By Yael Dral | March 16, 2025 | TheMarker

As housing prices in Israel continue to rise steadily and it becomes harder to buy property, more and more people are turning to rentals. According to Israel’s Central Bureau of Statistics, from 2013 to 2023, the number of apartments offered for rent increased by an average of 3.4% per year — far outpacing the 1.9% growth rate of overall housing stock.

Along with the growing demand, average rent prices have consistently increased. But for many renters, the biggest challenge isn’t just the rising cost — it’s the relationship with the landlord. Unlike many countries that offer long-term, regulated rentals, most apartments in Israel are privately owned, leaving tenants vulnerable and unsure of their rights.

To help renters better understand what they’re getting into, we spoke with Adv. Idan Ben-Yacov, a partner at Ben-Yacov Law Firm, which specializes in real estate, family wealth, and cybersecurity.

🔐 What Guarantees and Securities Are Common in Rental Deals?

Under Israel’s Rental and Lending Law (1971) — which, despite being over 50 years old, has been frequently updated — landlords can require financial or third-party guarantees, such as a bank guarantee, cash deposit, or promissory note.

These are meant to:

• Ensure the tenant pays rent and bills.
• Protect the condition of the apartment.

Landlords of higher-value properties usually demand stricter guarantees, while close personal relationships between tenant and landlord might reduce those demands. It’s also common to provide post-dated checks for utilities and building fees, or have a parent cosign as guarantor.

But there’s a legal cap on financial guarantees:
The total amount can’t exceed the lower of either:

• Rent for a third of the full rental term, or
• Rent for three months.

This rule only applies if monthly rent is up to ₪20,000. Above that, the law assumes both sides can afford private legal protection.

🚪 What Happens If Someone Wants to Leave Before the Contract Ends?

It’s smart to prepare for early exits before signing:

• Include clauses about replacement tenants,
• The landlord’s right to refuse,
• And rules around property use (e.g. pets, smoking).

There’s no legal minimum notice period for ending a lease, but one to three months’ notice is common.

🚽 The Pipes Are Clogged — Who Pays?

“Pipes are a classic issue, especially in older buildings,” says Adv. Ben-Yacov.
The key legal question is: Was the tenant’s use reasonable?
If not (say, the clog was caused by a tenant’s misuse), the landlord isn’t required to cover repair costs — even if the infrastructure is technically the landlord’s responsibility.

Again, the relationship matters. In problematic or older apartments, it’s wise to document the property’s condition in the contract to avoid future disputes.

💸 Who Pays the Real Estate Agent?

Commission should be agreed upon before moving in, and in writing.

General rule:
Whoever hired the broker pays them.

If a landlord is contacted by a broker, they can agree to show the apartment but clarify that the tenant will pay the commission.

Can both landlord and tenant pay?
Yes — but only if both agree in writing.

⚠️ Renting in 2025? Beware of War-Related Delays

The ongoing war has delayed many new construction projects.
If you’re signing a lease for an apartment still under construction, make sure the contract covers:

• Delivery delays
• Contractor responsibilities
• Compensation or cancellation options

Disclaimer: This translation is a simplified version of the original Hebrew article. For legal accuracy or detailed interpretation, consult a Hebrew-speaking attorney or refer to the original publication on TheMarker.