Israel Updates Tenant Rights on Repairs, Deposits, Rent Increases, and Early Lease Termination

Israel's rental market continues to expand, with nearly one-third of the population living in rented apartments. To reduce common disputes between landlords and tenants, the Ministry of Justice has introduced new default contract regulations that apply when lease agreements are silent on specific issues. These rules clarify responsibilities for repairs, deposit limits, rent increases, and early lease termination.

Under the new guidelines, landlords must fix systemic defects and essential infrastructure problems such as electricity, water, or sewage, while tenants are responsible for damages caused by unreasonable use. Urgent repairs affecting safety or reasonable use must be addressed within three days, and regular repairs within thirty days. If landlords fail to act, tenants may fix the issue themselves and deduct the cost from rent after providing written notice and a reasonable timeframe.

Rent increases during lease extensions without explicit terms are capped at the consumer price index rise, preventing sudden steep hikes. For example, if inflation is 3%, rent can only increase by about that amount, not by 10-15% as sometimes seen in the free market. Deposit amounts landlords can demand are capped at the lesser of one-third of total rent for the lease period or three months’ rent. Landlords must return deposits within 60 days after lease end, including any accrued interest.

Early lease termination is possible if tenants find a suitable replacement tenant with similar income and no known debts, and landlords cannot unreasonably refuse. Courts balance landlords’ property rights with tenants’ needs in such cases. When a property is sold during a lease, the new owner assumes the landlord’s rights and obligations, and the existing lease remains valid.

If tenants fail to pay rent or vacate, landlords may file eviction lawsuits in the Magistrate’s Court, with filing fees around 774 shekels plus legal costs. Many landlords also require guarantors or additional securities beyond the deposit to mitigate risks. The new regulations aim to fill gaps in lease agreements, promote clear documentation, and reduce conflicts in Israel’s growing rental market.