Michigan Source-of-Income Law and the 5-Unit Exemption
Since April 2, 2025, MCL 554.601c bars a Michigan landlord from denying, ending or burdening a tenancy because of the tenant’s source of income. The ban does not apply to a person who, together with all related entities, is a landlord of fewer than 5 rental units in this state (554.601c(2)). Many self-managing owners of 1 to 4 units are therefore outside this section, but the count includes all related entities (those you control, those that control you and those under common control with you), and the exemption does not clear you under any other law.
What counts as source of income
The definition is in MCL 554.601(f). It includes benefit and subsidy programs: housing assistance, housing choice vouchers under 42 USC 1437f, public assistance, veterans’ benefits, Social Security, supplemental security income or other retirement programs, and other programs run by any federal, state, local or nonprofit entity. Two things are not source of income:
- income the prospective tenant cannot demonstrate comes from sources and activities permitted by law and is provided on an ongoing basis;
- housing assistance the appropriate agency has not approved within 30 days after the landlord provides all information the agency requires, including evidence that all repairs required before occupancy are complete.
Example of the 30 days: a landlord supplies the complete package on Tuesday, 6 October 2026. Treating the next day as day 1, day 30 is Thursday, 5 November 2026. The statute text does not say how to count weekends or holidays; the court rules do, and they are outside these files. Ask the court clerk or an attorney, and when in doubt finish early.
What a covered landlord may not do
Subsection (1) protects “an otherwise eligible prospective or current tenant”. Based on source of income, a landlord may not:
- deny or terminate a tenancy, or make a rental unit unavailable (a), (c);
- make any distinction, discrimination or restriction in price, terms, conditions, fees or privileges, or in facilities or services (b), including for use of emergency rental assistance (e);
- say a unit is unavailable when it is available, knowingly fail to bring a listing to the prospect’s attention, or refuse an inspection (d);
- discourage a rental (g);
- publish or display any advertisement or sign that indicates a preference, limitation or requirement based on source of income (h);
- assist, induce, incite or coerce another person to do any of this (i), or coerce, intimidate, threaten or interfere with anyone exercising these rights (j).
Subdivision (f) deals with income thresholds and rent vouchers or subsidies. Its wording is terse; read it in full and ask an attorney how it applies to your screening rule.
Who is exempt: the 5-unit count
MCL 554.601c(2) applies the ban unless the person “is a landlord of fewer than 5 rental units in this state”, counting all related entities. A “person” is any individual, partnership, corporation, association, limited liability company or other legal entity. A “related entity” is a person that “directly or indirectly, controls, is controlled by, or is under common control with another person”. A rental unit (554.601(c)) is a structure or part of a structure used as a home, residence or sleeping unit by a single person or household unit, but the same definition also lists “single and 2-family dwellings”, and the text does not say whether a duplex counts as 1 unit or 2. We count it as 2, the conservative reading.“Landlord” (554.601(a)) covers owners, lessors and sublessors and also a person authorized to exercise any aspect of managing the premises.
Worked example
| Facts | Count | Result |
|---|---|---|
| Owner A holds a duplex and a single-family house in A’s own name. | 3 (duplex counted as 2) | Fewer than 5: exempt. |
| Same, and Owner A controls LLC X, which owns a 2-unit building. | 3 + 2 = 5 | X is a related entity; 5 is not fewer than 5: the ban applies to A and X. |
| Owner B owns 3 units; unrelated Owner C owns 3 units; no common control. | 3 and 3 | Each counted separately: both exempt. |
| Owner D has 4 units in Michigan and 6 in another state. | 4 | Only units “in this state” count: exempt under this section. |
The statute text does not define “control”, and it does not say how to treat vacant units. Because the definition of landlord reaches managers, units you manage for someone else may count toward your total. Count conservatively and ask an attorney if you are near the line.
Damages: MCL 554.601d
MCL 554.601d lets a person alleging a violation of 554.601c bring a civil action for injunctive relief or damages, or both. Damages are actual damages for the injury or loss caused by each violation, “or up to 3 times the monthly rent for the rental unit or units at issue, whichever is less”, together with court costs and reasonable attorney fees. The action may be brought in the circuit court for the county where the violation occurred or where the defendant resides or has its principal place of business.
Exempt does not mean unregulated
The exemption removes only 554.601c. It does not say that any practice is lawful under another law, and the statute text we rely on contains no other source-of-income rule. Federal law, local ordinances and other state statutes are outside our source files. One example that is inside them: MCL 554.633(1)(c) forbids a lease provision that excludes or discriminates in violation of the Elliott-Larsen civil rights act or the persons with disabilities civil rights act, and nothing in that section creates a small-landlord exemption. Whether any other law reaches your ads or screening is a question for a Michigan attorney.
Common mistakes
- Counting only the units in your own name and forgetting an LLC you control.
- Posting a listing that states a preference or limitation based on source of income; (h) bars it for covered landlords.
- Treating 554.601d as a fixed multiple: it is the lesser of actual damages and up to 3 times monthly rent, plus costs and fees.
This describes the statute; it is not legal advice.
The History lines show 554.601c added by 2024 Act 178 and 554.601 amended by 2024 Act 179, both effective April 2, 2025. The History line printed for 554.601d reads 2024 Act 199, with the same effective date.
Checked against the text published on legislature.mi.gov on 5 October 2026.
Sources
- MCL 554.601c — Michigan Legislature, Michigan Compiled Laws
- MCL 554.601d — Michigan Legislature, Michigan Compiled Laws
- MCL 554.601 — Michigan Legislature, Michigan Compiled Laws
- MCL 554.633 — Michigan Legislature, Michigan Compiled Laws
Related guides
- Michigan Security Deposit: The 30-Day Notice of Damages
- Michigan Security Deposit Maximum: 1 1/2 Months' Rent
- Michigan Security Deposit Written Notice: 14-Day Rule, MCL 554.603
- Michigan Landlord Inventory Checklist Requirements (MCL 554.608)
- Michigan 45-Day Deposit Rule: Sue or Return, and Double Damages
- Michigan Deposit Refunds by Direct Deposit: The 2026 Change
- Michigan 7-Day Demand for Possession for Unpaid Rent
- Michigan Month-to-Month Notice to Quit: MCL 554.134 Explained
- Michigan Eviction Process: Summary Proceedings, Step by Step
- Michigan Landlord Lockout and Utility Shutoff: MCL 600.2918
- Michigan Lease Clauses Landlords Cannot Use (Truth in Renting)
Informational only, not legal advice. Statute text checked against the Michigan Compiled Laws (MCL 554.131 to 554.139, 554.601 to 554.616, 554.631 to 554.641 and 600.2918, 600.5701 to 600.5759) as published at legislature.mi.gov on October 5, 2026. Statutes change and a court may read them differently than a summary does; for a dispute, an eviction or anything expensive to get wrong, talk to a Michigan landlord-tenant attorney.
Want the complete picture? The Michigan Small Landlord Compliance Guide puts the security deposit, lease, notice and eviction rules of the Michigan Compiled Laws in one place, with each rule cited to the statute text.
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