Court Rules Unpermitted Residential Leases Invalid

Michigan renters may have voided lease agreements if their landlord failed to secure mandatory local rental permits.

Updated on Oct. 24, 2026 in Apartments

Court Rules Unpermitted Residential Leases Invalid

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Should residential leases be automatically voided if a landlord lacks a required local permit?

The Michigan Court of Appeals has ruled a residential lease in West Bloomfield Township invalid because the landlord lacked the required rental permit. This decision voided the contract from its inception, meaning the tenant had no legal obligation to pay a security deposit.

Why it matters

This ruling highlights the importance of municipal compliance for rental properties, as landlords without proper permits may face total contract invalidation. Tenants in unlicensed units may now have a path to challenge lease terms and seek restitution through unjust enrichment claims.

The Michigan Court of Appeals ruled the lease void ab initio, or invalid from the beginning, because the property lacked a mandatory certificate of compliance. West Bloomfield Township enforces civil fines for property owners who rent units without securing this permit.

The players

Michigan Court of Appeals

The state judiciary branch responsible for setting precedents on landlord-tenant law and contract disputes.

West Bloomfield Township

The local municipality that mandates specific certificates of compliance for all rental properties.

The details

The court determined that because obtaining a permit is a condition of legal occupancy, the absence of one renders the entire lease agreement void. Consequently, the appellate panel ruled that breach of contract claims are unenforceable and the tenant was never required to provide a security deposit. The case has been sent back to the circuit court, where the tenant can now pursue a claim for unjust enrichment.

October 24, 2026: Official report of the appellate court ruling.

The Home Front

This ruling clarifies the intersection of municipal permitting requirements and the Michigan Landlord-Tenant Act. It establishes that failure to obtain local certifications can invalidate standard protections previously afforded to landlords under state law.

Renters in Michigan should verify if their property is registered with their local municipality to ensure their lease is legally sound. If you suspect your unit lacks a permit, consult with a licensed attorney to discuss the validity of your contract and any potential claims.

The takeaway

When a lease is declared void from the start, obligations like security deposits may be legally unenforceable. Tenants should maintain records of all rental agreements and verify with their local building department that their landlord holds an active certificate of compliance.