As a general rule, there is no limitation upon the amount of rent that a landlord may charge, except that a landlord may not charge a rent “which is grossly in excess of” rents for similar houses or apartments. MCL 445.903(1)(z) (Consumer Protection Act). See also MCL 554.633(1)(m); MCL 554.633(3) (Truth in Renting Act’s prohibition against violating the Consumer Protection Act). However, all local governments in Michigan are prohibited from enacting, maintaining, or enforcing local rent control ordinances or resolutions regarding private residential property, unless the local government has an interest in the property. MCL 123.411(2)-(3).
A.Rent Levels for Individual Tenants in Unsubsidized Housing
There are limitations on the right of a landlord to raise rents. The landlord is bound by the terms of any outstanding lease. Thus, if a tenant has a lease for one year, rents may not be increased during the term of the lease.1 See MCL 554.633(l), which states that a landlord is prohibited from including in a rental agreement any clause that “provides that a lessor may alter a provision of the rental agreement after its commencement without the written consent of the tenant[,]” with the following exception: A landlord may adjust a rental amount if he or she gives a tenant written notice and the rental amount adjusted is “to cover additional costs in operating the rental premises incurred by the lessor because of increases in ad valorem property taxes, charges for the electricity, heating fuel, water, or sanitary sewer services consumed at the property, or increases in premiums paid for liability, fire, or worker compensation insurance.”
B.Rent Increases in Subsidized Housing
Rent levels for individual tenants in most subsidized housing are set by a statutory or regulatory formula and are generally based on income.2
1 Occasionally a lease may provide for interim increases upon the happening of certain events or at the option of a party. The former provision was apparently permitted in Poli v Jacobs, 177 Mich 238, 244 (1913). The latter provision has been held not to void the lease for uncertainty, but to require the increases to be reasonable. See Stancroff v Brown, 76 Mich App 589, 594 (1977).
2 See Chapter 3 for a discussion of governmentally subsidized housing.