The Michigan sublease agreement is a legal contract that allows a tenant to rent out all or a portion of the property to a subtenant in exchange for regular payments.
Does a Tenant Need the Landlord’s Permission to Sublet in Michigan?
A Michigan tenant does need to receive a landlord’s explicit written permission to sublet. Even after consent is given, a landlord still has the right to reject a subtenant if they are unqualified, such as for having a criminal history or low income.
Standardized Michigan Sublease Agreements
Here’s what is generally included in a Michigan sublease agreement:
- The Names of the Parties – The original tenant under the lease is named in the sublease and is called the “Sublessor”. The third-party that is subleasing the rental unit is named in the sublease and is called the “Sublessee”.
- Term – State the exact date of the sublease beginning and ending date.
- Rent – How much the rent is, when it needs to be paid, and how to pay it.
- Rental Unit Location – The address for the rental unit as described in the original lease.
- Master Lease Inclusion – A copy of the Master Lease is attached to the sublease. If any exceptions in the Master Lease are not included they should be clearly stated in this section.
- Lead-Based Paint Notice – Under Federal law, if the rental unit’s premises were built before 1978, the Sublessee must be given a written warning notice, called a Lead-Based Paint Disclosure.
- Truth in Renting Act Notice – The notice must state “NOTICE. Michigan law establishes rights and obligations for parties to rental agreements. This agreement is required to comply with the Truth in Renting Act. If you have a question about the interpretation or legality of a provision of this agreement, you may want to seek assistance from a lawyer or other qualified person.” This notice must be no smaller than size 12-point type, or be in legible print with letters not smaller than 1/8 inch (Mich. Comp. Laws §554.634).
- Rights of Domestic Violence Victims – Michigan landlords must have a provision in their lease agreements stating, “A tenant who has a reasonable apprehension of present danger to him or her or his or her child from domestic violence, sexual assault, or stalking may have special statutory rights to seek a release of the rental obligation under MCL 554.601b.”
- Liability – The sublessee will be liable for any damages to the Sublessor. The Sublessor continues to have the ultimate responsibility to pay for any damages that impact the landlord as stated in the original lease agreement.
- Authorized Occupants – This identifies the new tenant(s) and those that are authorized to live in the rental unit including any policy about short-term guests.
- Security Deposit – Michigan law limits the maximum security deposit to one and one-half month’s rent. This security deposit is held by the Sublessor (not the landlord).
- Pet Deposit – Landlords can charge a pet deposit, except for service dogs and emotional support animals. However, the total security deposit cannot exceed one and one-half month’s rent.
- Return of Security Deposit – Michigan landlords have 30 days after the tenant vacates the rental unit to return the security deposit.
- Disputes – A description of how disputes between the Sublessor and Sublessee are to be settled, which may include mediation and binding arbitration to avoid more expensive legal proceedings.
- General Conditions – A statement that the written sublease agreement contains all of the agreements between the parties and can only be modified by written consent of the parties to the agreement.
- Inventory of Included Items – The list of items in the rental unit that are part of the sublease (furniture or appliances).
- Utilities – The utilities to be paid by the Sublessor and those that are to be paid by the Sublessee.
- Smoking Policy – If smoking is restricted in the rental unit and any designated smoking areas are identified in the sublease.
- Landlord’s Consent – This section describes how the landlord is asked to give permission (if permission is not already included in the Master Lease). Tenants may create a signed sublease that is conditional on being accepted by the landlord before the sublease becomes effective.
- Signature: The signature and date for the Sublessor, the Sublessee, any Co-Sublessors, and Co-Sublessees (if they exist), and the signature of the Landlord giving consent to the sublease.
Tax Implications of a Sublease in Michigan
Short-term rentals of 30 days or less in Michigan are subject to the Use Tax and Lodgings Tax. Additional taxes may be charged depending on location. For example, in Kent County, taxes include:
- Michigan State Use Tax – 6%
- Hotel-Motel Tax – 5%
