Rentals in Israel- Where has the market come to and tips to close the deal
Updated: Dec 2, 2018
Finding a temporary housing solution in Israel can be quite a difficult task, especially in areas where the demand in the market significantly exceeds the supply. Recently I have witnessed a case where close to the expected time of signing a lease, when the tenants believed all the conditions had been finalized, the landlord raised the rent and changed the conditions after being approached by other potential tenants.
Are property owners taking advantage of the high demand? Ultimately it is their right as no one is making the tenants rent their properties on those terms and there are other areas in the city and outside the city altogether with properties being rented at a significantly lower rate. Having seen many friends and clients, whether Olim Chadashim finding their first home in Israel, or residents who have been required to vacate their apartment, struggle with finding a temporary or long term rental, I realized that it is crucial to provide guidelines as to what to include in a lease agreement and what is important to take into consideration at the initial stage when searching for a property to rent.
Below are numerous tips that both the landlord and tenant should consider and address prior to signing a lease:
1. Inspection - Make sure to inspect the rental properly prior to signing the lease. Upon receiving possession, make sure to document the state of the apartment and its fittings, by taking both pictures and videos which shall ultimately serve as evidence of any existing defects or problems, in order to avoid future disputes on this matter. For example, if the property is freshly painted, most likely that is how one will be required to return it.
2. Repairs – In general the landlord is solely responsible to repair all damages and defects caused by normal and reasonable wear and tear. With that said, the tenant should be responsible to fix any damage caused by negligence or unreasonable use on his part.
3. Early termination - Both landlord and tenant may find themselves in a situation in which they may need to terminate the lease before the end of the agreed upon rent period. One should therefore include a clause allowing early termination subject to providing advanced prior written notice, or alternatively allow the tenant to find a substitute tenant to take over the lease. The landlord should make sure he has the right to determine if the new tenant is acceptable to him, consent that should not be unreasonably withheld.
4. Extension – The tenant should ask to include an option to extend the lease period. As moving homes is a costly and stressful experience, it is invaluable to have the option to continue residing in the same property for a longer period of time. In order to avoid unreasonable increase in the rent payments, make sure to specify the rent price in the option period and require advanced written notice when executing the option.
5. Obligations – Be wise and be sure to follow the do’s and don’ts set in the lease agreement. For instance, if you are not allowed to have pets in the rental, don’t. If the landlord refuses to allow any business to run out of the property, or for the tenant to make any changes to the property, it is crucial to include these prohibitions in the lease.
6. Insurance - It is highly advisable to insure the rental with both content as well as third party insurance. Often the landlord will demand that they be added to the policy to avoid situations where the landlord gets sued by the tenant or their guests. The landlord on the other hand, should maintain structure insurance as well as coverage for water damage, fire, earthquakes and force majeure.
Payment and Utilities - The rent payment is one of the most fundamental terms of the lease agreement. To ensure payments are made in a timely fashion, post-dated checks should be provided in advance for the entire lease period. Additionally, in order to make sure the landlord does not have debts to utility companies such as the electric and water companies, gas provider, municipal taxes and building committee, collecting blank checks to cover these payments is a common demand. Upon termination of the lease the checks should be returned to the tenant once proof is presented that all payments were made
7. Securities - As real estate is one of the most valuable assets, the landlord should ensure rent payments as well as utility payments and potential damage costs by receiving sufficient securities such as: a three months’ rental fee deposit, a bank guarantee, guarantors and/or promissory note.
8. Right of first refusal- The landlord could decide to sell the property and therefore the tenant may opt to make sure the lease grants the right of first refusal to purchase the property at the asking price. Additionally, it would be wise to stipulate in the lease that the landlord may sell the property as long as the tenant’s rights under the lease are unharmed.
In conclusion, there are various ways for each party to protect himself and this can and should be done amicably while taking everyone’s best interests into consideration and with legal consultation throughout the process.
Disclaimer: The information provided is of a general nature and should not be construed as legal advice. For additional information contact Adv. Amira Solow directly by email firstname.lastname@example.org or phone 050-7435193
Amira Solow is a bilingual attorney with over 12 years of experience specializing in real estate and inheritance law in Israel. After graduating from the Law Faculty of Bar Ilan University, Amira worked in the field of real estate and inheritance law runs her own firm- Solow Law offices.