Problem with fees

[leth974]

Jurisdiction

Michigan

Hello. I rented an apartment to a couple back in March. Originally the girlfriend came to look at the property. I explicitly asked if she read the ad correctly and I explained again why

My company with my fiancee charged her $550 for security deposit/ $500 first months rent and $550 for company charges[ Key deposit, cleaning, marketing, file processing, research, staffing for visit etc].

The next month when it was time to pay the boyfriend screamed at me, calling me a thief. He said he had never heard of such a security charge and though he was at the signing of the lease, even then it seemed strange. They said that their payment would go to the next month's rent not the "company charge".

Then I switched my property over to the property manager and explain the situation, the property manager said in all her 19 years she had never heard of a company charge by a private owner and if the tenant wises up I could be taken to court.

I do not believe so. Is there a law in Michigan that says what I did was illegal. In New York my fiancee was charged a fee in addition to rent and security. What is the difference in Michigan? Now my renter is saying they are not behind in rent and are complaining to the property manager.

What is the law on this?

 

[adjusterjack]

I disagree with both the boyfriend and the property manager (never take legal advice from a property manager).

Michigan has no statute addressing non-refundable fees so it doesn't really matter that you called them "company charges" (a little stupid, though, as the rental is not owned by "a company") as long as you itemized the fees and didn't try to hide them.

Michigan has four statutes regarding landlord tenant relationships and you need to be thoroughly familiar with all of them. Again, don't rely on the property manager to get the law right, you'll be the one getting sued if the property manager gets it wrong.

Here they are:

Michigan Legislature - Act 454 of 1978

Michigan Legislature - Act 348 of 1972

Michigan Legislature - Page Not Found.

Michigan Legislature - 236-1961-57

When they default in the rent, you serve the appropriate pay or quit notice and follow up with eviction through the courts if you don't get paid.

 

[army judge]

Hello. I rented an apartment to a couple back in March. Originally the girlfriend came to look at the property. I explicitly asked if she read the ad correctly and I explained again why

My company with my fiancee charged her $550 for security deposit/ $500 first months rent and $550 for company charges[ Key deposit, cleaning, marketing, file processing, research, staffing for visit etc].

The next month when it was time to pay the boyfriend screamed at me, calling me a thief. He said he had never heard of such a security charge and though he was at the signing of the lease, even then it seemed strange. They said that their payment would go to the next month's rent not the "company charge".

Then I switched my property over to the property manager and explain the situation, the property manager said in all her 19 years she had never heard of a company charge by a private owner and if the tenant wises up I could be taken to court.

I do not believe so. Is there a law in Michigan that says what I did was illegal. In New York my fiancee was charged a fee in addition to rent and security. What is the difference in Michigan? Now my renter is saying they are not behind in rent and are complaining to the property manager.

What is the law on this?

You are not in NY.
You are doing business in MI.
Anecdotal stories referencing what allegedly happened to others are useless in your day to day business operations.

Before you ask for the law, why do you believe it is legal for you to charge the equivalent of a month's rent [included in that amount is a charge allegedly to give the renter a key(s)]?

This has little to do with the law in MI, per se.

It has more to do with contract law.

The charges, as your manager (or some manager) told you could get you in deep poopoo.
You are charging your client's customers for something you are being paid to do by the landlord, effectively gouging his/her customers for service for which you are being reimbursed.

The law might call that fraud.

Just because you levy a charge doesn't make it legal.

As suggested by "the manager", you might be best served by not assessing charges the property owner doesn't authorize, and you aren't authorized by operation of law to assess.

This article lists the relevant MI statutes that apply to leases in Michigan.
..
Michigan Rental Laws
..

 

[mightymoose]

I have never heard of anyone doing this either.

You say it was mentioned in the ad, but what is stated in the lease agreement? Is the extra fee clearly listed and defined?

If it is a fee it would typically be collected at the time of signing or before move-in. Did that not happen?

Honestly, the $550 security deposit already should cover the key, cleaning/damage, etc. It is as if you are charging double.

 

[hrforme]

Never seen that before either personally or professionally...whether it is illegal or not, it seems very unethical. And not very smart to try to apply that happen in one state to another. I would expect the deposit and rent to cover your "company charges" -- those are a cost of doing business for the landlord. If your rent isn't high enough to cover those, then increase it by $50 a month.

 

[army judge]

Never seen that before either personally or professionally...whether it is illegal or not, it seems very unethical. And not very smart to try to apply that happen in one state to another. I would expect the deposit and rent to cover your "company charges" -- those are a cost of doing business for the landlord. If your rent isn't high enough to cover those, then increase it by $50 a month.

There are too many rentals available in MI which alone should cause the potential customer to say, thanks, but no thanks.

Many rentals are on the MLS, which might cause the alert prospective tenant to discuss the property with another rental agent.

Barring that, I'd simply take my business elsewhere.

People tend to trust the wrong people too easily.

That allows scammers to steal much more readily.

Bottom line, if you don't like the deal, decline to do the deal and walk away