Israel Votes to Pass Rental Fairness Law to Boost Renters' Rights

The Knesset passed a law on Monday designed to regulate the landlord-tenant relationship and to ensure that minimum conditions are met to make residential rental properties inhabitable.

In the event that the landlord fails to repair defects, the tenant may do so and deduct the cost from the rent under the new law.

The final legislation was passed without a provision that was initially proposed that would have required property owners to offer leases to tenants for three years, during which the landlords would have been barred from raising the rent. It does include a provision, however, that requires that any broker’s fees for bringing the property owner and tenant together be paid by the property owner.

The initial bill was sponsored by Knesset members Stav Shaffir (Zionist Union) and Roy Folkman (Kulanu). In the course of the consideration of the legislation in the Knesset Constitution, Law and Justice Committee, several amendments were made to the bill at Folkman’s request, including one requiring that the landlord pay the broker’s fee, which is a reversal of the custom up to now in Israel. The new law also limits the security deposit that the landlord can demand to a third of the total rental payment due over the course of the lease but in no event more than three months’ rent.

When it comes to the condition of the leased property, if the landlord fails to address maintenance problems within a reasonable amount of time, the new law gives the tenant the right to have the repairs made and to deduct the cost from the rent.

The law provides that a home is considered uninhabitable if living there poses unreasonable risk to the tenant’s health or safety, if the electrical system, lighting or sewage system is not in working order or if the home is not property ventilated. In the event that a situation arises that makes the home unfit for reasonable habitation, the landlord has a maximum of three days to repair the problem.

The law requires the tenant to pay municipal taxes (arnona in Hebrew) and the monthly building maintenance fees and utilities in addition to the monthly rent. It allows the landlord to deduct funds from the security deposit for any of the following reasons: non-payment of rent on time; non-payment of any other obligation on the tenant’s part; the cost of repairing damage caused by the tenant that the tenant fails to fix; and compensation due to the failure of the tenant to vacate the premises on time.

The owner of the premises must give the tenant notice of any intention to use the security deposit, and is authorized to make use of the security deposit, if there are grounds for it, 60 days after the premises are vacated.