Commercial lease disputes in Michigan
I am Mitchell Bisson, a Grand Rapids business litigation lawyer. I have litigated for over 15 years. A commercial lease dispute can start with a missed rent payment, an early move out, or a tenant who stays after the lease ends. This page covers questions Michigan landlords and business tenants ask, including notice before eviction, judgments for possession, holdover tenants, a landlord’s duty after a tenant leaves early, personal guaranties, and attorney fee clauses. I act for either side, landlord or tenant. The short answers below come from my Michigan legal library.
Most commercial lease disputes in Grand Rapids, Kentwood, Wyoming and the rest of Kent County start with money or with a date. A tenant falls behind on rent or common area charges. A business closes early and the landlord adds up what it says is owed through the end of the term. A lease runs out and the tenant stays. A person who signed a personal guaranty gets a letter. A lease is a contract, and the Michigan Supreme Court has restated, in a deed restriction case, that unambiguous contracts are enforced as written unless a provision would violate law or public policy. Bloomfield Estates Improvement Ass’n v. City of Birmingham, 479 Mich. 206 (2007). So I start with the lease, then the notices, the rent ledger and the dates.
A landlord who wants possession has a fast statutory route. Summary proceedings to recover possession are filed in district court under MCL 600.5704 and run under MCR 4.201. For unpaid rent, a landlord may proceed when a tenant holds over after failing to pay rent due within 7 days from service of a written demand for possession, and rent due for that purpose does not include accelerated indebtedness because of a breach of the lease. MCL 600.5714(1)(a). The defendant must appear and answer by the date on the summons, and a business tenant that was served under the rule and does not appear can be defaulted. MCR 4.201(G)(1), (G)(5)(a).
Much of what you read about landlord and tenant law is written for homes. The rental assistance advisements and stays in MCR 4.201 are written for residential leases, and so is the security deposit statute. A business lease is governed mostly by what it says. The general deadline to sue for money due on a lease is six years under MCL 600.5807(9), the period for a breach of contract claim not described in the shorter subsections. A possession case moves in days and weeks.
I act for landlords, tenants and the individuals who signed guaranties, so I know how each side will argue the same clause. I do not promise outcomes. I confirm the current text of the statutes and court rules before I file.
Michigan commercial lease claims, notices and deadlines
These are the rules in the statutes, the court rule and the case law.
| Claim or issue | What must be shown | Time limit or key rule | Authority |
|---|---|---|---|
| Lease longer than 1 year | A writing, or a note or memorandum, signed by the party making the lease or an agent authorized in writing | Void without it. Reasonable reliance on an oral promise may support estoppel | MCL 566.108; Jim-Bob, Inc. v. Mehling, 178 Mich. App. 71, 88 (1989) |
| Nonpayment of rent | Rent due under the lease, unpaid after a written demand for possession | 7 days from service. A written 7-day notice to quit is also allowed. Accelerated rent does not count | MCL 600.5714(1)(a); MCL 554.134(2) |
| Holdover after the lease ends | Termination under the lease or by law, expiration of the term, or a notice to quit | Estate at will or by sufferance: 1 month’s notice, or the rent interval if under 3 months. Year to year: ends 1 year after service | MCL 600.5714(1)(c); MCL 554.134(1), (3) |
| After a judgment for possession | A judgment for possession, then a writ or order of eviction | Generally no writ for 10 days. 10 days to appeal or move. For nonpayment, paying the judgment amount and taxed costs in time stops the writ | MCL 600.5744(5), (7); MCR 4.201(N), (O)(2) |
| Money claims in the eviction case | A money claim stated separately. A money counterclaim labeled and stated separately in a written answer | Rent excused by the landlord’s breach is deducted. Possession does not merge or bar other claims | MCL 600.5739(1); MCL 600.5741; MCL 600.5750; MCR 4.201(H) |
| Landlord lockout or self-help | Unlawful interference by the owner with a tenant’s possession, such as new locks without immediately providing keys | Greater of actual damages or $200 per occurrence. Suit to regain possession within 90 days, for damages within 1 year. Cannot be waived | MCL 600.2918(2), (7), (8) |
| Tenant leaves early | If the tenant wrongfully abandons, the landlord must use reasonable efforts to mitigate and the tenant must prove it did not. No mitigation defense to a rent suit if the tenant did not abandon or surrender | Fact driven. The lease may add reletting terms | Jefferson Development Co. v. Heritage Cleaners, 109 Mich. App. 606, 610-611 (1981); M & V Barocas v. THC, Inc., 216 Mich. App. 447, 449-450 (1996) |
| Personal guaranty | A promise to answer for another’s debt, in a writing signed by the guarantor | A material change to the obligation without the guarantor’s consent discharges the guaranty | MCL 566.132(1)(b); Wilson Leasing Co. v. Seaway Pharmacal Corp., 53 Mich. App. 359, 369-370 (1974) |
What a landlord or a tenant has to prove in a lease dispute
A lease you can enforce. A lease for longer than one year is void unless the lease, or a note or memorandum of it, is in writing and signed by the party making the lease or a person that party authorized in writing. MCL 566.108. The signature requirement runs to the landlord’s side. In Jim-Bob, the Court of Appeals found a fact question on whether landlords were estopped from raising the statute of frauds where the tenant reasonably relied on their oral promises of a new lease. 178 Mich. App. 71, 88 (1989). That is a fact question, not a guarantee. Jim-Bob was decided before November 1, 1990, so a later panel need not follow it (MCR 7.215(J)(1)).
