Legislative Analysis
Phone: (517) 373-8080
POST-CLOSING OCCUPANCY AGREEMENTS
http://www.house.mi.gov/hfa
House Bill 5384 as reported from committee Analysis available at
Sponsor: Rep. John R. Roth http://www.legislature.mi.gov
House Bill 5385 as reported from committee
Sponsor: Rep. Denise Mentzer
House Bill 5386 as reported from committee
Sponsor: Rep. Kelly Breen
Committee: Judiciary
Complete to 4-30-24
SUMMARY:
House Bills 5384, 5385, and 5386 would amend three different acts to address post-closing
occupancy agreements, which allow a seller of residential property to continue to live there
temporarily after the sale of that property. These are also called rent-back or leaseback
agreements: the new owner (buyer) rents the premises back to the old owner (seller) for a
specified period of time. The bills would provide that those agreements are not rental
agreements subject to the laws governing landlord-tenant relationships and would allow the
buyer to recover possession of the premises through a summary eviction proceeding if the seller
stays past the end of the agreement.
House Bill 5384 would amend the Truth in Renting Act, which prohibits certain provisions
from being included in rental agreements. The bill would specify that a residence occupied by
the seller on a temporary basis after a sale is not residential premises under the act.
MCL 554.632
House Bill 5385 would amend 1972 PA 348, the landlord-tenant act, to provide that a residence
occupied by the seller on a temporary basis after a sale is not a rental unit under the act.
MCL 554.601
House Bill 5386 would amend the Revised Judicature Act to allow eviction procedures to be
used when a seller continues to possess the property after a rent-back agreement has expired.
The person entitled to possession (the new owner) could sue to evict immediately (i.e., they
would not have to first serve notice and then wait a specified time).
MCL 600.5714
BRIEF DISCUSSION:
The bills address situations in which residential property is sold and the transaction includes
an agreement that allows the seller to continue to stay in the property for a specific amount of
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 time before the buyer takes possession. Often these agreements are intended to give the seller
some more time to figure out their next step, for example if their property sold before they
found their next place. According to committee testimony, these kinds of agreements have
existed for many years, and their use appears to be increasing of late. However, the practice is
not specifically defined or addressed in Michigan law, and there is concern that such an
arrangement could be legally interpreted as constituting a landlord-tenant situation. In addition,
an agreement as written might not take into account the possibility that a seller could overstay
it and the issues that may arise in that circumstance.
Supporters of the bills argue that they provide needed clarity about whether Michigan laws that
govern landlord-tenant arrangements apply to post-closing occupancy arrangements. The bills
would ensure that a post-closing occupancy agreement does not inadvertently create a landlord-
tenant relationship and that the new owner (buyer) is not subject to the responsibilities and
requirements that apply in a residential lease situation (for example, insurance considerations,
maintenance and repair responsibilities, and regulations governing security deposits or the
content and process for rental agreements). Those kinds of duties would be both inappropriate
and burdensome in the context of a residential sale agreement. The bills would also address
and clarify the legal process for a buyer to get possession of the premises from a seller who is
staying there beyond the terms of the temporary arrangement. By providing some statutory
clarity, supporters argued, the bills would also encourage intelligent planning by both buyers
and sellers and thus help avoid costly disputes between them.
FISCAL IMPACT:
The bills would have no fiscal impact on the state or local units of government.
POSITIONS:
Representatives of Michigan Realtors testified in support of the bills. (2-14-24)
Legislative Analyst: Rick Yuille
Fiscal Analyst: Robin Risko
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations and does not constitute an official statement of legislative intent.
House Fiscal Agency HBs 5384, 5385, and 5386 as reported Page 2 of 2


Statutes affected:
House Introduced Bill: 554.601
As Passed by the House: 554.601