Required Disclosures in Michigan Commercial Leasing
Understand the lack of mandatory disclosures in Michigan commercial real estate and the powerful role of 'Caveat Emptor' during the due diligence phase.
Legal Disclaimer
This content is for general informational and educational purposes only. It does not constitute legal advice and should not be relied upon as such. Laws change frequently — always verify current regulations and consult a licensed attorney in your jurisdiction for advice specific to your situation. Landager is a property management platform, not a law firm.Information last verified: May 2026.
Since Michigan's admission to the Union on January 26, 1837, the state's commercial legal framework has evolved to prioritize freedom of contract between sophisticated parties. Unlike residential leasing in Michigan—which demands highly specific "Truth in Renting Act" (MCL 554.631) clauses, 14-day security deposit bank location notifications, and mandatory inventory checklists—the commercial real estate sector relies on a combination of "Caveat Emptor" and specific statutory environmental disclosures.
In Michigan commercial leasing, the governing legal principle is largely "Caveat Emptor" (Let the Buyer/Lessee Beware), though this is tempered by specific environmental disclosure mandates.
Limited Mandatory Statutory Disclosures
In Michigan commercial leasing, while there is no general "Commercial Disclosure Statement" mandated by state statutes—such as the Seller Disclosure Act (MCL 565.951), which applies exclusively to residential properties with 1–4 units—there are specific statutory disclosure requirements. The Truth in Renting Act (MCL 554.631) also applies exclusively to residential properties.
However, commercial landlords must disclose known environmental hazards under Part 201 of Michigan's Natural Resources and Environmental Protection Act (NREPA), MCL 324.20101 et seq.
The Tenant's Burden of Due Diligence
While the landlord has specific statutory duties regarding environmental hazards, the commercial tenant is still largely responsible for executing their own exhaustive due diligence before signing the contract. The sophisticated tenant (and their corporate counsel) must insert specific contingencies into the Letter of Intent (LOI) or the drafted lease allowing them to investigate:
1. Zoning and Permitting
A landlord does not have to verify that a tenant's specific business operation (e.g., a commercial bakery or an auto repair shop) is legally permitted under local municipal zoning codes. If a tenant signs a 10-year lease and discovers 30 days later that Detroit zoning prohibits them from operating their intended business in that specific building, the tenant is still legally obligated to pay the entire 10-year lease.
2. Environmental Hazards
Commercial landlords must disclose known environmental hazards, such as asbestos and underground storage tanks, under federal law and Part 201 of Michigan's NREPA (MCL 324.20101 et seq.). Part 201 defines "nonresidential" land use to include industrial, commercial, retail, office, and service uses, and establishes responsibilities for owners and operators of "facilities" where hazardous substances are located. While tenants should conduct Phase I Environmental Site Assessments, the landlord is legally obligated to disclose known contamination.
3. As-Is/Where-Is Clauses
Most standard commercial leases in Michigan contain an "As-Is" clause. This means the landlord is delivering the space precisely in its current condition, with all faults. If the HVAC system dies on the second day of the lease, the landlord is not required to fix it unless the lease explicitly guarantees the system's functionality.
The Limits of Caveat Emptor (Fraud)
While a commercial landlord does not have to proactively point out every flaw, they are still constrained by federal and state laws regarding outright fraud and active concealment.
A landlord cannot:
- Actively Lie: If the tenant directly asks, "Does the roof leak?" and the landlord answers "No," knowing full well the roof has failed, the landlord has committed actionable fraud.
- Actively Conceal: A landlord cannot physically paint over severe structural water damage or erect a fake wall to hide black mold in an effort to deceive the tenant's building inspector.
Managing Sophisticated Letter of Intents workflows
Because every disclosure and guarantee must be manually negotiated into the contract, the "Letter of Intent" (LOI) phase in Michigan commercial real estate is highly complex. Landager provides institutional landlords with centralized deal-flow tracking, ensuring that every time a leasing agent negotiates an environmental indemnity clause or a custom HVAC warranty into an LOI, those specific contingencies are automatically flagged for legal review before the final binding lease is generated, ensuring consistency across your statewide portfolio.
How Landager Helps
Landager tracks lease terms, important compliance deadlines, and security deposit details - making it easy to stay compliant with Michigan regulations.
Frequently Asked Questions
▶What are the Michigan landlord-tenant laws every property owner should know?
Renting residential property in the state of Michigan requires strict adherence to a specific set of legislative acts, most notably the Landlord and Tenant Relationships Act (Act 348 of 1972) governing security deposits, and the Truth in Renting Act (Act 454 of 1978) governing lease clauses. This guide covers the essential compliance requirements for property owners and landlords.
Read the complete guide▶What is the Michigan eviction process and how long does it take?
The Michigan eviction process requires landlords to provide written notice to tenants before filing a court action. The type and length of notice depends on the reason for eviction — typically shorter for non-payment of rent and longer for lease violations or no-fault terminations. Self-help evictions (changing locks, removing belongings, shutting off utilities) are illegal in Michigan. The full court process varies but typically takes several weeks.
Read the complete guide▶What are the Michigan security deposit rules and return deadlines?
Michigan has specific rules governing how much landlords can charge for security deposits, how deposits must be held, and the deadline for returning deposits after a tenant moves out. Landlords must provide an itemized statement of any deductions made from the deposit. Failure to comply with deposit return deadlines can result in penalties and the forfeiture of the landlord's right to claim deductions.
Read the complete guide▶What are the Michigan rent increase laws and caps for landlords?
Michigan has specific rules governing when and how landlords can increase rent. During a fixed-term lease, rent generally cannot be increased unless the lease explicitly allows it. For month-to-month tenancies, landlords must provide proper written notice before an increase takes effect. Check whether Michigan has any local rent control ordinances that may impose additional caps or requirements.
Read the complete guide▶What is the grace period for late rent in Michigan?
Michigan has specific rules regarding grace periods for late rent and the amount that can be charged as a late fee. Late fee provisions must be stated in the lease agreement, and fees must be reasonable. Check Michigan state law and any applicable local ordinances for the exact grace period and late fee limits that apply to your rental property.
Read the complete guide▶What disclosures must Michigan landlords provide to tenants?
Michigan landlords must provide certain disclosures to tenants before or at the time of lease signing. Common required disclosures include lead-based paint hazards (for pre-1978 buildings, a federal requirement), the identity of the landlord or property manager, and any known material defects in the property. Additional state-specific disclosures may include flood risk, mold hazards, and environmental conditions.
Read the complete guide▶What are the Michigan lease requirements for rental properties?
Michigan recognizes both written and oral leases, though written leases are strongly recommended for terms longer than one year. Lease agreements should include the rent amount, payment due date, security deposit terms, maintenance responsibilities, and rules regarding entry, pets, and subletting. Certain lease clauses that waive tenant statutory rights may be void and unenforceable under Michigan law.
Read the complete guide▶What are Michigan landlord maintenance obligations and habitability standards?
Michigan landlords must maintain rental properties in a condition that is fit for habitation and complies with applicable building, housing, and health codes. This includes maintaining structural integrity, plumbing, heating and cooling systems, electrical systems, and pest control. Tenants typically have the right to request repairs in writing, and if repairs are not made within a reasonable time, tenants may have legal remedies available.
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