Escrow and Witholding Rent

Michigan tenants are legally entitled to a rental property that meets basic structural, health, and safety standards and is in good repair. If your landlord does not attend to maintenance issues within a reasonable amount of time*, you have the right to withhold your rent in Escrow.

What’s An ‘Escrow’ Account?

A bank account held by a third party (your bank), into which some or all of your rent payments are deposited. This shows that you, the tenant, were ready, willing, and able to pay the rent, but decided to withhold rent until your landlord fixed the maintenance problem(s) they are legally responsible for fixing. You do not need the prior approval of a judge to set up an escrow account. 

Before withholding rent in escrow, you need to communicate the maintenance issue(s) to your landlord in writing (email and text message qualify) — Make sure to include the date. Landlords have 30 days to respond to your written request and to make the repairs. If they do not respond and make the necessary repair within 30 days, you can withhold rent in an escrow account. If you are experiencing a major repair need, such as a broken furnace, leaking sewage, or faulty plumbing that restricts access to clean water, tell your landlord and call Detroit’s Building Safety, Engineering and Environmental Department (BSEED) at (313) 224-2733. 

When can a tenant put rent in escrow? 

  • When your landlord fails to make repairs that impede the safety or functionality of your unit 
  • When your rental unit is not provided with adequate heat (68 degrees, min.)
  • When your rental unit does not have water (hot and cold) due to faulty or ill repaired plumbing
  • Dangerous electrical access or exposed wiring 

Repair and Deduct
If your landlord has failed to respond within 30 days of you providing written notice, you have the right to make repairs yourself and have the cost of the repair deducted from your rent. In this case, you would “repair and deduct”. Repair and deduct is when you buy a replacement part or item and do repairs yourself or have a repair person fix the issue.  

If you hire someone to make the repair, state law requires that you get three estimates and present them to your landlord before hiring someone to make the repair.  You will deduct the cost of the materials or the work order from your rent. You must keep copies of all receipts and work orders and present these costs as a deduction when you next pay rent. 

If you fix the problem yourself, keep the repair tidy and up to code. Document the repair by taking before and after photos. Keep receipts for any materials you purchase. Deduct the cost of materials from your rent.

Risks of Escrow 

Your landlord may want to evict you for withholding rent. To deter them, show the bank statement of your escrow account to your landlord to demonstrate that you have the money but refuse to pay until repairs are made. If your landlord attempts to evict you for withholding rent, having your rent in an escrow account will offer you protection in court.  Withholding your rent in an escrow account communicates to the judge that you are a serious and responsible tenant who is not looking to get out of paying rent.