Selling a Rental With a Month-to-Month Tenant in Michigan

A month-to-month tenant stays in place when the house changes hands. Michigan law treats the tenancy as a tenancy at will that can be ended with notice equal to the rent interval, usually one-month. The new owner steps into the same landlord role on closing day, and the security deposit must be transferred with written notice to the tenant or returned. Blue Backs Property's buys the property as-is with the tenant in place; the seller delivers the unit subject to that tenancy and the deposit obligation.

How does the tenancy survive the sale?

When a landlord sells a rental unit before a lease expires, the new owner takes the property subject to the remaining term of the lease (Michigan Judicial Institute, Residential Landlord-Tenant Law Benchbook, 2026-07-22). A month-to-month tenancy is a tenancy at will with no fixed end date, so it continues automatically until either party gives proper notice. The buyer becomes the landlord on the closing date and inherits all rights and duties under the existing rental agreement. The rental agreement itself does not need to be rewritten; it simply continues with the new owner as the landlord.

What notice is required to end a month-to-month tenancy?

Michigan law provides that a month-to-month tenancy may be terminated by a one-month notice to quit under MCL 554.134(1) (Michigan Judicial Institute, Residential Landlord-Tenant Law Benchbook, 2026-07-22). If rent is payable at intervals of less than three months, the notice period equals the interval between rent payments. The notice must be in writing and served in the manner required by statute. The buyer, as the new landlord, can serve this notice after closing if the plan is to vacate the unit. The seller should confirm the exact rent payment interval before closing so the correct notice period is used.

How is the security deposit handled at closing?

Under MCL 554.614, the selling landlord remains liable for the tenant's security deposit until one of three things happens: the deposit is transferred to the new owner with written notice to the tenant by ordinary mail stating the transfer and the new owner's name and address; the new owner complies with section 4 of the act on how deposits are held; or the deposit is returned to the tenant (Michigan Legislature, MCL 554.614, 2026-10-19). The deposit cannot exceed 1 1/2 months' rent under MCL 554.602 (Michigan Legislature, MCL 554.602, 2026-10-19). At closing, the seller should assign the deposit to the buyer and provide the required written notice to the tenant, or return the deposit and let the buyer collect a new one. The definition of a rental unit under MCL 554.601 includes single and 2-family dwellings, so these rules apply to houses as well as apartments (Michigan Legislature, MCL 554.601, 2026-10-19).

What repair and habitability obligations transfer to the buyer?

The new landlord covenants that the premises are fit for the intended use, must keep the property in reasonable repair, and must comply with health and safety laws under MCL 554.139 (Michigan Legislature, MCL 554.139, 2026-10-19). This obligation runs with the landlord role. Blue Backs Property's purchases the property as-is; any outstanding repair requests or code violations become the buyer's responsibility after closing. The seller should disclose any pending repair requests or habitability issues to the buyer before closing.

What happens if the tenant does not leave after notice expires?

If a tenant does not vacate after proper notice expires, the landlord must file Summary Proceedings in district court to recover possession under MCL 600.5701 and 600.5704 (Michigan Legislature, MCL 600.5701 and 600.5704, 2026-10-19). Self-help eviction such as changing locks or shutting off utilities is prohibited (Michigan Legislature, A Practical Guide for Tenants & Landlords, 2026-03-24). The buyer assumes this process if it becomes necessary after closing. The seller should choose a closing date that allows time to serve notice if the buyer wants the unit vacant.

What should the seller decide before closing?

• Confirm the exact rent payment interval to calculate the correct notice period.
• Locate the security deposit ledger and the tenant's forwarding address for the required written notice.
• Determine whether to transfer the deposit to the buyer or return it to the tenant.
• Disclose any pending repair requests or habitability issues to the buyer.
• Choose a closing date that allows time to serve notice if the buyer wants the unit vacant.

Close on the date you choose, typically two to four weeks after a signed agreement, depending on title. No agent commissions (often 5% to 6% combined when you list). We pay the closing costs. Your proceeds are our offer minus your mortgage payoff, any liens, and the normal property-tax proration. In some cases we assign our purchase agreement to another buyer before closing; your price and terms stay the same. Here's the next step: get a no-obligation cash offer and see our number on the house. General information, not legal advice.

Related reading: Cash offer vs. listing: the real net on a house that needs work.

General information, not legal advice.