A default the lease actually defines. I read the rent clause, the additional rent clause, the notice and cure provisions and the termination clause together. The nonpayment statute speaks of rent due under the lease or agreement by which the person holds the premises. MCL 600.5714(1)(a). Whether common area charges, taxes, insurance or late fees count as rent is a lease question. I check that before a demand goes out, because a demand that mixes rent with charges the lease does not treat as rent gives the other side an argument.
Notice that can be proved. The complaint must attach copies of any notice to quit and any demand for possession, showing when and how each was served, and must state the rental period and rate, the amount due and unpaid and the dates payments became due. MCR 4.201(B)(1)(c), (B)(3)(a). The statute lists other grounds too, including serious and continuing health hazards or injury to the premises, and forcible entry. MCL 600.5714(1)(d), (f).
A breach tied to a loss. A lease claim is a breach of contract claim in a real estate setting, and the plaintiff must establish a causal link between the asserted breach and the claimed damages. Gorman v. American Honda Motor Co., 302 Mich. App. 113, 118-119 (2013). A tenant that says the landlord let the parking lot go and the business suffered needs proof connecting particular failures to particular losses.
Defenses and answers I look at in a commercial lease case
Defects in the notice or service. I compare the demand to the lease and the 7-day statute: the amount, the charges included, the date, the method of service and the proof of it. A summary proceeding is a statutory shortcut, and I hold it to its terms.
The landlord’s own breach and excused rent. A party to summary proceedings may join claims and counterclaims for breach of the lease. MCL 600.5739(1). When the judge or jury sets the amount due for nonpayment, it deducts any rent it finds excused by the landlord’s breach of the lease. MCL 600.5741. A money counterclaim that affects the amount the defendant must pay to prevent an order of eviction is tried with the possession claim unless it appears to be without merit, and it must be labeled and stated separately in a written answer. MCR 4.201(H)(1)(a)(i), (H)(1)(e).
Who breached first. One who first breaches a contract generally cannot maintain an action against the other party for a later breach, but the rule applies only if the first breach was substantial. Able Demolition, Inc. v. City of Pontiac, 275 Mich. App. 577 (2007). In the unpublished decision JRR Properties Westland LLC v. Westland Mall Realty LLC, No. 364334 (Mich. Ct. App. Oct. 19, 2023), the Court of Appeals rejected a restaurant tenant’s use of the rule against the landlords’ counterclaims, because the tenant’s nonpayment came first. Unpublished opinions are not binding under MCR 7.215(C)(1), and I cite this one only to show how the argument was handled.
Mitigation when a tenant leaves. It depends on how the tenant left. In Jefferson Development, the Court of Appeals said a tenant’s decision to vacate does not by itself exonerate the tenant, and that when a tenant wrongfully abandons, the landlord must use reasonable efforts to mitigate, with the burden on the tenant to show it did not. 109 Mich. App. 606, 610-611 (1981). Jefferson Development was decided before November 1, 1990, so a later panel need not follow it (MCR 7.215(J)(1)). In Barocas, a tenant that had not abandoned the premises or surrendered the lease could not defend a rent suit by claiming failure to mitigate. 216 Mich. App. 447, 449-450 (1996). The two came out differently on different facts, and the lease’s reletting clause matters too.
