A guide to renting an apartment in Israel and what to look out for in the Lease

Renting in Israel can be a very harrowing experience. We hope this guide will point out some of the pitfalls. A new law passed in July 2016 is important to be aware of, see more here:

http://www.jpost.com/Israel-News/Fair-Rental-Law-passes-final-vote-six-years-after-housing-protests-500016

1. Always have a native Hebrew speaker translate and explain the lease to you at first. Make sure the names, IDs, details of the property, dates, rental amounts, currency and how and when it is to be paid etc. are all correct.

2. If you are granted an option (אופציה), make sure it is binding on the Landlord; i.e. the rental amount is fixed or allows for a limited increase and you have the right to exercise the option by giving written notice by a certain date.

3. You can request the right to cancel the lease with 60 days’ notice, for example, but the Landlord will have the same right. It should always be equal for both parties. A recommended alternative is to have the right to bring in a replacement tenant who will take over the lease and the Landlord cannot refuse the replacement except for reasonable causes.

4. Unlike in many countries, rental amounts in Israel do not usually include the following items that must be paid by the tenants: electricity, gas, water, telephone, internet, Vaad Bayit (condominium fees) and Arnona (property tax). New Olim are entitled to up to 90% off their Arnona for one of the first two years after Aliyah.

5. All rental contracts contain a clause stating the lease is an “Unprotected Tenancy Agreement (שכירות בלתי מוגנת)” and that you have not paid any key money. This means the tenancy is not subject to rent control and that when the lease period is up you have to vacate the apartment, you don’t have any lasting right to live there or transfer the tenancy to family members.

6. Short term rentals should have far fewer clauses but it is still important to carefully read and understand the agreement, your rights and responsibilities as a tenant and the securities given and when they can be activated.

7. You will be asked to declare that you have seen the property and it is acceptable to you. Make sure to add “subject to hidden defects למעט פגם נסתר” and also “except for the list of current defects to be prepared by the parties on the day of taking possession”. The lease will also say that you will carry out any repairs, and it must state “except for those caused by normal usage or reasonable wear and tear למעט נזקים הנגרמו ע”י בלאי סביר ו/או שימוש סביר. It’s also important to add “which repairs shall be carried out by the Landlord within reasonable time of being notified to do so שיתוקנו ע”י המשכיר תוך זמן סביר מיום קבלת הודעה על הנזק.

8. At the end of the rental period you will be required to return the apartment in its current condition, the lease must also state “minus reasonable wear and tear למעט בלאי סביר”. You will also have to vacate after repairing any defects in the property, add again “except for those caused by normal usage למעט אלו הנגרמו ע”י שימוש סביר as well as adding “and except those existing defects contained within the list drawn up by the parties ולמעט רשימת הפגמים הקיימים שנערכה בין הצדדים.

9. You are usually forbidden to sub-let the apartment, so if you are planning on doing so make sure the lease allows it. Also, the lease will state the rental is for residential purposes only and you will not be allowed to use the apartment for business purposes. Some leases forbid pets so look out for that if you have a pet dog/cat/hamster/tarantula. You won’t be allowed to make any changes to the apartment either.

10. The securities are sometimes the most complicated and confusing part of the lease. Add in that no security can be enforced without you first being given reasonable notice in writing to remedy the breach. Make sure the Landlord must return the securities immediately after vacating the property upon providing evidence that all debts have been paid up in full. A Landlord will usually choose one or more of the following:

Guarantors – one or two people who guarantee your obligations. It should add that the Landlord must first attempt to have you remedy the breach before approaching the Guarantor

Cash deposit – usually one or two months’ rent, preferably held by the Landlord’s Attorney if possible

Security Check – to be held by the Landlord / Attorney (if it’s actually deposited then essentially it is the same as a cash deposit)

Blank checks made out to the utility companies

Shtar Chov (Promissory note) is not cashed, it’s a legal obligation held by Landlord / Attorney and filed with the bailiff’s office if you are in breach of the lease

Bank Guarantee – similar to a cash deposit but the money is locked away in the bank and you pay the bank for the privilege of locking away the money and the bank issuing the guarantee

First and last month’s rent – not as common in Israel as other countries but still done

11. Some leases demand that you pay towards the Landlord’s Attorney’s fees. This is not so reasonable, you should stick to your guns and declare “your lawyer, your fees”. You may have to pay a broker (usually one month’s rent plus VAT); the broker should have signed you on a brokerage agreement that specifies the agency fees and the apartment.

12. Insurance can be a clause that some Landlords add and few tenants understand. You may be asked to obtain third party insurance (and possibly contents insurance which you should have anyway) and asked to waive the right of subrogation (ביטול סעיף שיבוב) and also sometimes a cross-liability (אחריות צולבת) clause is added. We highly recommend you speak to one of the English-speaking insurance companies for clarification of these matters. It’s worth asking for this and to have it added to the Landlord’s structural insurance policy because it protects both sides.

We hope this clears up some of the mystery. Don’t be afraid to negotiate and to ask for clauses to be added into the lease and always try and speak to a lawyer before signing.

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