Renting an Apartment in Israel
What to Pay Attention to When Renting an Apartment in Israel
Do you lack information regarding renting an apartment in Israel? Have you been sent a long and elaborate rental contract, and you do not understand what’s written in it? Are you confused about the difference between a promissory note and a guarantee?
This article, by Alex Brosh, a lawyer at Cohen, Decker, Pex & Brosh law offices, will address important questions to ask (and answer) before signing a lease agreement for a house, apartment, or commercial property.
Before you sign a rental agreement, make sure that the asking price matches the market value. To figure out the property’s market value, you need to consider the location of the apartment (next to the city center, schools, restaurants, shops, etc.), the floor in which it is located, whether the building has an elevator (or a Shabbat elevator), and whether the apartment has been renovated recently. Also, compare prices to similar apartments in the same neighborhood. The easiest way to check the normal rental price is online or to ask an Israeli real estate agent in the area.
Method of payment
Sometimes apartment owners ask for the first and last month payment in advance when signing the rental agreement. This is a common way to ensure that the tenant will not leave the apartment without paying his dues.
Sometimes you also want to arrange to pay rent for certain periods (once a month, every four months, once a year, etc.). Make sure that the requested method matches your payment ability, as failure to pay will result in a breach of the agreement that may lead to the evacuation of the apartment.
The method of payment must be coordinated in the rental contract, but it can be said that there are two common methods; the first by providing checks in advance, and the second by making a standing bank order to the owner of the apartment.
Current taxes and payments
In contrast to the practice in the United States, for example, when renting an apartment in Israel, the obligation to pay municipal taxes (called arnona in Hebrew) is on the tenant. It is important to know that there are tenants who are entitled to discounts for municipal taxes, namely soldiers, disabled people, students, etc. Checking whether you are entitled to a discount can save hundreds of shekels each month.
Also, in Israel, the tenant is the one who pays the current payments deriving directly from the use of the house, electricity, gas, water, the collective house/building committee payments, and so on.
It is important to ensure in the contract that you are not charged with additional taxes, such as betterment levies, payments to the house committee that are not related to the current use of the property (e.g. repairing a pipe that exploded in the building, painting the stairwell), etc.
Customary guarantees when renting an apartment in Israel
There are several types of guarantees which are usually used in the Israeli rental market.
- Bank guarantee: This determines that the bank will pay the owner of the apartment the amount recorded in the guarantee note. It is important to remember when issuing an autonomous guarantee that the guarantee can be repaid without the landlord having to prove that the tenant has breached the lease agreement. Moreover, the landlord does not have to inform the tenant that he intends to realize the bank guarantee. For the most part, a bank guarantee is for three months’ rent.
- A promissory note: This allows the owner of the apartment to realize said note in execution, without filing a claim. If the security certificate is signed by guarantors, the landlord is entitled to act against them.
- Third party guarantees: In this case, the guarantors are placed in the tenant’s shoes, meaning that they undertake to comply with all the terms of the agreement as if they signed the agreement itself.
In order to prevent problems, it is highly recommended to arrange as many details as possible in the written framework of the rental agreement. It is important to know that verbal agreements are usually difficult to prove, therefore they have less significance in legal terms.
Before you enter into an agreement to rent an apartment, it is recommended to contact an Israeli attorney who deals in real estate in order to check whether there are any problematic clauses. Remember, carefully written contracts prevent future legal problems. Renting an apartment in Israel can be done hastily and without prior thought, but it is recommended to consult with a lawyer in advance in order to obtain legal advice.
Contact Cohen, Decker, Pex & Brosh for information about renting an apartment or rental contracts and legal advice at:
: 03-3724722, 055-9781688