Michigan's 6-year SOL (MCL 600.5807(8)) gives tenants a strong CAM recovery window. Detroit and Grand Rapids face capital and management fee overcharges.
TL;DR: Michigan's 6-year SOL (MCL 600.5807(8)) gives commercial tenants one of the wider Midwest recovery windows. Detroit industrial tenants should watch for capital improvement misclassification; Grand Rapids retail tenants for management fee and controllable cap overcharges. Act before 2020 reconciliations expire.
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CAM Overcharge
A CAM overcharge occurs when a landlord bills a tenant for common area maintenance costs that exceed what the lease permits, whether through incorrect math, improper cost categories, or flawed pro-rata share calculations.
Michigan's six-year statute of limitations for written contracts gives commercial tenants one of the broader recovery windows in the Midwest. The state has no dedicated commercial CAM statute. Michigan's diverse commercial real estate market, anchored by Detroit's industrial renaissance and Grand Rapids' growing retail and mixed-use corridors, generates specific CAM billing patterns. Detroit industrial tenants frequently encounter capital improvement misclassification during the significant renovation work occurring in the metro's older building stock, while Grand Rapids retail tenants face management fee and controllable expense cap issues in newer strip center development.
“Detroit's industrial renaissance has been remarkable to watch, but it's created a generation of NNN tenants in renovated buildings where the line between capital improvement and maintenance is blurry by design. I built CAMAudit to detect exactly those misclassifications, and Michigan's six-year window gives tenants real leverage to recover what was improperly billed during the renovation years.”
Michigan has no statute specifically protecting commercial tenants in CAM disputes. The Michigan Landlord-Tenant Relationships Act (MCL 554.601 et seq.) applies primarily to residential tenancies. Commercial leases in Michigan are governed by general contract law.
Michigan courts apply standard contract interpretation principles: unambiguous terms are enforced as written, and ambiguous terms are resolved using extrinsic evidence including trade usage, course of dealing, and commercial context. Michigan's commercial real estate market uses a mix of ICSC standard forms, AIR Commercial forms, and landlord-drafted custom leases, and the level of tenant protection varies significantly depending on the lease form.
Michigan has no mandatory commercial records production statute comparable to California's SB 1103. Without a negotiated audit rights clause, a Michigan commercial tenant must rely on general contract law to demand CAM records, with litigation discovery as the primary enforcement mechanism if the landlord refuses.
MCL 600.5807(8) establishes a six-year limitations period for actions on written contracts. Michigan commercial leases are written contracts, and CAM overcharge claims are breach of those contracts. The six-year period applies.
Under Michigan law, the SOL begins when the claim accrues. For a breach of contract, accrual typically occurs when the contract is breached. For CAM overcharges, the breach occurs when the landlord delivers the annual reconciliation containing the improper charge. Michigan courts have applied a discovery rule in certain fraud and concealment cases, but straightforward billing errors do not typically benefit from discovery rule tolling.
Key implication: A reconciliation statement delivered in April 2020 has a limitation deadline of approximately April 2026. Michigan tenants who have never audited their reconciliations should act promptly before 2020 statements age out.
Michigan courts enforce lease-defined dispute windows as contractual conditions. A lease requiring written objection within 30 to 90 days of receiving the reconciliation is enforceable, and missing that window can bar the dispute for that year even though the six-year statutory period remains open.
Some Michigan commercial leases, particularly older downtown Detroit office leases, use "account stated" provisions where failure to object within a specified period after receiving a statement makes the amount "due and payable without further question." Michigan courts have enforced these clauses in commercial contexts, making the lease dispute window potentially more important than the statutory SOL.
