Apartment lease in Israel: key clauses and what both sides should check before signing

The basics: what the law says about a residential lease

Residential rentals in Israel are governed by the Rental and Borrowing Law, 5731-1971 (חוק השכירות והשאילה). The so-called «Fair Rental Law» of 2017 is not a separate statute but an amendment: a chapter on residential rentals, sections 25א–25טו, was inserted into that law.

Three things are worth knowing from the start.

• Written form. A residential lease should be made in writing and signed by both parties, and each party receives a signed copy (section 25ב). An oral lease is not automatically void, but it falls short of the statutory form and its terms are very hard to prove.
• Mandatory rules. The provisions of that chapter cannot be contracted around except in the tenant's favor. A clause that contradicts them has no effect.
• Not every lease. The chapter does not apply, among other cases, where rent exceeds 20,000 NIS per month, where the lease is longer than 10 years or shorter than 3 months, in rentals between family members, in hotels and vacation lets, in assisted living (דיור מוגן), in dormitories, and in protected tenancies under the Tenant Protection Law. If your case is on that list, the rules below may not apply to it.

Core elements of the lease

We do not present a closed list of «clauses without which a lease is void», but in practice a good lease contains the following.

• Parties: full name, ID number and contact details of landlord and tenant; everyone who will live in the apartment should be named.
• Property: exact address, floor, apartment number, number of rooms, and what is included (parking, storage, air conditioners, water heater, furniture, as a list).
• Term: start and end dates, and the terms of any renewal option (for how long and at what price or formula).
• Rent: amount, payment day and method, and CPI linkage if any.
• Deposit or guarantee: type, amount, return conditions and deadline.
• Costs: who pays arnona (municipal tax), building committee fees, electricity, water and gas, and whose name the accounts go under.
• Repairs and upkeep: what is on the landlord and what is on the tenant.
• Ending the lease: notice periods, early exit and its consequences.

It helps to attach a signed condition report with photos dated to the key handover. It prevents most disputes about what was damaged before move-in.

Guarantees and deposits: how much may be demanded

For leases covered by the residential-rental chapter, the law caps the total of all guarantees: it may not exceed the lower of two amounts, rent for 3 months or rent for one third of the lease term. The cap applies where the tenant has to pay something for the security (for example a bank fee for a guarantee, or a cash deposit); ask a lawyer how it applies to other kinds of security. For example, at 2,000 NIS per month, a 12-month lease is capped at 6,000 and a 6-month lease at 4,000. So «three months» is the cap only for leases of 9 months or longer; for shorter leases the «one third of the term» figure applies.

The landlord must return the guarantee within 60 days of the tenant handing back the apartment or settling the tenant's debts, whichever is later. According to Kol Zchut, the law lists the cases in which the landlord may draw on the guarantee (for example unpaid rent, unrepaired damage, unpaid running bills, failure to vacate) and requires prior notice to the tenant. Deductions should be justified.

Types of guarantee carry different risks.

• Bank guarantee, checks, cash deposit, guarantors: agree the return conditions in writing.
• A promissory note (שטר חוב) can be submitted directly to the Execution Office (הוצאה לפועל), bypassing an ordinary lawsuit, so it is wise to consult a lawyer before signing one.

For any deposit, get a signed receipt showing amount and date.

CPI linkage and rent increases

While the lease is in force, rent stays the same unless the contract itself provides for a change. The most common mechanism is linkage to the Consumer Price Index (הצמדה למדד המחירים לצרכן), published by the Central Bureau of Statistics.

What to check in such a clause:

• which base index (month) the change is measured from;
• how often rent is recalculated: yearly, quarterly or on renewal;
• by what formula, and what happens if the index falls: the index can go down as well as up;
• whether the recalculation also applies to the renewal option.

A risky wording is renewal «at market price»: it sets no upper limit. Better to write a fixed amount or a formula. For a new lease the law sets no cap on rent, so the parties agree the amount themselves.

Early exit and notice periods

The first clause to read is the termination clause. It should answer: who may leave the lease before the end of the term and when, how much notice is needed, whether there is a penalty, and whether a replacement tenant can be offered.

According to the Kol Zchut rights portal, for unilateral cancellation not caused by a breach, the landlord gives at least 90 days' notice and the tenant at least 60 days. How this fits your own lease, check on the portal and with a lawyer: the conditions of application may vary, and for leases outside the residential-rental chapter the rules may differ.

What to look at:

• whether the tenant has a right to leave early and on what terms; a penalty should not equal all the remaining rent;
• whether a replacement can be found and whether the landlord may refuse without reason;
• that there is no automatic renewal without a reminder;
• send every notice in writing and keep copies.

Leaving by mutual agreement is always possible: put it in writing. If a tenant does not vacate, the landlord cannot remove them by force: forced eviction needs grounds and a court decision.

Repairs, duties of each side, subletting

Repairs

For leases covered by the residential-rental chapter, the landlord must fix a non-minor defect within a reasonable time and no later than 30 days from the tenant's request, and an urgent defect within 3 days. If the deadline is missed, the tenant may fix it and claim reasonable costs back (after giving the landlord notice) or, while the defect remains, reduce the rent in proportion. To avoid a dispute, make the repair request in writing beforehand and keep invoices and receipts. Day-to-day upkeep, minor repairs and breakage caused by the tenant fall on the tenant. A clause saying «the tenant pays for every repair» does not cancel the landlord's duties.

Disclosure of defects

Before signing, the landlord must disclose a known non-minor defect in the apartment, and any known thing in the apartment or its surroundings that causes or is likely to cause material disruption to its use.

Broker fees

If the broker acted for the landlord, the tenant cannot be made to pay the broker's fee, and a clause saying so is void (section 25ט).

Subletting

Whether the apartment or a room may be sublet is set by the contract. If you need it, state it explicitly: whether it is allowed and whether the owner's written consent is required. A ban should also be written clearly.

Red flags and a free template

Be cautious if you see any of the following.

• No written lease, or you are not given a signed copy.
• Total guarantees above the cap described earlier.
• A promissory note is demanded without explanation.
• The tenant is made to pay the landlord's broker.
• No condition report, with the landlord saying he «remembers everything».
• Every repair on the tenant, and landlord entry at any time without notice.
• Unclear who pays arnona and whose name the accounts are in.
• Blank spaces in the contract that could be filled in later.
• Automatic renewal without notice and a «market price» option.

A tenant should ask the landlord for a land-registry extract (נסח טאבו) and compare the owner's name with the signatory; a landlord should verify the tenant's identity and list everyone who will live there.

For a first draft you can use our free lease template. It is a template, not legal advice: adapt it to your situation and, if needed, show it to a lawyer. Official information on the rental law and sample contracts can be looked up on gov.il, and owners can post a listing on the listing page.

Important disclaimers

This is general information, not legal or tax advice; for your own case consult a lawyer or an accountant.

Laws, thresholds and deadlines change, and exceptions may affect a particular lease. Check current values on gov.il and kolzchut.org.il. Tax on rental income depends on your situation and the year, so we give no figures here: check the current value on gov.il.

Bait·Direct is a listings platform: we are not a party to any lease and we are not responsible for the terms the parties agree between themselves.

Read next

• How to Rent an Apartment in Israel Without a Broker
• Security for a rental in Israel: how much a landlord may ask for and how it is returned
• Arnona, vaad bayit and utility bills in a rental: who pays what
• How to rent out your apartment yourself in Israel without a broker: an owner's checklist