Renting an apartment seems like a casual affair, especially if you’ve come from a country where rental complexes and professionally run rental buildings are the norm.
In Israel, however, you will be dealing with private landlords, who are renting apartments or homes that they likely purchased, or held onto, as an investment. This affects the nature of the lease agreement in myriad ways, and tenants need to be careful before entering into lease agreements there.
Dealing with a private owner means that you, or an Israeli lawyer, must check that the person signing the lease is, indeed, the registered owner of the apartment and is entitled to rent it out.
So, if you like an apartment, get the owner’s full name and Israeli ID number, along with the Block/Parcel number of the apartment. Ownership can then be verified through the Israel Land Registry records.
One issue to watch for is married owners, with one of them insisting that they can sign the lease with you and the other spouse will sign later. For all you know, the couple is in divorce proceedings, and the spouse you haven’t met doesn’t agree to rent the apartment.
You want to make sure that the owners registered on title are those signing the lease with you, or that whoever is out of the country has provided a power of attorney for someone else to sign on their behalf.
A similar problem could occur when a parent has passed away and an adult child living in Israel decides to rent out the apartment before probate has concluded who the lawful heirs are. If you find an apartment like this, a lawyer can verify the status of the probate and protect your rights as tenant.
Another surprise in the Israeli rental market is the meaning of “unfurnished.” Israeli unfurnished translates as a barebones shell, with no closets, light fixtures, refrigerator, oven, dishwasher, or washer/dryer.
Since walk in closets are not the norm in Israel, IKEA type wardrobes function as closets; and these are not fixtures, so owners will often move them to a new home.
With that in mind, if you need appliances, but have furniture, then look carefully at the “partially furnished” apartments. It is important that the list of partial furnishings be included in the lease agreement, so that if the owner is providing appliances, he/she will undertake to repair or replace an appliance if it breaks.
This will often be a major point of contention. Appliances are expensive, and owners usually do not want to deal with buying or repairing. Therefore, it is critical that the lease agreement specify the appliances included and the responsibility for repairs. You want to be sure the agreement protects you should there be repairs.
The Law of Leasing and Borrowing (1971) contains provisions that apply to rentals if no lease agreement applies. The overwhelming majority of owners will use lease agreements that have provisions far more favorable to them than those in the wording of the law.
To protect your rights, you want a mechanism for notifying the owner of any damage, with the owner obligated to repair the damage within 24-48 hours, at their expense. If the owner doesn’t repair, provisions allowing you as tenant to make the repair and set off the cost are practical, though owners will rarely agree to this.
When the apartment owner lives outside Israel, a tenant’s right to set off becomes even more important, as the owner may not be around to make the repair or to find the plumber or electrician you need.
Other expenses tenants pay include municipal taxes, water, electricity, house committee payment, and cable TV/Internet. Most lease agreements require tenants to transfer the municipal tax bill onto the tenants’ names for the duration of the lease, so that the tenants are responsible if they default.
The house committee payment covers maintenance of the building. To protect the tenant, the lease should distinguish between routine house committee payments, which the tenant pays, and special collections designed to repair or improve the building, which the owner should pay.
The most unpleasant aspect of renting an apartment in Israel is the securities that owners will demand. Although rental payments are typically monthly, the securities demanded can be onerous.
Owners request three main types of securities: a bank guarantee, promissory note signed by yourself and two guarantors (who will need to provide pay stubs), and a personal check made out to the owner and post-dated for the date of the expiration of the lease.
Often, an owner will demand all three of these. At the very least, you can expect to provide two of them.
These are designed to protect the owner in the event that the tenant moves out before the lease is up and doesn’t pay rent, or moves out, leaving damage to the apartment.
An owner is allowed to sell the apartment while a tenant is living in it. The Law of Leasing and Borrowing protects tenants in this scenario, and you can complete your lease period.
However, as a practical matter, you would be dealing with a new owner, and the communication, or method of handling repairs might change, even if the lease agreement seems clear on these matters. On the flip side, you, as a tenant, will almost always be prohibited from sub-leasing, according to the terms of any least agreement.
Here is a brief list of additional subjects addressed in a lease agreement:
Insurance, breach of contract and penalties, return of securities, purpose of the rental (i.e. residential and not business), the option terms and how to exercise them, payment schedule and method of payment (bank deposit, check by mail), owner’s warranties as to electrical/plumbing, owner’s rights to enter apartment, tenant’s obligations to maintain apartment and refrain from disturbing neighbors, inventory (furnishings and appliances).
For some tenants, the most irritating aspect of the Israeli rental market is that it is virtually impossible to find a long-term rental. Since you are dealing with private owners, rental periods are typically one year, with an option if you request it.
This translates into moving frequently, since owners may decide to move back into their apartments, sell them, or gift them to their children. So if your goal is long-term rental, try to find an owner willing to provide a long lease term at the outset.
Good luck with your search.
Deborah Opolion-Elovic is a licensed attorney in Israel and Wisconsin, specializing in Israeli real estate and Israeli probate. This article is intended as general information and should not be deemed legal advice. For more information, visit www.opolionlaw.com or call 414-305-6183.
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