Detroit's industrial real estate market underwent a significant renaissance between 2015 and 2024, with substantial investment in renovating older manufacturing and warehouse facilities in the greater metropolitan area. Hamtramck, Warren, Dearborn, and Romulus have seen major industrial activity. This renovation cycle created specific CAM billing issues:
Capital improvements during renovation billed as operating expenses. Roof replacements, structural repairs, electrical system upgrades, and loading dock renovations are capital items. During Detroit's industrial renovation period, landlords frequently passed these costs through as one-time operating expenses rather than amortizing them over the improvements' useful lives. A tenant who signed a five-year lease during a building renovation absorbed capital costs that should have been spread over 15 to 30 years. CAMAudit's Rule 12 (Common Area Misclassification) identifies capital items in the operating expense pool.
Shared utility infrastructure in multi-tenant industrial parks. Many Detroit-area industrial parks share electrical, water, and natural gas infrastructure across multiple buildings on a common utility account. The cost allocation methodology for shared utilities is frequently the source of disputes: when one tenant runs a high-energy manufacturing process and another runs a clean warehouse, flat pro-rata allocation of shared utility costs results in the warehouse tenant subsidizing the manufacturer. CAMAudit's Rule 11 (Utility Overcharge) addresses utility allocation errors.
Grand Rapids has emerged as one of Michigan's strongest retail markets, with active development in the West Michigan Avenue corridor and the Breton Road retail area. Grand Rapids retail CAM issues include:
Management fee overcharges in newer properties. Grand Rapids retail development from 2018 to 2023 frequently involved out-of-state property management companies with standardized fee agreements that did not align with the individual lease terms negotiated locally. Management fees applied to total gross revenues including taxes, insurance, and utilities rather than to controllable operating expenses only result in fees that substantially exceed lease caps. CAMAudit's Rule 3 (Management Fee Overcharge) checks this calculation.
Controllable expense cap violations. Post-pandemic inflation hit Grand Rapids retail operating costs hard in 2021 through 2023. Janitorial, landscaping, and security costs increased 18 to 25 percent year over year in many markets. When leases include a 3 to 5 percent controllable expense cap, these inflation-driven increases constitute cap violations. CAMAudit's Rule 6 (CAM Cap Violation) identifies when billed controllable expenses exceed the lease-defined ceiling.
A 28,000 SF warehouse tenant in a renovated Hamtramck industrial building, five-year NNN lease signed in 2019. Building was renovated in 2017 to 2018.
CAM history:
| Year | CAM Billed | Capital Items Included | Notes |
|---|---|---|---|
| 2019 | $52,000 | $0 | Standard first-year operating expenses |
| 2020 | $54,400 | $0 | Normal increase |
| 2021 | $78,600 | $26,000 | Roof replacement billed as operating |
| 2022 | $61,200 | $8,000 | Electrical panel upgrades billed as maintenance |
| 2023 | $58,800 | $4,000 | Additional electrical work |
The 2021 roof replacement ($220,000 building-wide) was billed entirely as an operating expense in the reconciliation year. This tenant's 12.7% share: $27,940. Under a 20-year amortization: $1,397 per year. Overcharge in 2021: $26,543.
The 2022 and 2023 electrical work ($67,000 combined) was described as "electrical maintenance and upgrades" but replaced panel infrastructure with 25-year useful life. Tenant's share: $8,509 billed vs. $340 per year amortized. Combined overcharge: $8,169.
Recovery calculation (6-year Michigan SOL):
| Category | Annual Overcharge | Years | Total |
|---|---|---|---|
| Roof replacement capital billed as opex | $26,543 | 1 (2021) | $26,543 |
| Electrical capital billed as maintenance | $8,169 | split 2022-2023 | $8,169 |
| Total estimated recovery | $34,712 |
CAMAudit flagged Rule 12 on this reconciliation, identifying both capital items.
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Find My Overcharges| Statute | Description | Link |
|---|---|---|
| MCL 600.5807(8) | Six-year statute of limitations for written contracts | Michigan Legislature |
| MCL 554.601 et seq. | Michigan Landlord-Tenant Relationships Act (primarily residential) | Michigan Legislature |
For the full state-by-state SOL comparison, see the CAM Overcharge Lookback by State guide.
For the complete framework on commercial tenant audit rights, see the How to Dispute CAM Charges guide.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed Michigan attorney for advice specific to your situation.