Self-help by the landlord. The lockout statute lists as unlawful interference changing the locks without immediately providing keys, removing or destroying a tenant’s personal property, boarding the premises, removing doors or locks, and cutting off an essential service such as heat, water or electricity. Exceptions include acting under a court order. MCL 600.2918(2), (3). The provisions may not be waived. MCL 600.2918(7). By its terms the subsection protects any tenant in possession of premises and does not say residential. I check current case law on how it applies to a business tenant before I advise on a lockout.
Damages, remedies and consequences
Possession and the writ. A writ of restitution generally cannot issue until 10 days after judgment. A few situations, such as forcible entry, allow it immediately. MCL 600.5744(3), (5). When the judgment is for nonpayment, the writ may not issue if the amount stated in the judgment, with taxed costs, is paid within the time provided. MCL 600.5744(7). Unless a hearing is held, an order of eviction may not issue later than 56 days after judgment, and it may not issue if any part of the judgment amount has been paid unless a hearing is held or the judgment says partial payment does not prevent it. MCR 4.201(M)(4), (M)(5).
Stays and appeals. A postjudgment motion challenging possession does not stay the case unless it comes with an escrow deposit of one month’s rent or the court finds grounds for relief under MCR 2.612(C). MCR 4.201(N)(1). An appeal of right must be filed within 10 days after judgment, and a claim of appeal stays an order of eviction only if filed with a bond or escrow order. MCR 4.201(O)(2), (O)(3).
Money beyond the possession case. A judgment for possession does not merge or bar any other claim for relief, and the landlord may sue for damages from the time of the notice to quit or demand for possession. MCL 600.5750. Costs in the possession case are limited to those MCL 600.5759 permits, which include taxable costs of up to $75 for a motion, default or consent judgment and up to $150 for a trial. MCR 4.201(L)(4).
Attorney fees under the lease. The Court of Appeals has said that contractual provisions for reasonable attorney fees are judicially enforceable and that fees awarded under them are damages, not costs. Fleet Business Credit, LLC v. Krapohl Ford Lincoln Mercury Co., 274 Mich. App. 584, 589 (2007). A party seeking them must sue to enforce the fee clause as part of a claim against the other side. In Pransky, the court vacated a fee award because the party never filed a counterclaim. Pransky v. Falcon Group, Inc., 311 Mich. App. 164, 194-195 (2015). I plead the fee claim with the complaint or the answer.
Security deposits, CAM charges and guaranties: where the eviction statutes stop
Security deposits. The Landlord-Tenant Relationships Act is written in residential terms. It defines a rental unit as a structure or part of a structure used as a home, residence or sleeping unit, and a tenant as an individual who occupies a rental unit for residential purposes. MCL 554.601(c), (g). Its cap of 1 1/2 months’ rent applies to a deposit “for each rental unit.” MCL 554.602. I therefore do not assume the Act’s cap or deposit rules govern a business lease. A commercial deposit turns on the lease: the amount, whether it can be applied to rent or repairs, when it comes back and whether interest or a separate account was promised.
Common area maintenance and other additional rent. Charges for common area maintenance, taxes and insurance come from the lease. The lease sets the pool of costs, the tenant’s share, the estimates, the year-end reconciliation, any audit right and whether the charge counts as rent for a default notice. The unpublished JRR Properties decision shows what happens when a CAM dispute is not documented. A restaurant tenant at a shopping center was evicted for nonpayment and then sued, claiming the landlord overcharged for CAM and property tax and failed to maintain lighting and snow removal. The Court of Appeals affirmed summary disposition for the landlords because the tenant’s affidavits offered speculation about the overcharge and about what caused its lost business. No. 364334 (Mich. Ct. App. Oct. 19, 2023) (unpublished, not binding under MCR 7.215(C)(1)). A tenant should dispute a reconciliation with line items and a clear theory, and a landlord should keep statements that match the lease.
Personal guaranties. A special promise to answer for the debt, default or misdoings of another is void unless it, or a note or memorandum of it, is in writing and signed by the party to be charged. MCL 566.132(1)(b). In Wilson Leasing, officers had guaranteed equipment leases, and one lease was amended to add equipment, raise the rent and extend the term by a month. The Court of Appeals stated that a material alteration of the principal obligation discharges a guaranty unless the guarantor consented, and that an alteration that increases the debt or extends the time for performance is material. It sent the case back to decide who consented. 53 Mich. App. 359, 369-370 (1974). Wilson Leasing was decided before November 1, 1990, so a later panel need not follow it (MCR 7.215(J)(1)). That case involved equipment leases, not a building lease, and it does not tell me how a court would treat a broad advance consent clause. So I read the guaranty and the history of every amendment, extension and assignment.
