What Michigan law actually requires
Michigan's security deposit rules live in Mich. Comp. Laws §§ 554.602 through 554.604, and they are specific. The 30-day clock starts when two things happen together: you vacate the premises and you give the landlord a written forwarding address. Both conditions must be met. If you handed back the keys but never gave a forwarding address in writing, the clock has not started. Get that address in writing to the landlord immediately if you haven't already.
Within 30 days of those two conditions being satisfied, the landlord must do one of two things: return your full deposit, or deliver a written, itemized statement of deductions along with whatever balance remains. "Itemized" means each deduction is listed separately with a dollar amount and a stated reason. A vague invoice for "repairs" or "cleaning" without amounts attached does not satisfy the statute.
The law also limits what counts as a lawful deduction. Landlords can withhold for unpaid rent, damage beyond normal wear and tear, and other actual lease violations. They cannot charge for normal aging of the property. Carpet that wore out after four years of tenancy, paint that faded over a long lease, minor scuffs on walls: those are a landlord's cost of ownership, not a tenant's debt.
The interest rule for long tenancies
Michigan adds a wrinkle that most tenants overlook: if your landlord held the deposit for more than one year, that deposit was earning interest the entire time it was in the landlord's account. Under Mich. Comp. Laws § 554.603, landlords who hold a security deposit for longer than one year must pay interest at 5% annually, or the rate paid by the landlord's own bank, whichever is greater. That interest runs from the end of the first year of the tenancy through the date the deposit is returned.
In practice, this means a tenant who rented for three years on a $1,500 deposit is owed not just the $1,500 but also two years of interest on top of it. Most landlords never pay this voluntarily. A demand letter that itemizes the interest owed under § 554.603 alongside the return of the principal sends a clear message: you know the statute, you've calculated the amount, and you're prepared to enforce it.
If the landlord also failed to return the deposit within 30 days, the 4% monthly penalty interest under § 554.604 runs on top of this, and the attorney fees provision means your out-of-pocket cost to pursue the claim is itself recoverable.
The 30-day window and why it matters
Thirty days is a shorter window than many tenants realize, and it runs from a specific event. The day you vacate alone is not enough. Michigan courts have consistently read the statute to require both vacating and written notice of a forwarding address. Once you've done both, document when you did them: a text message or email to the landlord works as written notice and creates a timestamp.
Once the 30 days expire, the landlord's situation changes significantly. They can no longer send a belated itemized statement and avoid penalties. The 4% monthly interest under § 554.604 begins accruing on the full deposit amount from the date the return was due, not from the date you send a demand letter. That means every month of delay after the deadline increases the amount the landlord owes.
A demand letter sent promptly after the deadline captures that accruing interest in the demand amount, which strengthens both the letter and any eventual court filing. Waiting six months to demand costs you nothing in terms of legal rights, but it does mean six more months of watching the landlord sit on your money without formal pressure.
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What you may be owed
Estimate only. Uses your state's return window and bad-faith multiplier. Not legal advice.
Evidence you need before you write
A demand letter without supporting documentation is a threat the landlord can easily ignore. One with a complete paper trail is much harder to dismiss. Before you draft anything, gather the following:
Proof the deposit was paid. A canceled check, a bank transfer record, or a line item on your first month's receipts. The amount matters because the 4% monthly penalty applies to the full deposit figure.
The lease. The signed copy. Michigan courts look at the lease to confirm the deposit amount and whether any deductions were actually authorized by the lease terms.
Move-out date and forwarding address confirmation. The text, email, or letter where you gave the landlord your forwarding address. This is what starts the 30-day clock, and you need evidence of when you sent it.
Move-in and move-out condition records. Any photos or videos taken when you moved in and when you left. Date-stamped images are the single most effective evidence against disputed deduction claims. If the landlord says the carpet was damaged, photos from move-in showing its pre-existing condition end that argument.
The landlord's response, or lack of one. Any itemized statement they sent, any partial payment received, or documented silence past day 30. If they sent a statement, review each deduction: is it for a lawful category, is it itemized, does it include receipts?
Tenancy length. If you rented for more than one year, calculate the interest owed under § 554.603 and include it in your demand.
How to write the Michigan demand letter
Michigan's attorney fee provision changes the calculus for both sides. A tenant who prevails in court recovers not just the deposit and penalty interest but also the cost of legal help. That means a landlord who stonewalls a legitimate demand letter is not just risking the deposit amount. They are risking the deposit, plus 4% monthly interest from day 30, plus whatever attorney fees the court awards. That exposure is worth naming explicitly in the letter.
The letter should be one page. Include the following:
Opening facts. Your name, the rental address, the move-in and move-out dates, the deposit amount, and the date you provided your written forwarding address. These establish the timeline the statute runs from.
Statutory citation. Name Mich. Comp. Laws § 554.602 for the 30-day return requirement and § 554.604 for the penalties. Spell out the numbers. "4% per month from the date the deposit was due" is a specific phrase that signals you have read the statute, not just heard about it.
The demand amount. The principal deposit plus any accrued penalty interest calculated through the demand date. If the tenancy exceeded one year, add the § 554.603 interest. Break the numbers out line by line so the landlord can see the math.
A firm deadline. Ten to fourteen calendar days from receipt is standard. Any longer and the letter loses urgency; any shorter and it looks unreasonable to a court reviewing the record later.
The consequence. State plainly that if the deadline passes without full payment, you will file in Michigan District Court for the principal, the 4% monthly interest, and attorney fees as provided by § 554.604. Do not frame this as a bluff. Frame it as the next step on a calendar.
USPS Certified Mail. Send the final letter by USPS Certified Mail with tracking. Delivery confirmation gives you a precise date of receipt, which is what you'd use to calculate the landlord's deadline if the case ever reaches a judge.
If the landlord still won't pay
If your deadline passes with no response or a partial offer that ignores the penalty interest, your next step is file a Michigan small claims case for your withheld security deposit. Michigan District Court's small claims division handles cases up to $7,000, which covers most deposit disputes including the accrued penalty interest.
The demand letter you sent is now part of your case record. A judge reviewing a deposit dispute where the tenant can show they sent a written, statute-citing demand with a reasonable deadline and got no response has essentially seen the landlord's bad faith in documentary form. The 4% monthly interest keeps accruing through the date of judgment, so filing promptly after the demand deadline passes is worth doing.
What to expect after you send the letter
Most Michigan landlords who receive a statute-citing demand letter respond within the 10 to 14 day window. The most common outcomes, in rough order of frequency:
Full payment. The landlord sends a check for the principal plus however much interest they calculate is owed. Review the math before you cash it. If the check is short, you haven't released your claim, but you do need to document that you received a partial payment.
Partial payment with a disputed deduction. The landlord pays part of the deposit and insists on keeping some amount for alleged damage. At this point, you can negotiate or file for the disputed portion. If the disputed amount is under $7,000, small claims handles it cleanly.
A belated itemized statement. The landlord sends paperwork they should have sent 30 days earlier. An itemized statement sent after the deadline does not undo the penalty. The 4% monthly interest has been accruing since day 30 regardless. You can still accept the remaining balance as a negotiated settlement or proceed to court for the full statutory amount.
No response. This is the strongest evidence of bad faith and the cleanest path to a default-like outcome in court. Document the certified mail delivery date and the silence, file your claim, and let the court record speak for itself.
Sources & further reading
Primary sources
We draft from authoritative statutes and state-court self-help guidance. Every article on Sue.com links to the primary source so you can verify the citation yourself.