Jerusalem Clinic's Rent Set at $1,800 Monthly After Legal Battle

A Jerusalem court has ruled that a dental clinic operating in a two-story, 118-square-meter property near Damascus Gate will pay monthly rent of 6,804 shekels (approximately $1,800 USD). The property, leased in 1998 under the Tenant Protection Law, has been used as a dental clinic since then, with significantly below-market rent.

The property owners sued to establish new rent rates, arguing that the clinic, as a medical practice, falls under a regulation exempting clinics from maximum rent ceilings. The tenant countered that substantial "key money" payments were made with the understanding that rent caps would continue to apply, and that a different regulation, excluding businesses where key money was not paid, should take precedence.

Judge Amir Dahan rejected the tenant's arguments, citing that the regulation exempting clinics was established in 1983 and explicitly removes rent ceilings for any clinic, regardless of key money payments. He noted that the tenant's cited regulation was added later and does not retroactively apply. Dahan also pointed out that the impact of the initial key money payment, made over 24 years prior, was negligible under another regulation.

In determining the new rent, the court considered factors such as the property's location near public transport and medical facilities, its two unequal floors, and its proximity to a busy area, while also accounting for its older structure, dense surroundings, and lack of parking. The court acknowledged the specific needs of a clinic environment, requiring a more calming and accessible setting than a typical office.

The judge set the monthly rent at 6,804 shekels, about 70% of the 9,720 shekels sought by the owners, effective from the lawsuit's filing date of March 3, 2025. The court also addressed the tenant's claim regarding the lease term, finding the original one-year agreement did not bind the parties to long-term rent expectations. Considering the current occupant is caring for a disabled family member, the court established a deferred payment plan for the rent arrears, with the first payment due in March 2027 and the remaining balance payable by August 2030, with only indexation adjustments, not interest.