Senate Bills 205-207: Michigan’s New Anti-Discrimination Laws for Landlords
Well, it’s official.
Michigan Senate Bills 205-207 were signed into law on December 30, 2024 by Governor Gretchen Whitmer.
That means it’s now against the law for Detroit landlords to discriminate against tenants on the basis of income source. And that includes Section 8 voucher holders.
We’ve talked at length about what these bills would mean for landlords if they became law, but now that the reality is upon us, what’s next?
If you’re a landlord worried about the implications of these new laws, here’s a breakdown of practical, legal strategies to help you stay compliant while optimizing your screening processes.
1. Switch to Month-to-Month Leases
The new rules introduce new risks for landlords, and they’re not happy about it (understandably). But one way to mitigate these risks is by transitioning to month-to-month leases instead of standard annual ones.
This strategy is perfectly legal and aligns with the requirement to not discriminate based on income source.
However, offering shorter leases gives landlords flexibility to reassess tenants regularly.
And, crucially, Section 8 usually requires tenants to hold a one-year lease agreement, so this option might naturally dissuade some participants in the program without violating the law.
2. Reinforce Your Minimum Credit Score Requirements
Under the new law, landlords cannot deny tenants based on the origin of their income, but legitimate financial screening measures are still available.
Setting a higher credit score threshold is one way to thoroughly evaluate tenants’ financial responsibility.
For example, requiring a minimum credit score of 600–620 can effectively narrow down your applicant pool. This metric reflects accountability with past financial obligations and may help you attract tenants who are more likely to pay on time, and look after your property.
3. Set Transparent and High Minimum Income Standards
You can no longer exclude applicants based on income source, but you can require tenants to demonstrate that their overall income meets a specific threshold.
Instead of using the standard “3x the monthly rent” rule (e.g., $3,000/month income for a $1,000/month rental), consider setting absolute income minimums. For instance, you might require that tenants earn at least $4,500 per month, regardless of where that income originates.
This approach protects your business while remaining legally compliant. Clear, objective requirements help to ensure consistent screening processes.
4. Follow the Law in Advertising and Communications
It’s crucial to word your rental advertisements carefully and handle inquiries professionally to avoid even the appearance of discrimination.
When responding to questions about whether you accept applicants with Section 8 vouchers, a neutral response like, “We accept all applicants who meet our qualifications,” will suffice. Avoid outright rejection or detailed discussions about preferences, as these could lead to legal challenges.
Additionally, avoid signaling aversion to specific groups in ads. Stating the income or credit score criteria instead focuses attention on qualifications rather than personal circumstances.
5. Fine-Tune Tenant Screening Policies
Even with these new restrictions, comprehensive screening is both necessary and still allowable under the law. Your application process should include consistent measures like:
- Criminal background checks (as permitted by law and avoiding blanket bans).
- Employment verification to ensure stability beyond government aid.
- Rental history to assess tenants’ track records with previous landlords.
Standardizing the application process avoids claims of favoritism and ensures all applicants are treated equally.
6. Build a Strong Lease Agreement
A well-drafted lease agreement is one of a landlord’s strongest tools for protecting their investments.
Ensure your lease has clauses that clearly outline tenant responsibilities, potential penalties for damage or non-compliance, and renewal terms.
You want this document to cover every potential scenario while remaining enforceable within the new regulatory framework.
7. Stay Updated on Current Legal Challenges
Although the bills have become law, legal challenges may arise in the coming months. For example, similar laws have faced heavy pushback in other cities like Kansas City, where landlords sued the government over claims that the policies overreach.
The Property Management Association of Michigan was already opposed to the bill before it was passed, so we expect continued legal challenges to these new requirements.
Keep a close eye on these developments to see how any court rulings may impact enforcement or provide opportunities for extended compliance deadlines.
Final Thoughts
These new laws ostensibly hamstring landlords when it comes to financial screening, which is one of the most crucial aspects of tenant selection.
But with these tips, we hope you can still make smart screening decisions that protect your investments, while also complying with the new regulations.
We are not lawyers, however! So please consult with your own legal advisors before putting any of this into practice.
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Any other suggestions for navigating the new tenant financial screening laws in Michigan? Please share them below!