How do I set up an escrow account?

[Anisah_H]

What is the name of your state? Michigan.

I am having problems with my landlord (dealing with a Realtor) fixing things in my apartment. I want to put my rent into an escrow account. I called my bank but it seems like they don't do this. They only do escrow accounts with mortgages. Anyone set up a personal escrow account, or have any ideas or advice for me?

Thank you.

Anisah

[seniorjudge]

Find a bank who knows what an escrow account is.

I fully believe your story since I can give you the name of a bank and the names of people in the bank who had never heard of escrow accounts.

Now, as to whether your idea is a good one, I'd say no.

[tranquility]

Why bother? All it's going to mean is you are not paying your rent. The landlord can evict you for this. That you determine something to be "escrow" does not make is so.

Escrow is an agreement between two or more people which will distribute funds deposited according to the agreement. To be acceptable, both parties must trust the escrow agent. Do you have such an agreement with the landlord?

[COlandlord]

If your state allows you to withhold your rent and you have followed all your state laws in regards to this, I would open a savings account strictly for holding the rent money. This way you can show the funds were readily available for rent if it ever went to court.

[applecruncher]

Call your county clerk of courts. You can put your rent into escrow and they will notify landlord, and set up a mediation. Best if you have evidence of written requests to repair things, particularly if they pertain to safety/security issues. You landlord CANNOT evict you for doing this, and you don’t have to go thru a bank.

[MIRAKALES]

The county court clerk can provide information and instruction on how to withhold or escrow rent payments in order to cure damage or perform repairs. The damage or repair must be serious enough to cause an issue of habitability. (Tenant did not mention what items need to be fixed.) The court will determine whether escrow can be held in order to cure the damage and repair. The court would hold the monies in their official account. A hearing will be necessary to make that determination.

[treese]

There are steps that must be taken prior to This issue is covered on pages 26 through 28 in Michigan's Tenants and Landlords A Practical Guide.


B. IMPORTANT STEPS TO TAKE IN
SOLVING THE PROBLEM(S)

Depending on the problem, requesting that
a repair be made could be as simple as a quick
phone call or as complicated as filing a
lawsuit. Outlined next are the recommended
steps to take to solve a repair and
maintenance problem:

STEP 1: Notify the landlord and provide
reasonable time for repair.
Keep it simple. The tenant must notify the
landlord and explain the situation, the
importance of the repair, and when he or she
would like it done. A simple phone call usually
works. Sometimes, however, the landlord
requires that a specific form or repair order be
filled out before proceeding. Read the lease
and talk to whoever is in charge and figure out
the best course to take. Keep copies of
communications and note discussions.
Municipalities have enacted housing codes—
establishing minimum standards—to protect
the rights of both the landlord and the tenant.
Contact the local city hall for information.
Remember: the landlord must be given
reasonable time to make repairs.

STEP 2: Contact the building inspector and
schedule an inspection.
In some municipalities, if the rental
property is up to municipal code standards,
the tenant will be responsible for paying the
inspector’s fee. If it is not up to code, the
landlord pays the fee (and may also have to
pay a re-inspection fee once the repair is
made). Call the local inspector’s office to find
out how much the fee will be.

STEP 3: If the landlord has failed to make
necessary repairs, either withhold the rent
and deposit it into an escrow account OR
pay for the repair and deduct the cost
from the rent.

But remember: the landlord must first be
provided with notice of the problem, and must
then be given a reasonable amount of time to
fix the problem.

Escrow Account: A bank account or other
account held by a third party, generally
established in the name of the tenant, into
which whole or partial rent payments are
deposited to show that the tenant was ready,
willing, and able to pay the rent, but is
withholding the rent until a certain problem is
fixed that the landlord is legally responsible for
fixing. Once the problem is taken care of, the
escrowed rent amount will be released to the
landlord.

■ If the rent, or a portion of it, will be
withheld for the purpose of addressing the
maintenance or repair issue(s), the tenant
A Practical Guide for Tenants and Landlords 27
should send a letter—certified mail, return
receipt requested—stating why the rent will be
withheld, where it will be deposited (what
financial institution), and that payment will be
released when the maintenance or repair
problem has been corrected.

■ If the repair cost will be deducted from
the rent, call for three repair estimates. If it is
a do-it-yourself job, shop and compare the cost
of parts. Reputable repair companies will come
to the house and provide a free written
estimate. Send copies of the estimates to the
landlord and state that the problem will be
fixed unless the landlord agrees to do it by a
certain date, and that the cost of repair will be
paid from the rent withheld. Keep all receipts
and note the dates of repair; send copies to
the landlord, along with the remaining portion
of the rent.

(Note: While the repair-and-deduct method may
work well for small repairs, it may not work for
large repairs.)

Q1 How much rent should be withheld?
The amount of rent withheld must
reasonably relate to the cost of fixing the
problem or to the amount of damage the
tenant has incurred because of the landlord’s
failure to fix the problem. Withhold less for a
clogged drain. Withhold more for an unusable
toilet or shower. Only the most catastrophic
problems will warrant withholding all of the
rent. In any event, the amount withheld must
be deposited into an escrow account.

Q2 What if the tenant lawfully withholds
rent and the landlord starts the
eviction process?
If the landlord has a run-in with the
municipal code enforcement office OR if the
landlord does not receive the rent, he or she
may well decide to start the process for
evicting the tenant. Nevertheless, Michigan law
provides the tenant who was acting lawfully
with certain defenses. The tenant, however,
must be able to prove the facts giving rise to
the defense:

1. A claim of retaliatory eviction. There exists a
presumption of retaliation if the landlord
started the eviction proceedings within
90 days of the tenant trying to enforce his
or her rights under law (e.g., reporting
health and safety code violations, exercising
rights under the lease, filing a complaint
against the landlord for a violation of the
law).

2. The landlord’s breach of the warranty of
habitability and duty to repair. The tenant
must show that the landlord was provided
with notice of the problem and given a
reasonable amount of time to fix the
problem. The tenant must show that the
landlord failed to make the necessary
repairs.

3. Rent was properly withheld and escrowed.
The tenant must be able to show that “but
for the repair and maintenance required, he
or she was ready, willing, and able to pay
the rent.”

The eviction process takes time—from start
to finish, it takes as few as 27 days or as many
as 57 days to evict a tenant. In the meantime,
the landlord has mortgages, taxes, and bills to
pay. Financial pressure may cause the landlord
to negotiate. If the landlord will not negotiate,
and if the tenant has carefully documented all
communications about the needed repair and
maintenance, the tenant may well succeed in
the lawsuit for eviction.

Both the landlord and the tenant should
remember that, in many disputes, the basic
issues become obscured by personal
disagreements that develop and continue to
grow and fester. If an agreement cannot be
reached, try mediation—either before a lawsuit
is filed or after. Mediation might help to
empower the parties to use their own problemsolving
skills, to take responsibility, and to find
solutions that best meet their needs, while
strengthening the landlord-tenant relationship.


[url]http://www.senate.michigan.gov/dem/publications/tenantlandlord.pdf[/url]