Israeli Lawmakers Approve Bill That Regulates Rental Housing Market - Minus Two Key Clauses

Legislation now goes to the full Knesset, but landlords won't be required to offer long-term contracts without price hikes

A bulletin board on Sheinkin Street in Tel Aviv offering an apartment for sale.
Assaf Evron

The Knesset Constitution, Law and Justice Committee on Monday approved a law that regulates Israel's rental housing market, albeit shorn of two of the key elements its backers had originally proposed.

The legislation, which now goes to the full Knesset for its second and third readings before becoming law, regulates relations between landlord and tenant, and defines what constitutes minimally appropriate housing.

But two clauses that appeared when the legislation was first proposed more than three years ago, by MKs Stav Shaffir (Zionist Union) and Roy Folkman (Kulanu), disappeared.

One would have required landlords to offer tenants an option of a long-term contract of at least three years, during which the right to raise rents would have been limited.

The other would have created a rental contract registry, where copies of agreements would have to be filed. That would have created a database that let tenants see current market rates for apartments and would have made it easier for the Israel Tax Authority to see who was collecting rent income.

Even though tax evasion among residential landlords is widespread, the authority actually opposed the measure.

Among other things, the law requires tenants to cover rent and expenses such as municipal tax and utilities, while the landlord must cover all fixed costs, including repairs and home insurance.

It also limits the size of guarantees a landlord can take to one-third the rent for the period of the contract, or three times the monthly rate, whichever is lower.