In October 2026, a Michigan Court of Appeals panel held that a lease signed without a required local rental certificate was void from the start. If you rent property in Michigan, confirm your city or township’s certification rules before you collect another dollar of rent.
The requirement is local, and it is real
Michigan’s Housing Law lets cities, villages and townships run rental inspection programs by ordinance, and MCL 125.526 covers how those inspections and certificates of compliance work. Many municipalities use that authority: owners register the rental, the unit is inspected, and the municipality issues a certificate good for a set period. There is no single statewide certificate, so fees, inspection cycles and penalties differ from one place to the next.
Some examples of how seriously local rules treat it:
- Detroit: According to a landlord-tenant law firm advisory, it is unlawful to collect rent or obtain a nonpayment eviction judgment for any period a rental lacked current registration and a valid certificate. Courts may adjourn a case about 30 days so the owner can get one, and may order rent paid into escrow.
- Pontiac: The city’s tenant toolkit says the ordinance makes it unlawful to allow occupancy or collect rent without a valid certificate, and tenants in such units pay rent into a city escrow account.
What the court decided
An Oakland County tenant and his former landlords sued each other over rent and a security deposit. Both sides agreed the landlords had no permit to lease the home, which was in West Bloomfield Township. According to Michigan Public’s report, a three-judge panel unanimously found the lease invalid from the beginning, with Judge Mark Boonstra writing that renting and occupying the unit was central to the agreement.
The consequences went well beyond a fine:
- Breach of contract claims fell away. With no valid lease, neither side could sue on it.
- The security deposit rules did not apply. The court found the tenant never had a duty to pay the deposit, and the Landlord-Tenant Act covers only deposits held under leases.
- The tenant may still recover money. The ruling left open an unjust enrichment claim, and the case went back to the circuit court.
The landlords’ attorney warned of “chaos” for Michigan contract law. He pointed out that West Bloomfield Township’s penalty for renting without a certificate is a civil fine, and argued the court overreached by voiding the whole lease.
Why it matters for owners and managers
This ruling is based on one township’s ordinance and one set of facts, so how far it reaches is an open question. Still, owners should read it as a warning that a missing certificate can threaten more than a fine. Leases may be unenforceable as written, which could affect rent claims, deposit deductions and renewal terms. A Detroit law firm has argued, in an advisory written before this decision, that a tenant who calls a lease void may end up a month-to-month tenant instead. How courts square that view with this ruling is not yet clear.
Need help staying compliant?
If you need help with your rental properties because compliance is too much to keep up with, call Fresh Start Property Management. We can take this hassle off your plate.
This post is general information, not legal advice. Talk to a Michigan attorney about your specific properties and leases.
