On a Monday afternoon in late October, Ann Arbor resident Brian Young and his girlfriend drove up to a house on State Street across the street from Yost Ice Arena. Young had driven by the property a few days prior and noticed a sign that read “Rooms for Rent/No Lease.” He was on the search for a new home and the sign immediately caught his attention.
It was not the first time Young looked to rent a room without a lease. Growing up in Detroit and Ypsilanti, he said the no-lease, rental rooms phenomena was somewhat common. In the state of Michigan, landlords are not required to provide a written lease if the tenant is renting month-to-month for less than one year, although the agreement can be terminated with 30 days notice.
Having had good experiences in the past, Young decided to give the house a shot and take a tour. The liability of not having a written lease didn’t bother him.
“I feel like it wouldn’t be smart for somebody to jeopardize (their) business,” Young said. “To mistreat people or do somebody wrong. So I kind of overlook it, because I feel like people should be about they business more than trying to trick somebody or get over them. If there ain’t no lease, then I’ll take a chance because I feel like they wouldn’t jeopardize they business to do me wrong.”
The owner of the house on State Street, who also owns the Campus Student Bike Shop on Maynard Street, declined to comment.
Young, a gregarious grandfather, moved to Ann Arbor in 1989 for a better life. He works part-time as a custodian and receives disability benefits for a leg injury.
“I haven’t seen an abandoned building here since I’ve been here and I’ve never heard no gunshots,” Young said. “I feel like this is a good place for me. The cost of living is high, but there’s jobs here, so you can afford to live here. I just like Ann Arbor. The atmosphere, it’s a walking, running, talking, active town. The future is bright for me here. I tell my friends and people that wanna have something in life, that want to enjoy life, come to Ann Arbor.”
While Young said he has never experienced any issues with no-lease rentals, those familiar with affordable housing policy in Ann Arbor still caution against it.
Zack Ackerman, Ann Arbor City Councilmember, D-Ward 3, strongly advises against entering into a rental agreement without a lease. The liability, he said, is too great. And while the flexibility of no-lease renting may be attractive to tenants without dependable streams of income, Ackerman said it’s not a solution to the lack of affordable housing in Ann Arbor “by any means.”
“I think it’s a profiteering band-aid to the affordable housing issue. Leases mostly exist to protect tenants’ rights,” Ackerman said. “And if a tenant is entering in a relationship with a landlord without a lease, they’re entering into it without any right whatsoever, which means any personal property they bring into the property, they’d have no proof it’s their own. And the landlord or any other tenant could lay claim to it, and the original tenant would have no legal recourse whatsoever. So this is an extremely dangerous proposition for a tenant, and I would strongly not recommend any tenant enter into it unless they’re in desperate enough straits.”
LSA senior Christopher Olson, co-president of the University of Michigan’s Roosevelt Institute –– a student-run, progressive think tank and advocacy organization –– said the phenomenon is a symptom of the affordable housing problem in Ann Arbor and similarly cautions renting without a lease puts tenants at the whims of their landlord. Rents have risen steadily in Ann Arbor in last decade — the median rate for rent in Ann Arbor increased 14 percent from 2010 to 2015 reaching $1,075 per month, despite the amount of high-density housing areas also rising by 32 percent.
“I would think that (month-to-month rentals) are more of a symptom of the fact that we have an affordable housing problem here,” Olson said. “Leases provide legal protections to tenants in a number of ways. They have to give you notice of entry, they have to fix the stuff that you ask them to fix. Not having a lease puts you more at the discretion of the landlord.”
Gayle Rosen, a lawyer with Student Legal Services, the University’s law office for students, said verbal agreements between a tenant and landlord can be legally binding, if they meet certain criteria, though she “certainly wouldn’t recommend” it.
“You have to agree to certain terms in order to have a valid verbal agreement,” Rosen said. “You have to agree on the rent amount and the length of time that you’re going to be there, but it could just become a month-to-month lease, where each month the other party gives notice that they were terminating the lease, that it continues. It’s effectively a verbal agreement, a verbal lease.”
According to Rosen, University students almost always sign leases and she does not often see cases of disputes between tenants and landlords without a lease.
“I don’t see it frequently,” Rosen said. “I’ve seen it probably less than five times. Sometimes they’re sublease situations, where someone wants to sublease and they do that without a written agreement and that’s a little bit more common. Why they do it, I don’t know. In some instances it might be they never got around to signing a lease. I certainly don’t think it’s a preferred option because the lease is a little bit unclear.”
Students and Ann Arbor residents alike have mobilized this year to revive the Ann Arbor Tenants’ Union, which shut down in 2004 due to lack of funding. Students were then redirected to Student Legal Services for mediation and legal assistance. Last month at a Central Student Government meeting, however, SLS director Doulgas Lewis said he’d like to see the union in action again.
“The tenants’ union helped a lot of things happen in government in this town that wouldn’t have happened without it,” Lewis said at the meeting. “I think their last shot was trying to get rent control in Ann Arbor.”
In the end, Young and his girlfriend did not rent the space. The room in question was $600 per month with a bathroom and access to a kitchen and living room, but Young did not feel the space was an adequate return for the rent.
Young said his past experiences have led him to trust his landlords. He would, however, like a written agreement stating his security deposit is refundable.
“I’ve done it before in the past and never had no problems. But I feel like you ought to have something written out to give me so you can let me know that I’ll be assured I can get my security deposit back,” Young said. “We be on even playing fields. Because (the landlord) needs a security deposit, to make sure his place won’t get damaged, and I need something written saying that I get my security deposit back if nothing’s damaged. And that’s good business.”