Guest contributor: Russell D. Mayer, Adv.

When you consider establishing your foothold in Israel, you will likely be confronted with the some of the following issues to consider regarding real estate: (a) whether to purchase or rent, (b) the location of the property you would consider, (c) whether to acquire an interest for investment purposes or for your own residence, (d) whether to finance or not, (e) olim rights and (f) tax ramifications of your decision.  In this article, we will briefly address some of the aspects of renting residential property.

There are three individuals with whom you will likely be involved in selecting your rental property: (a) a real estate broker, (b) a lawyer, and possibly, (c) an engineer.

The fees for the real estate broker are payable by the party with whom they contracted and are usually in an amount equal to a month’s rent plus Value Added Tax (VAT), which is currently at the rate of 18%.

Please be aware that it is common for real estate brokers to ask you to sign a brokerage agreement before viewing an apartment. If both the landlord and the tenant hired the broker, it is possible that both sides would have to pay the fee. If you have signed such an agreement, you will be required to pay the broker’s fee should you choose to proceed with leasing the apartment.

Lawyer’s fees in rental transactions are also usually in an amount equal to a month’s rent plus VAT.  Some lawyers charge less for various reasons.

Engineers typically charge fixed amounts (unrelated to the amount of rent).  While it is not crucial that you have an engineer inspect the apartment before you sign the lease, they often discover defects that prospective renters do not notice.

Primary Duties of Tenant and Landlord:

• Repairs – Generally, the tenant is only responsible for repairing damages caused by unreasonable use. Leaks, mold, and general safety issues resulting from structural malfunctions are generally the landlord’s responsibility. On the other hand, when damages occur due to unreasonable use by the tenant, the tenant will be held liable for the damages (e.g., flushing wipes in the plumbing system). The law dictates that the landlord must fix the problem within a reasonable time, and no later than 30 days from the date he was notified of the issue.
• Security Deposits – The total amount of all cash equivalent security deposits (e.g., cash, deposited checks, bank guarantees) cannot exceed the lower of two amounts: three months’ rent or an amount equal to one-third of the rent for the total lease period. For example, if a tenant signs a one-year lease with a monthly rent of 5,000 NIS, three months’ rent would be 15,000 NIS, while one-third of the lease period would be 20,000 NIS (4 months out of 12 months). The deposit must be returned within 60 days after the lease ends, or 60 days after the tenant has settled any outstanding debts.
• Apartment insurance – The landlord is responsible for covering the building’s structural insurance for the apartment, whereas it is common for the tenant to be obligated to obtain insurance for their property and third-party liability.

Common Provisions in Residential Leases in Israel:

• details of the landlord and tenant – make certain that they are correct and that the prospective landlord has the right to enter into a lease for the property (perhaps via a power of attorney);
• confirmation of it not being a protected tenancy (דיירות בלתי מוגנת) – (e.g., rent-controlled apartments in NYC);
• clear identification of the property, including address, any apartment number if applicable, floor number, number of rooms, storage areas, yard, parking rights;
• contents included in the lease (furnishings, appliances, electronics, phone line, internet, cable) – Israeli leases, by default, include no more than the walls – not appliances, nor lighting fixtures;
• warranty from the landlord that they have and are conveying exclusive, unencumbered use of the premises;
• term of the lease, amount of rent (currency for calculation, method of determining – e.g., linked to Dollar, COL, and means of payment);
• use of premises (e.g., residential);
• declaration as to the condition of the apartment – what repairs are incumbent upon the landlord/tenant’s waiver of defects (make sure it states other than hidden defects) – you MAY want to invest in an engineer for this purpose;
• duty of care/maintenance – incumbent on tenant/landlord;
• duty to repair/paint – if relevant – caution if tenant expected to paint at end of lease – it is NOT automatically expected – certainly not if it was not freshly painted for you at the beginning of the lease;
• insurance obligation? What insurance and who provides it?
• what additional payments are required of the tenant (e.g., Arnona, utilities, internet, phone)
• other obligations of the tenant/landlord;
• option(s) to extend – terms/rent amount in option term(s);
• option to purchase – registration requirement (consult with your lawyer);
• right of sublet? Assignment? Early termination (mutual?);
• security/collateral/promissory note/guarantees – when the collateral must be released;
• penalties for late vacation/holding over;
• requirement to return the apartment in the same condition as at commencement of lease – be certain that it states “other than reasonable wear and tear;”

Some Issues for Consideration:
(i)        your lawyer should make certain that the lease reflects your expectations, such as whether you will have access to a storage room/area (known in Hebrew as a “Machsan”), a parking space, and a yard – if applicable.  That which is not reflected in the lease will be difficult if not impossible to prove after you sign – and may cost you extra if you come to the realization after the lease is signed (“oh, you intended for the storage room to be available to you? That will cost you another X per month”);
(ii)       your lawyer should review with you and try to negotiate on your behalf the terms of collateral which you will likely be required to provide (e.g., promissory note (Shtar Chov), guarantors, checks to utilities);
(iii)      you/your lawyer should negotiate payment terms (e.g., how many installments, post-dated checks, linked to what currency);
(iv)      before signing, you should turn on faucets to see if water pressure is adequate, that water drains quickly, and that the faucets do not drip – again, investment in an engineer may be advisable;
(v)       you or your engineer should look in corners on the ceiling for signs of Retivut (seepage);
(vi)      if possible, check to see if the current occupants overload the electrical system (ask them if the lines are adequate);
(vii)     ask current occupants about noise from neighbors (or neighbors’ sensitivity to noise from the apartment);
(viii)    see if the home requires painting. You should discuss with your lawyer whether you expect the apartment to be painted before you move in and whether you are prepared to paint when you vacate – often an issue in lease negotiations;
(ix)      make a list of any items that you wish to ensure are in the premises when you move in – those items and their condition should be noted in the lease.  Local practice considers a lease to include the walls and little else – appliances are not automatically included (not even an oven or fridge, let alone washer and dryer), nor furnishings, nor even light fixtures, etc.;
(x)       if you expect the landlord to supply you with a telephone line you should ask your lawyer to make certain that it is reflected in the lease;
(xi)      verify and record the readings on the gas, electricity, and water meters before the term of your lease begins (similarly, when you vacate the premises);
(xii)     do a walk-through with the landlord, noting defects, scratches, and damage.  Record it with video – if you do not have a walk-through with the landlord, make certain that you record your own walk-through – same goes for when you leave.

Putting down roots in Israel through acquiring an interest in a home, whether for investment, rental, or purchase, is one of the most satisfying and meaningful ways of showing your commitment to the home of the Jewish people in the State of Israel.  As you can see, there are MANY issues to consider before you commit to a rental – I recommend that you invest in hiring professionals, especially lawyers, which will cost you in the short term but can very well save you the anguish and cost in the long term.

This article is for informative purposes only and is not to be considered as a legal opinion. For legal advice, we suggest that you contact legal counsel directly.

Russell D. Mayer is a senior partner at the Jerusalem-based law firm of Livnat, Mayer & Co.  (www.LMF.co.il).  If you have any comments or questions with respect to this article, please contact Russell at [email protected].

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* Last updated on May 7, 2025 *