How I handle a commercial lease dispute
- Read the lease and everything attached to it. The signed lease, amendments, renewals, assignments, the guaranty, the exhibits that define common areas and additional rent, and the default, notice, holdover, surrender, deposit and fee clauses.
- Build the ledger and the timeline. Rent history, CAM estimates and reconciliations, each notice with how and when it was served, the keys, the move out date and the correspondence, in date order.
- Choose the track. Possession, money, or both. A tenant may pay and cure, counterclaim, negotiate an exit or defend. I calendar the summons date, the 10-day periods after judgment, and the periods in the lockout statute.
- Send or answer the notice. I check the demand against the lease and the 7-day statute. If you are the one accused, I tell you what the demand gets right and wrong before you pay or reply.
- File or answer in district court. The complaint attaches the lease and the notices. The answer states defenses and labels any money counterclaim.
- Trial, escrow and motions. The court can adjourn trial up to 56 days for good cause, and if it is adjourned more than 14 days and the plaintiff shows a clear need for protection, it can order rent paid into escrow. MCR 4.201(K)(1)(c), (I)(2). Paying or accepting money before trial does not necessarily stop the case, MCR 4.201(K)(4), so I get a written agreement about what any payment covers.
- After judgment. I read the judgment the day it arrives and decide whether to pay, move, appeal or negotiate.
Ways a commercial lease dispute may end without a trial
Whether any of these is available depends on the lease, the facts and the other side. None is automatic.
Negotiated resolution. Many lease disputes end with an agreement on a surrender date, a payment schedule, a reduced balance or a new lease, and a release. The paper should say what is released and what happens to the deposit and any guaranty. If a guarantor is involved, I address whether the guarantor must sign or consent, for the reasons in Wilson Leasing.
Consent judgment or conditional dismissal. The court may resolve a summary proceeding without adjourning the trial when both sides are represented and a consent judgment or conditional dismissal is filed. MCR 4.201(K)(2)(e)(iii). A judgment must state when and under what conditions an order of eviction will issue, and it may provide that partial payment will not prevent the order. MCR 4.201(L)(1)(b), (L)(3).
Payment, dismissal or motion. Payment of the judgment amount and taxed costs in time stops the writ for nonpayment. MCL 600.5744(7). A plaintiff may dismiss without conditions, MCR 4.201(K)(2)(e)(i), and a defective notice or unambiguous lease language can end a case on motion. The court must also tell the parties at the initial trial date that the community dispute resolution program office is available. MCR 4.201(K)(2)(a)(vi).
What I need from you
Bring the signed lease and every amendment, renewal, assignment and guaranty, the rent ledger, CAM estimates and reconciliations, and proof of what was paid and when. Bring every notice and demand with the delivery record, the emails and texts about repairs and complaints, photographs, the deposit receipt, and anything showing when keys were returned. If you were served, bring the summons and complaint and note the date and manner of service, because the court date is on the summons.
Do not change locks, remove a tenant’s property or shut off utilities, because the lockout statute allows damages for that. Do not stop paying rent or deduct charges on your own before someone has read the lease. Do not sign an amendment, extension, surrender or guaranty until it has been read against the lease. Do not send or accept a partial payment without a written agreement about what it means. Do not delete messages or alter documents.
Where your Kent County commercial lease case will be heard
I represent clients in Grand Rapids, Kentwood, Grandville, Wyoming and across Kent County. Under MCL 600.8301(1), the district court has exclusive jurisdiction in civil actions when the amount in controversy does not exceed $25,000, and a money claim in summary proceedings cannot exceed the amount that limits the court’s jurisdiction. MCL 600.5739(1). Kent County district courts include the 61st District Court in Grand Rapids, the 59th in Walker and Grandville, the 62A in Wyoming, the 62B in Kentwood and the 63rd for Rockford, Lowell, Cedar Springs, East Grand Rapids and the surrounding townships. Larger claims are filed in the Kent County Circuit Court, the 17th Judicial Circuit. A dispute involving commercial real property can qualify as a business or commercial dispute under MCL 600.8031(2)(g), which defines the cases eligible for a business court docket, while landlord-tenant matters involving only residential property are excluded.
Why people hire me for a Michigan commercial lease matter
You work directly with me, the lawyer handling your case. I give you the strengths and weaknesses of the case straight, including what it could cost you and what it could recover. I build the case the facts support, and then we decide together how to proceed.
