Mich. Comp. Laws § § 554.604
Security deposit, disposition; bond.
Operative Text
Sec. 4. (1) The security deposit shall be deposited in a regulated financial institution. A landlord may use the moneys so deposited for any purposes he desires if he deposits with the secretary of state a cash bond or surety bond written by a surety company licensed to do business in this state and acceptable to the attorney general to secure the entire deposits up to $50,000.00 and 25% of any amount exceeding $50,000.00. The attorney general may find a bond unacceptable based only upon reasonable criteria relating to the sufficiency of the bond, and shall notify the landlord in writing of his reasons for the unacceptability of the bond. (2) The bond shall be for the benefit of persons making security deposits with the landlord. A person for whose benefit the bond is written or his legal representative may bring an action in the district, common pleas or municipal court where the landlord resides or does business for collection on the bond.
Under MCL § 554.604, security deposits collected by a landlord must be held in a regulated financial institution. As an alternative, a landlord may use those funds freely if a qualifying cash or surety bond—covering the full amount up to $50,000 and 25% of any amount above that—is filed with the Michigan Secretary of State and found acceptable by the Attorney General. The bond exists for the direct benefit of tenants who paid the deposits, and those tenants (or their legal representatives) may sue to collect on it in district, common pleas, or municipal court.
Plain English — not legal advice.
MCL § 554.604 gives landlords two compliant paths for handling security deposit funds: keeping them in a regulated financial institution, or filing an approved cash or surety bond with the Secretary of State. Operators who choose the bond route typically ensure the bond is written by a Michigan-licensed surety company and covers the full statutory amounts before using the deposited funds for other purposes. Because the Attorney General can reject a bond based on its sufficiency, compliant operators generally confirm acceptance before treating the bond as a substitute for segregated deposit accounts.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
MCL § 554.604 requires that your security deposit either be held in a regulated financial institution or secured by a bond filed with the Secretary of State for your direct benefit. If a landlord uses the bond option and fails to honor deposit obligations, you or your legal representative may bring a court action to collect on that bond in the district, common pleas, or municipal court where the landlord resides or does business. Tenant-rights organizations in Michigan can help you understand what records to request and what options may be available if you believe this provision has not been followed.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 13, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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