Michigan Rent-to-Own Lease Agreement (2025)

The Rent-to-Own market in Michigan is gaining traction as an attractive alternative for aspiring homeowners who may not yet qualify for a mortgage. With rising property values and competitive housing markets, Rent-to-Own agreements provide a viable solution for many. Typically, these agreements last between one to three years, allowing tenants time to improve their credit score or save for a down payment. Demand is particularly high in urban areas such as Detroit and Grand Rapids, where housing markets are more dynamic. This trend reflects a growing need for flexible housing solutions and an increase in renters seeking paths to ownership.

• Provide Clear Terms: Landlords must provide a detailed Rent-to-Own agreement that clearly outlines the rental terms, option fee, purchase price, and any conditions necessary to exercise the purchase option.
• Maintain Property Standards: Landlords are required to keep the property in a habitable condition, adhering to Michigan's health and safety codes throughout the lease period.
• Disclose Property Condition: Before signing the agreement, landlords must disclose any known issues or defects with the property, ensuring transparency.
• Handle Option Fees: Landlords must clearly state how the option fee will be applied toward the purchase price and whether it is refundable.
• Comply with Disclosure Laws: Michigan law requires landlords to provide disclosures related to lead-based paint if the property was built before 1978.

• Right to Purchase: Tenants have the right to purchase the property at the pre-agreed price within the option period.
• Maintenance and Repairs: Tenants can expect the landlord to handle major repairs and maintenance unless otherwise specified in the agreement.
• Protection from Unlawful Eviction: Tenants are protected from eviction without just cause, as stipulated by Michigan landlord-tenant laws.
• Option Fee Application: Tenants have the right to know how their option fee is applied toward the purchase price.
• Right to Legal Recourse: If tenants feel their rights are violated, they can seek legal recourse under Michigan's landlord-tenant laws.

In Michigan, Rent-to-Own agreements must include specific terms related to the option to purchase, such as the option fee, purchase price, and the duration of the option period. Landlords are required to offer full disclosure of any property defects and ensure that the lease terms comply with Michigan's regulations regarding rental properties. Additionally, both parties should be aware of the implications of property taxes and insurance responsibilities during the lease term.

Lease agreements with option to purchase

Key Considerations:

• State-specific requirements for rent-to-own agreements
• Notice periods and termination clauses
• Rights and responsibilities of all parties
• Compliance with Michigan rental laws

State: Michigan

Scenario: Rent-to-Own

Document: Lease Agreement