Canceling a Rental Agreement During the Coronavirus Pandemic
Due to the measures undertaken by the Health Ministry of Israel to stop the spread of the Coronavirus, tens of thousands of Israelis have suddenly lost their jobs, some of them permanently. In light of these events, many of them found themselves unable to pay the rent. In this uneasy situation, it is very important to think twice before undertaking any reckless steps.
The law office of Cohen, Decker, Pex, Brosh helps its clients deal with various aspects of Israeli real estate law. This article will explain some possible ways of dealing with the matter of canceling a rental agreement in Israel.
Inability to Pay Rent
Someone unable to pay the rent because of the quarantine caused by the Coronavirus pandemic might claim “force majeure”. “Force majeure” is an extraordinary unforeseen situation that frees parties from liability. Section 18 of the Remedies Law states that when someone is forced to renege on the contract because of circumstances that he did not know about, was not able to know about, was not able to foresee or prevent while signing the contract, then he will not be liable for the breach of the contract. In other words, he is not obliged to stand by the terms of that agreement. For example; when parties cancel their vacation or event hall that they arranged, due to an unforeseen accident or disaster, article 18 will likely be applied.
However, it should be mentioned that until now, Israeli courts were more focused on enforcing the principle of keeping the contract. Therefore, it is unknown in which cases the courts will decide to apply the section 18.
Inability to Enter to the Property
If the tenant is not able to enter the property that he rented, he could be exempted from paying the rent. To be more specific, the section 15 of the Rent and Lending Law states that the tenant is exempt from paying the rent when the property is rented, but the tenant is prevented from using it for the purpose of the rent because of the circumstances related to the rent or the means of access to it, and the tenant did not cancel the contract. In such situations, this clause enables the tenant either to suspend the rental payment or to break the contract. If the tenant chooses to suspend the payment of the rent, then, after a reasonable amount of time, the landlord in turn has the right to cancel the contract.
The important condition to enforce this clause is proof that the circumstance was unforeseen when the contract was signed.
It should be noted, however, that the enforcement of both clauses depends on the circumstances of each case. Therefore, it is suggested, before claiming any of the above-mentioned clauses, to negotiate with the landlord to find some alternative solution; such as breaking up payments, discounts, and so on.
Contact Us – Cohen, Decker, Pex, Brosh – Law Office
If you need legal advice regarding the canceling a rental agreement do not hesitate to contact a lawyer specializing in Contractual Law and Commercial Law from our law firm.