The contract
The residential lease in Israel
It is the only document that counts on the day a tenant stops paying or hands back a damaged apartment. Here is what it must set out, and what happens when it does not.
The costliest confusion
A brokerage agreement is not a lease
Many owners sign a brokerage agreement and believe they are protected. A brokerage agreement organises the intermediary’s commission and the introduction. It is useful to the intermediary. It is worth nothing on the day the tenant stops paying.
The lease is an instrument. It stands up in an Israeli court, provided it was drafted for that. Ours is drafted by a law firm, and that work is included in the management fee.
The content
What an Israeli lease has to set out
A short, vague lease is paid for later. These are the points that come back in every dispute we see.
- Term and renewal. Most often twelve months, with or without an extension option. The option must say on what terms and by when it is exercised.
- Rent and how it is paid. Amount, date, method, and what happens if payment is late. Rent paid by postdated cheques is not handled like a monthly transfer.
- Charges and arnona. Who pays what, during the lease and during a vacancy. This is the most frequent source of dispute.
- The guarantees. Deposit, guarantor’s undertaking, Shtar Hov. They are collected before the keys change hands, never after.
- Condition report and inventory. Drawn up on entry, with photographs. Without an entry report, nothing can be withheld on the way out.
- Upkeep. What falls to the tenant day to day and what stays with the owner, in particular plumbing, waterproofing and the water heater.
- Leaving. Notice, early departure, the condition the property must be left in, and the return of the deposit.
- Subletting. Forbidden, allowed, or subject to written consent. A silent contract is read against the absent owner.
The real point
The guarantees, and when they are collected
A well drafted lease with no guarantees in hand is of no use. The deposit must be paid, the guarantor must have signed, the Shtar Hov must be in your hands, and the tenant’s insurance certificate must have been seen, not promised.
All of that happens before the keys change hands. Afterwards you have no leverage left: the tenant is in.
Our part
What we do
We select the applicant and check the file, we have the lease drafted by the firm, we collect the guarantees, we draw up the condition report and the inventory with photographs, and we hand over the keys.
Then we follow the payments, we walk through the apartment twice a year and we handle the exit. You receive your rent, and the tenant has someone to speak to, in Hebrew.
Good to know
Frequently asked questions about the lease
How long is a lease in Israel?
Most often twelve months, with or without an extension option. Term, notice and exit conditions are set by the contract, not by a statutory scale.
What is a Shtar Hov?
A promissory note signed by the tenant, and often by the guarantor, which allows recovery to start without going back to square one. It is the most useful guarantee in an Israeli file.
Does the tenant pay arnona?
On a residential letting, arnona and vaad bayit are usually the tenant’s for the term. The contract says so, and we check it before signature.
Can a lease be signed from abroad?
Yes. The lease is signed remotely, and we hand over the keys on site once the guarantees are collected.
What if the tenant leaves early?
That depends on the break clause. A lease without one leaves the owner with no answer, which is exactly the situation to avoid.
Have a solid lease drafted
Tell us where the property is and where you stand. We will tell you what the lease has to cover in your case.