint and summons. The minimum length of a “Notice to Quit” is seven days for nonpayment of rent. The minimum length of a “ Notice to Quit” for termination of a lease is usually thirty days. The landlord can then file a complaint and deliver a summons to the tenant. After ten days, if the tenant has not vacated the premises, a “writ of restitution” is produced by the court sheriff, which will restore full possession to the landlord.
- If you’re a landlord and fail to notify your tenant with a notice of damages within thirty days after lease termination, you must immediately refund the full security deposit to the tenant, and no damages are due. If you feel that you have a disputed case to claim the security deposit or charges, you have forty-five days after termination of occupancy to file a suit against the tenant. Learn more about security deposit laws in Michigan.
- You, as the new property owner, are responsible for the maintenance and upkeep of the property. Be sure to respond within a suitable amount of time and address any legitimate issues appropriately. In fact, be proactive when you first take ownership and ask the tenants if everything is working properly. For more information about maintenance responsibilities and rights to inspect, read about the Landlord Right of Entry Laws in Michigan.
- In most cases, you can raise rent in Michigan as you choose, but there are some rules, such as you have to give the tenant, you guessed it, written notice. Here are some other rules surrounding raising rent in Michigan.
- An important Michigan state law to keep in mind when buying a foreclosure home in Michigan is one that gives borrowers whose homes are foreclosed on a statutory Right of Redemption. This means that the borrower who lost his or her home to a foreclosure has the legal right to buy back the home within one year if they pay off the full amount owed at the time of foreclosure, as well as any other liens, taxes, interest, and fees incurred by the lender to foreclose on the home.
Of course, there is a lot more information out there to be learned. Make sure you are diligent about learning your rights and your tenants’ rights at the federal, state, and local level. Renting out a property can be a great investment, but you have to know the property and laws before you really know what you’re getting yourself into as a landlord and an investor.
Links to More Information about Federal and Michigan Rental Laws:
Get more info about tenant and landlord laws in Michigan
Read about tenant rights, laws, and protections in Michigan on HUD.gov
Check out the National Low Income Housing Coalitions’ Renters in Foreclosure Toolkit
Thanks for the information on the “Notice to Quit”. It makes a lot of sense, and knowing the process in advance makes it so much easier when the need arises to evict a tenant.
The advantages of renting to buy a house. There are advantages for both the landlord and the lessor. If the buyer does not have the bank or credit worthiness to get a bank loan but is still wanting to be a home owner then a rent to buy deal is a great opportunity.