Fees depend on the type of case, its complexity and whether it is likely to go to trial. I explain my fee arrangement at the consultation, before you decide whether to hire me.
Questions I hear from people in a commercial lease dispute in Michigan
Does a commercial lease have to be in writing in Michigan?
If the lease is for longer than one year, yes. MCL 566.108 says a contract for the leasing of land for a period longer than 1 year is void unless the contract, or a note or memorandum of it, is in writing and signed by the party by whom the lease is to be made, or by a person that party has lawfully authorized in writing.
What notice does a landlord have to give before evicting a business tenant for unpaid rent in Michigan?
A landlord may recover possession by summary proceedings if the tenant holds over after failing to pay rent due within 7 days after service of a written demand for possession for nonpayment. A landlord may also end a tenancy for nonpayment with a written 7-day notice to quit. Rent due for this purpose does not include accelerated rent.
A landlord won a judgment for possession against my business. How long before the sheriff can remove us, and can I stop it?
Usually not right away. Under MCL 600.5744(5), a writ of restitution generally cannot issue until 10 days after the judgment, and MCR 4.201 sets 10 days to appeal or file a postjudgment motion. If the judgment is for unpaid rent, paying the amount stated in the judgment plus taxed costs within the time given stops the writ. A few situations, such as forcible entry, allow immediate issuance.
If my landlord sues to evict my business, can I raise the landlord’s own breaches, and does losing the eviction end the landlord’s money claims?
You can raise them. In summary proceedings a party may join money claims and counterclaims for breach of the lease (MCL 600.5739(1)), and the judge or jury deducts rent excused by the landlord’s breach when setting the amount you must pay to avoid a writ (MCL 600.5741). A judgment for possession does not merge or bar other claims for relief, so money claims can continue, except after land contract forfeiture (MCL 600.5750).
What can a landlord do if a business tenant stays after the lease ends in Michigan?
A landlord can recover possession by summary proceedings when a tenant holds over after the lease is terminated under a power in the lease or implied by law, after the lease term expires, or after a notice to quit under MCL 554.134 ends the tenancy. A landlord generally may not use self-help, such as changing the locks without immediately providing keys, against a holdover tenant who has not abandoned the premises, and must go to court (MCL 600.2918(2), (3); Deroshia v Union Terminal Piers, 151 Mich App 715, 717, 720 (1986)).
My business closed and I moved out before the lease ended. Does the landlord have to try to find a new tenant, or can it just charge me all the rent?
It depends on what the landlord sues for and whether you abandoned or surrendered. In Jefferson Development, the Court of Appeals said a landlord whose tenant wrongfully abandons must use reasonable efforts to mitigate its damages, and the tenant must prove the landlord fell short. In M & V Barocas, a tenant who had not abandoned or surrendered could not defend a rent suit by claiming failure to mitigate. Your lease may add its own reletting terms.
I signed a personal guaranty of my company’s commercial lease. If the landlord and my company later amend or extend the lease, am I still on the hook?
Not necessarily. In Wilson Leasing v Seaway Pharmacal, the Court of Appeals stated that any material alteration of the underlying obligation completely discharges the guaranty unless the guarantor consented, and an alteration that increases the debt or extends the time for performance is material. Some guaranties contain advance consent language, so the wording and whether you took part in the change usually decide it.
My commercial lease says the loser pays the other side’s attorney fees. Is that enforceable, and what do I have to do to collect?
Generally yes. The Court of Appeals has said contractual provisions for reasonable attorney fees are judicially enforceable and the fees are damages, not costs (Fleet Business Credit v Krapohl Ford). Under Pransky v Falcon Group, a party seeking fees under a contract must make it a claim, such as a counterclaim for breach of the fee provision, rather than asking after judgment.
Related Michigan pages
- Grand Rapids Business Litigation Attorney
- Grand Rapids Commercial Contract and UCC Dispute Attorney
- Grand Rapids Partnership Dissolution and Joint Venture Attorney
- Grand Rapids LLC Member and Shareholder Dispute Attorney
- Grand Rapids real estate attorney
I handle commercial lease disputes in Michigan for landlords and tenants. Contact me 24/7 by phone or email. Your Rights, My Fight! Call for a free initial consultation.
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Law Offices of Mitchell S. Bisson, 2828 Kraft Ave SE, Suite 295, Grand Rapids, MI 49512, serving Kent County and West Michigan.
This page provides general information about Michigan law and is not legal advice. Reading it does not create an attorney-client relationship. Laws change and every case turns on its own facts. Consult a licensed attorney about your specific situation.