Arnona: Transferring the Account to the New Tenant When the Owner Is Absent

Transferring the municipal tax, or arnona, after a tenant change does not happen automatically. It is an administrative task that falls to the owner and the new resident. The Netanya municipality does not detect a change in occupant on its own if the new tenant is not registered as the primary resident. Without a formal declaration, the bill continues to arrive in the owner’s name, even if they live in the United States.

Declaring the change of resident to the Netanya municipality

The arnona is a municipal tax tied to the person occupying the property, not just the property itself. Unlike in the United States, where property tax responsibilities can vary by local rules, the logic here is clear: the tax follows the declared resident. The owner does not pay the tenant’s share; they transfer it. If the tenant is not declared, the municipality considers the property vacant or occupied by the owner and issues the bill accordingly.

The owner must provide the move-out date of the previous tenant and the move-in date of the new one so the municipality can adjust the monthly billing. This precision is crucial because the arnona is calculated on a pro-rata basis. A date error of a few days can lead to double billing or unpaid amounts. The major difference from the US system is that the tenant change must be actively reported to the municipal administration. In the US, changes in tax liability are often handled through annual filings. Here, it is a specific and immediate step with the municipality. We recommend keeping a copy of the declaration and requesting a receipt from the municipality to prove the filing date.

If the owner is absent, they must ensure the new tenant understands this obligation. Many foreign tenants or new arrivals ignore that their arnona is separate from their utility charges. The lease must explicitly state that the tenant is responsible for declaring their residence and paying the arnona. Without this clause, the owner remains exposed to municipal reminders. It is therefore essential to verify that the tenant has completed this step before considering the transition finished. This step is the first in a series of checks that ensure the property’s tax account is clear.

The role of the land registry and the teoudat zeout

The municipality cross-references data from the tabou (land registry) with the national resident registry. The tabou indicates the legal owner of the property but says nothing about who lives there. The resident registry, linked to the teoudat zeout (Israeli ID card), is the primary source for arnona billing. If the owner is abroad, the municipality may not detect the tenant change if the new tenant is not registered as the primary resident at that address.

The new tenant must ensure their teoudat zeout is correctly associated with this address in the municipal system. This association is done via the civil status service or directly with the municipality. If the tenant is a non-resident or a foreigner without an Israeli ID card, the declaration procedure is different and requires specific identity documents, such as a passport and a visa. In this case, the arnona may be billed directly to the owner if the tenant does not have a valid teoudat zeout. This is a major point of vigilance for owners renting to tourists or expatriates without permanent resident status.

The owner must verify that the tenant has completed this update. A simple lease agreement is not enough. Proof is needed that the tenant declared their residence. If the tenant refuses or forgets to do so, the owner must intervene. We advise attaching an annex to the lease listing the documents required for the residence declaration. This annex must be signed by the tenant. It serves as a reminder and proof of good faith if a dispute arises. Transparency on this point avoids surprises with the first arnona bill.

Closing the previous tenant’s account: the shtar ’hov

Before transferring the tax, ensure the previous tenant has settled their share. In Israel, common practice is to request a shtar ’hov (promissory note) signed by the previous tenant to cover potential arrears. This document is not insurance; it is a debt acknowledgment. It allows the owner to recover owed amounts in case of dispute without immediately initiating legal proceedings. The shtar ’hov must be signed by the tenant and, if possible, by a arev (guarantor).

The owner must verify with the municipality that the previous tenant’s balance is zero. A positive balance prevents account closure and blocks the transfer. If the previous tenant left the apartment without notice, the owner must document the property condition and notify the municipality to avoid being billed for the vacancy period. The notification must include the exact move-out date and a copy of the shtar ’hov if arrears remain. This step is crucial because the municipality may take months to update its records. Without written notification, the owner risks receiving bills for a period when no one was occupying the unit.

If the previous tenant disputes the amount of arrears, the owner must refer to the lease agreement and municipal statements. The shtar ’hov facilitates the resolution of this type of dispute. It is recommended to have this document signed at the key handover, not after. Once the tenant has left, it is difficult to obtain. We emphasize the importance of this step. A well-drafted shtar ’hov is the best protection against unpaid arnona. It must mention the estimated amount of arrears and the period concerned. This document is kept by the owner and presented to the municipality if necessary.

Activating the new account: documents and deadlines

The new tenant must sign a residence declaration with the municipality. Without this signature, the arnona continues to be charged to the owner. This declaration is a standard form available at the municipality or online on the city’s website. The tenant must indicate their address, their teoudat zeout, and the date of possession. Required documents include a copy of the tenant’s teoudat zeout and proof of the possession date, often the lease agreement.

There is no strict legal deadline imposed by law, but the municipality may bill retroactively if the declaration is late. The owner must require proof of filing from the tenant. This proof can be a municipal receipt or an email confirmation. Without this proof, the owner cannot be certain the transfer is effective. We recommend setting a contractual deadline of seven days after key handover for the tenant to provide this proof. This deadline is reasonable and allows the tenant to complete the steps without delay.

