Mid-Month Closings and Rent Proration in Michigan: How Title Companies Calculate It
Closing a Michigan rental on the 1st is clean. Closing on the 17th gets interesting. Rent, security deposits, prepaid utilities, association dues, and property tax all need to be split between the seller and buyer.
The Default Michigan Convention
Michigan title companies typically prorate using the actual days in the month (not 30-day banker months), with the seller responsible for the day of closing unless the purchase agreement specifies otherwise.
Rent Proration: Already-Collected Rent
Tenants typically pay rent in advance on the 1st. If you sell on May 17 with $1,500 monthly rent: $1,500 / 31 = $48.39 per day. Buyer’s share for May 18-31 = 14 x $48.39 = $677.42. That amount is credited to buyer on the settlement statement.
Rent Proration: Unpaid Rent
If rent has not been collected (tenant behind), title companies typically do not credit the buyer at closing. The buyer takes the property subject to the unpaid receivable. Some purchase agreements address this with an as-collected clause.
Security Deposits Are Not Prorated
Security deposits do not get prorated; they transfer in full because the buyer assumes the future return obligation. Michigan practice is to credit the buyer at closing for the full deposit balance per the deposit ledger.
Property Tax Proration
Michigan property taxes are tricky because of the dual billing cycle: summer billed July 1, winter billed December 1. The Michigan rule presumes summer taxes paid for July-June and winter for December-November, with each side responsible for their period of ownership.
Skip the Math, Sell for Cash
If a mid-month closing on your Michigan rental sounds like more paperwork than you want to manage, Offer Now Michigan handles the rent proration, deposit transfer, and tenant notification as part of every closing. Call (810) 547-1135.