If the tenant does not meet this deadline, the owner must intervene. They can send a written formal notice requesting proof of the declaration. If the tenant remains silent, the owner can file the declaration themselves, attaching the lease agreement. This process is longer and requires tenant authorization, but it protects the owner. It is important to note that the municipality does not refuse a declaration filed by the owner if it is accompanied by the necessary proofs. This flexibility is useful for absent owners who cannot rely on their tenant’s diligence. Vigilance on this point is essential to avoid confusion in future billing.

Managing arrears and late payment penalties

If the new tenant does not yet have an active account, the municipality may send bills to the owner. The owner must immediately dispute these bills by attaching proof of the tenant change. The dispute must be made in writing, with a copy of the new tenant’s residence declaration and the lease agreement. The municipality then reviews the file and, if the proofs are valid, transfers the bill to the new resident. This process can take several weeks. During this time, the owner must monitor their bank statements to detect any automatic withdrawals or unpaid bills.

Late payment penalties apply to the person registered in the registry. If the owner remains registered by error, they will incur the penalties. This is why the speed of the declaration is crucial. In case of a dispute over the split of arrears between the previous and new tenant, the owner must keep a written record of the exact key handover date. This record can be a signed key handover report by both parties. It serves as a reference for calculating each tenant’s share. Without this record, the owner is in a difficult position to prove who was responsible for which period.

The owner must also verify that the lease clearly states that the tenant covers late payment penalties. If the lease is silent on this point, the owner may be required to pay the penalties before recovering them from the tenant. To avoid this, it is recommended to stipulate in the lease that the tenant is responsible for all penalties related to the arnona. This clause is simple and effective. It avoids unnecessary disputes and protects the owner against tenant payment delays. Proactive management of these points is the key to a stress-free rental.

Impact on vaad bayit and common charges

The arnona is distinct from vaad bayit (condominium fees). Transferring the municipal tax does not automatically change the allocation of common charges. Vaad bayit fees are paid by the owner to the condominium association, or directly by the tenant if the lease provides for it. It is essential to check that the condominium bylaws do not have a specific clause on the transfer of debts between tenants. Generally, vaad bayit debts prior to the tenant change remain the responsibility of the previous tenant, but the owner remains jointly liable with other unit owners.

If the building has vaad bayit debts prior to the tenant change, the owner remains jointly liable with other unit owners, regardless of the arnona transfer. This means that if the previous tenant did not pay their charges, the owner may be pursued by the condominium association. To protect themselves, the owner must verify the previous tenant’s vaad bayit balance before signing a new lease. They can request a zero-balance certificate from the manager. This certificate is crucial to avoid assuming old debts. The owner must also ensure the new tenant is informed of their vaad bayit obligations.

The distinction between arnona and vaad bayit is often a source of confusion. The tenant may believe that paying the arnona covers all charges. This must be corrected. The lease must explicitly list the charges paid by the tenant and those paid by the owner. This clarity avoids misunderstandings. We recommend attaching an annex to the lease detailing the charge allocation. This annex must be signed by the tenant. It serves as a reference in case of dispute. Transparency on this point is essential for a good rental relationship. The owner must remain vigilant about these two types of charges, as their management is distinct but complementary.

Procedure in case of municipal refusal or dispute

If the municipality refuses to transfer the tax citing an incomplete file, the owner must request a written list of missing documents. This list is crucial as it allows completing the file without facing new refusals. The owner must send the missing documents by registered mail or email with a read receipt. If the municipality maintains its refusal, the owner can appeal to the administrative court. This recourse is rare but possible. It is recommended to consult a real estate attorney before initiating this procedure. The cost of an attorney can be high, but it is often lower than the accumulated late payment penalties if the dispute lasts long.

In case of a disagreement with the tenant over who should pay the transition period, the owner can appeal to the family court to obtain a decision on the charge allocation. This court has jurisdiction over disputes between owners and tenants. The procedure is faster than that of the civil court. The owner must provide all proofs from the file, including the lease agreement, residence declaration, and municipal bills. The court then decides based on the facts and documents provided. This solution is effective for resolving blocking disputes. It allows clarifying responsibilities and avoiding conflict escalation. The owner must remain calm and factual in their writings to the court.

An absent owner can appoint a local professional to handle the procedures with the municipality, specifying the limits of their authority in the mandate. This mandate must be signed and legalized. It must clearly state that the professional is authorized to sign declarations and dispute bills on behalf of the owner. This delegation is useful for owners who cannot travel. It ensures that procedures are performed correctly and on time. We offer this service as part of our rental management. This service includes managing declarations, disputing bills, and tracking disputes. It allows the owner to sleep well, knowing their interests are protected on the ground. Delegating these tasks is a pragmatic solution for owners residing abroad.